Unregistered Securities Offerings: Choosing the Right Exemption Path

This CLE webinar will discuss private offering registration exemptions, including key differences among them from a flexibility, disclosure, and documentation perspective, so you can select the best exemption for each client and context.

An unregistered offering is the offer and sale of securities in a transaction that is not registered with the SEC in reliance on an exemption from registration under applicable securities laws. Securities offerings continue to be a key source of financing for companies, and most private companies choose to issue securities in private placements to avoid the time and expense of the registration process. However, these registration exemptions have various restrictions and limitations, including the purchasers who can participate, the fundraising methods, and, for certain exemptions, limits on the amount of capital issuers can raise. 

The most commonly used framework for private offerings is Regulation D under the Securities Act of 1933, most notably its safe harbors Rule 506(b) and Rule 506(c). Companies may also rely directly on Section 4(a)(2), outside of the Regulation D safe harbors, which can lead to confusion regarding how these approaches differ in practice. Two other important frameworks are Regulation S for offshore offerings and Regulation A, a limited public offering regime. The webinar will also cover several other exemptions.

The choice of how to conduct an unregistered offering begins with identifying an available exemption that aligns with the client’s capital-raising objectives. However, the choice does not end there. Statutes, case law, market practice, deal context, and transaction risk profile often impact decisions concerning offering documentation (including PPMs, if applicable), disclosure practices, investor qualification (including determinations of accredited investor status), regulatory filings, ongoing disclosures, and other compliance matters. All of these factors affect the cost of each private offering and the relative value of each exemption for that specific offering.

Listen as our authoritative panel of securities attorneys guides you through how to navigate private offering registration exemptions competently and efficiently. The panel will provide updates on the latest trends, rules governing private securities offerings, and offer practical tips for navigating private offerings.