Generally speaking, if a company wishes to raise funds by selling or offering its securities it must register those securities with the Securities and Exchange Commission. However, there are numerous exemptions to this requirement to register. Although Reg D’s Rule 506 is the most widely used, there are also exemptions under Reg A, Rule 504 and Reg Crowdfunding.
Each of these rules and regulations has its bundle of requirements that must be met to allow a company to take advantage of the exemption from registration.
In November 2020, the SEC adopted a new final rule on the requirements, including the offering and investment limits. Here are the changes in the limits.
| Regulatory Framework | Old Limit ($ million) | New Limit ($ million) |
| Reg A Tier 2 | 50 | 75 |
| Reg A Tier 2 secondary sales | 15 | 22.5 |
| Reg Crowdfunding | 1.07 | 5 |
| Reg D’s Rule 504 | 5 | 10 |
Any questions? Let me know. Alan N. Walter