For Reg D Filers Compliance is Both Critical and Getting More Complex

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Throughout the 2009-2012 period more than 40,000 Reg D filings were made by non-financial issuers, with a median offer size of $2 million.

In 2012 alone more than 234,000 investors participated in Reg D offerings and 90% of those were listed as accredited. 506 accounts for approximately 99% of amounts sold. Interestingly, only 13% of Reg D offerings since 2009 report using a financial intermediary (broker-dealer or finder). This data, prepared by the Division of Economic and Risk Analysis, predates the Rule 506c Framework.

It is impossible to know how many of those offerings would have been made under Rule 506c if general solicitation was available over the referenced period. What we do know is that standards of compliance were raised significantly under 506c. In addition, filing requirements at both the state and federal levels are becoming more complex.

Capital raised through Regulation D and Regulation D/A (amended) offerings*

Year

Regulation D Filings (#)

Regulation D/A Filings (#) Total Amount Sold ($ Bil) Mean Amount Sold ($ Mil)

Median Amount Sold* ($ Mil)

2009

13,764

7,077

595

36

1.5

2010

17,581

11,864

1,025 26

1.4

2011

18,174

13,284 903 27

1.5

2012

18,187

13,284 903 27

1.5

*Mean and median amount sold based on initial (new) Form D filings only. Total amount sold includes additional amounts and reported in amended filings, recorded at the time of the amendment.
Our priority at Deal Box is in working with client companies to establish effective, more fully informed and compliant strategies for executing Reg D offerings. For SEC guidance on Form D filings go to:http://www.sec.gov/info/smallbus/secg/formdguide.htm.

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