Investing Update

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New Federal Guidelines for Investing

On July 10, 2013, the SEC adopted amendments to Rule 506 of Regulation D under the Securities Act of 1933 implementing changes mandated by the Jumpstart Our Business Startups Act (JOBS Act). Rule 506 is an exemption from registration under the Securities Act of 1933, as amended. Under Rule 506, an issuer may raise an unlimited amount of capital from an unlimited number of “accredited investors.” As you may be aware, historically, this exemption prohibited general solicitation or advertising.

The amendment adds a new section to Rule 506, section (c), which is now effective, and allows an issuer to engage in general solicitation or general advertising in the offering and selling of securities. As a result, issuers may use broad-based marketing methods such as the Internet, social media, email campaigns, television advertising, and seminars open to the general public, in order to market securities of the issuer. 

For more information download Changes to Rule 506.