On March 12, 2025, the Securities and Exchange Commission (SEC) published updates to its Compliance and Disclosure Interpretations (C&DIs) related to exempt offerings under the Securities Act of 1933 (Securities Act). These changes include new guidance related to determining accredited investor status, clarifications for existing guidance, and the removal of certain outdated guidance.
Issuers contemplating private placements pursuant to Section 4(a)(2) of the Securities Act or offerings under Regulation A, Regulation D, and Regulation Crowdfunding are encouraged to review the material C&DI updates described below. Complete details on these updates and other C&DIs can be found on the SEC’s website here.
Regulation A offerings
Revised guidance
In Question 182.01, the SEC clarified the process for making an initial nonpublic draft offering statement and all subsequent nonpublic amendments available on EDGAR. The Commission noted that, upon completion of the review of the offering statement, its staff will make public on EDGAR all nonpublic correspondence related to the nonpublic initial draft offering statement and its amendments.
In Question 182.02, the SEC added language indicating that, for draft offering statements submitted for nonpublic review, upon the completion of the SEC’s review and after qualification, the SEC staff will make all review correspondence publicly available.
In Question 182.10, the SEC added language, citing Securities Act Release No. 9741, to explain that state securities law registration and qualification requirements are not necessarily preempted for the resales of securities purchased in a Tier 2 offering because such securities were initially purchased through a Tier 2 offering.
Withdrawn guidance
The SEC removed Question 182.04 related to issuer eligibility under Securities Act Rule 251(b)(2) for companies that suspended their reporting obligations under the Securities Exchange Act of 1934.
The SEC removed question 182.06 related to the eligibility of private, wholly owned subsidiaries of Exchange Act reporting companies to use Regulation A.
The SEC removed question 182.17 regarding the age of financial statement requirements for Tier 2 offerings.
Regulation D offerings
New guidance regarding investor verification
The SEC added guidance in Question 256.35 regarding additional methods that an issuer can use outside of the verification safe harbors contained in Securities Act Rule 506(c)(2)(ii) to satisfy the requirement to take reasonable steps to verify accredited investor status. The guidance notes that issuers can apply the reasonableness standard directly to the specific facts and circumstances presented by the offering and the investors, considering factors such as:
- The nature of the purchaser and the type of accredited investor that the purchaser claims to be
- The amount and type of information that the issuer has about the purchaser, and
- The nature of the offering, such as the manner in which the purchaser was solicited to participate in the offering, and the terms of the offering, such as a minimum investment amount.
The SEC also added Question 256.36, which suggests that a high minimum investment amount for a Rule 506(c) offering could allow an issuer to take fewer steps or no additional steps to verify accredited investor status other than to confirm that the purchaser’s investment is not being financed by a third party. The question also references a recently issued no-action letter for the same proposition.
Revised guidance
In Question 254.02, the SEC removed reference to Rule 502(b)(2)(i)(C) and confirmed the substance of its prior response that foreign issuers can use Regulation D.
In Question 255.33, the SEC specified that the Rule 506 offering limit of 35 non-accredited investors is with respect to “any 90-calendar-day period for all offerings by the issuer made in reliance on Rule 506(b).”
In Question 256.15, the SEC clarified that a Canadian issuer may use financials contained in an MJDS filing, and not just its most recent filing on Forms 40-F, F-9, or F-10, to satisfy Rule 502(b)’s information requirements.
In Question 256.27, the SEC provided additional language clarifying that “demo days” or similar events meeting the requirements of Securities Act Rule 148 would not be deemed to constitute general solicitation or general advertising.
For Question 256.33, the answer was revised to reference the exemption from general solicitation or general advertising provided under Securities Act Rule 148 in advising that a demo day or venture fair would not constitute a general solicitation for purposes of Rule 502(c).
Withdrawn guidance
Question 256.09 regarding the applicability of guidance on the provision of tax basis financials for a limited partnership issuer to general partners and properties to be acquired has been removed.
The SEC removed Question 257.01, which had provided guidance regarding the place of notification of an exempt offering on Form D.
The SEC removed Question 258.05, which was related to the calculation of the aggregate offering price under Rule 504.
Questions related to Questions 260.05, 260.33, and 260.34, which addressed transition period guidance related to Rule 506(c), were removed.
Securities Act Section 4(a)(2)
Revised guidance
Question 234.02 has been updated to change the reference from “Section 4(2)” of the Securities Act to “Section 4(a)(2)” in its prior guidance related to the use of a purchaser or offeree representative outside of Rule 506(b).
Regulation Crowdfunding
Revised guidance
In Question 100.01, the SEC elaborated on which information under Rule 206 and Rule 241 an issuer may provide prior to filing the Form C with the SEC and providing it to an intermediary to determine whether there is an interest in a contemplated securities offering.
In Question 100.02, the SEC added language to clarify that accredited investors are not subject to investment limits in Regulation Crowdfunding offerings.
In Question 204.01, the SEC included language to note that, when advertising an offering under Rule 204(b) of Regulation Crowdfunding, the definition “terms of the offering” includes the “planned use of proceeds and the issuer’s progress toward meeting its funding target.”