Dec 13, 2013 | Uncategorized

SEC Now Allows Private Investment Funds to Solicit General Public

As of September 23rd of this year, the SEC issued a new rule under Regulations D.  SEC rule 506(c) permits private investment funds to engage in the general solicitation of and advertising to the public.  However, the private investment firm must take reasonable steps to verify that all investors are accredited investors.  A questionnaire or subscription agreement (currently the most common) will not be sufficient.

Moreover, funds must amend their current Form Ds filled with the SEC to indicate that will rely on Rule 506(c) going forward.