Editing Regulation D (SEC) (section)

===Rule 506===
A company that satisfies the following standards may qualify for an exemption under this rule:

*Can raise an unlimited amount of capital;
*Seller must be available to answer questions by prospective purchasers;
* Financial statement requirements as for Rule 505; and
* Purchasers receive restricted securities, which may not be freely traded in the secondary market after the offering.
The rule is split into two options based on whether the issuer will engage in general solicitation or advertising to market the securities.

If the issuer will not use general solicitation or advertising to market the securities then the sale of securities can be issued under Rule 506(b) to an unlimited number of accredited investors<ref>{{cite web|title=Rule 506 of Regulation D|url=https://www.sec.gov/answers/rule506.htm |website=sec.gov |author=Securities and Exchange Commission |date=2009-12-03}}</ref> and up to 35 other purchasers. Unlike Rule 505, all non-accredited investors, either alone or with a purchaser representative, must be sophisticated – that is, they must have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment.

In July 2013, the SEC issued new regulations as required by 2012 [[Jumpstart Our Business Startups Act]].<ref>{{Cite web|url=https://www.sec.gov/news/press/2013/2013-124-item1.htm|title=Fact Sheet - Eliminating the Prohibition on General Solicitation and General Advertising in Certain Offerings |website=sec.gov |author=Securities and Exchange Commission}}</ref> These new regulations add Rule 506(c) to allow general solicitation and advertising for a private placement offering. However, in a Rule 506(c) private offering all of the purchasers must be [[accredited investors]] and the issuer must take reasonable steps to determine that the purchaser is an [[Accredited investors|accredited investor]].<ref>{{cite web |title=FACT SHEET: Eliminating the Prohibition on General Solicitation and General Advertising in Certain Offerings |url=https://www.sec.gov/news/press/2013/2013-124-item1.htm |website=sec.gov |author=Securities and Exchange Commission}}</ref>