As mentioned below, the SEC's Regulation D is a safe harbor that allows companies to offer securities privately without the burdens of registration of a public offering as long as the offering meets the requirements of Regulation D. Reg D Rule 503 requires a notice filing be made with the SEC on Form D whenever a company is relying on Reg D for an exemption from registration. Not long ago, the SEC updated the information to be included in Form D and turned it from a paper to electronic filing. But when do you need to file this form? In the past the rule was that the Form D was filed 15 days after the first sale of securities in the offering. Of course practitioners read that to mean 15 days after the first actual closing on a sale. The SEC's current interpretation, however, contained on their website, is that "the date of first sale is the date on which the first investor is irrevocably contractually committed to invest." What does this mean? Well, if an investor sends in a signed subscription agreement and funds are placed into escrow pending closing, even though the company has not yet accepted the subscription, most now believe that triggers the start of the 15 day clock. So watch your timing when relying on Reg D, especially if funds may be in escrow for more than a few days.
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