Regulation D under the Securities Act of 1933 is amended, although not frequently, but a pair of amendments announced by the SEC in late 2016 are taking effective now.
The amendments to Rule 504 — the “lowest hurdle” of what had been Regulation D’s three safe harbor exemption portals — took effect January 20, 2017. The two important changes are:
- the aggregate dollar limit for offerings in any rolling 12 month period has increased from $1 million to $5 million, and
- the “bad boy” disqualification conditions found under Rule 506 now apply to Rule 504 offerings.
With the dollar cap on 504 offerings jumping to match the dollar cap for Rule 505 offerings, Rule 505 is being eliminated effective May 22, 2017. Rule 505 had become almost useless since federal preemption of state Blue Sky registration laws for Rule 505 offerings took effect years ago.