The Commodity Futures Trading Commission is making it easier to market private securities offerings to the general public by harmonizing its rules with those amended last year by the Securities and Exchange Commission. A newly issued no-action letter by the CFTC’s Division of Swap Dealer and Intermediary Oversight eases marketing restrictions on private offerings by hedge funds, private equity funds, and venture capital funds.
In July 2013, the SEC amended its rules to lift the ban on general solicitation and advertising for certain private securities offerings. Companies seeking to raise capital through the sale of securities must either register the securities offering with the SEC or rely on an exemption from registration. Rule 506 of Regulation D is the most widely-used exemption and Congress, through the JOBS Act, directed the SEC to remove the prohibition on general solicitation for these offerings (through the new Rule 506c) if sales are limited to accredited investors.
