SEC Staff Issues Interpretive Guidance on Recently Adopted Amendments to Rule 506 Addressing General Solicitation and Bad ActorsFeb3

A legal update from Dechert’s Financial Services Group.

Effective September 2013, the U.S. Securities and Exchange Commission (SEC) amended Rule 506 of Regulation D to (1) permit, in certain circumstances, an issuer to engage in general solicitation and general advertising in connection with Rule 506 offerings (General Solicitation Rules) and (2) disqualify issuers of securities offerings involving certain “felons” and other “bad actors” from relying on Rule 506 (Bad Actor Rules).

To provide further clarification on the General Solicitation Rules and the Bad Actor Rules, the SEC Staff (Staff) recently updated its related Compliance and Disclosure Interpretations (Staff Interpretations), which are discussed and analyzed below.

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