by Cydney Posner
More CDIs from the Corp Fin, one of which, described below, relates to integration under Reg D. There are also three new CDIs relating to Reg A, new 182.12, new 182.13 and new 182.14.
Securities Act Rules — Reg D
New 256.34 Rule 152 provides that a securities transaction that, at the time, satisfies the requirements for a private offering will not lose that status even if the issuer subsequently decides to make a public offering or files a registration statement. In this CDI, Corp Fin reaches a comparable result in connection with potential integration of private offerings under Rules 506(b) and 506(c) of Reg D. In this case, the issuer conducted a private offering under Rule 506(b), but then, within six months after the most recent sale, decided to conduct an offering under Rule 506(c), which permits general solicitation. According to Corp Fin, the integration analysis is not limited to examining the factors listed in the Note to Rule 502(a). Rather, analogizing to Rule 152, the staff stated its belief that, under these circumstances, “offers and sales of securities made in reliance on Rule 506(b) prior to the general solicitation would not be integrated with subsequent offers and sales of securities pursuant to Rule 506(c). So long as all of the applicable requirements of Rule 506(b) were met for offers and sales that occurred prior to the general solicitation, they would be exempt from registration and the issuer would be able to make offers and sales pursuant to Rule 506(c). Of course, the issuer would have to then satisfy all of the applicable requirements of Rule 506(c) for the subsequent offers and sales, including that it take reasonable steps to verify the accredited investor status of all subsequent purchasers.”
