Financial Poise

Rule 506(b) & Rule 506(c)

  • October 12, 2021
« Back to Glossary

Rule 506(b)

“Section 4(a)(2) of the Securities Act exempts from registration “transactions by an issuer not involving any public offering.” Rule 506(b) is a rule under Regulation D of that provides conditions that an issuer may rely on to meet the requirements of the Section 4(a)(2) exemption,” according to the SEC.

Rule 506(c)

Rule 506(c) is a newly adopted rule under Regulation D of the Securities Act defining how an issuer will still be able to offer and sell an unlimited amount of securities, but now allowing for the use of general solicitation to do so (subject to the requirement that reasonable steps are taken to verify that all purchasers are accredited investors).