Rule 506
Federal Covered Securities
Federal covered securities represent a special kind of exempt security. Pursuant to the Securities Act of 1933, states are preempted from requiring registration for certain securities. These include mutual funds, securities traded on the most prominent stock exchanges and private placements sold pursuant to Regulation D, Rule 506 and Regulation A offerings.
Rule 506 (b)
Securities and Exchange Commission (SEC) Regulation D, Rule 506 provides a federal exemption for private offerings without regard to the dollar amount of the offerings. Sales, other than to accredited investors as defined by Regulation D, Rule 501 of the Securities Act of 1933, are limited to no more than 35 purchasers who either alone or with their purchaser representative have the knowledge and experience to evaluate the merits and risks of the offering and no general advertising or solicitation is allowed.
Specifics
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Filing Fee: |
Timely filing – The fee is $350 for on-time filing. Late filing – If the notice filing is late but within 10 days after the due date, the accompanying the late filing shall be $700. If the notice filing is more than 10 days after the due date, the fee accompanying the late filing shall be $1,050. EFD will calculate the fee that is due on the filing. |
Rule 506 (c)
Securities and Exchange Commission (SEC) Regulation D, Rule 506 provides a federal exemption for private offerings without regard to the dollar amount of the offerings. General advertising and solicitation is allowed in this circumstance so long as all sales are made only to Accredited Investors.
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Filing Fee:
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Timely filing – The fee is $350 for on-time filing. Late filing – If the notice filing is late but within 10 days after the due date, the accompanying fee for the late filing shall be $700. If the notice filing is more than 10 days after the due date, the fee accompanying the late filing shall be $1,050. EFD will calculate the fee that is due on the filing. |
Regulation A
Offerings Utilizing the new Regulation A+
Regulation A allows companies to offer and sell securities to the public, but with more limited disclosure requirements than what you would expect from publicly reporting companies. Smaller companies in earlier stages of development may be able to use this rule to raise money. An offering circular is required to be given or made accessible to each potential investor. The registration requirements pursuant to Regulation A. are: The aggregate offering may not exceed $20,000,000 in any 12-month period if using Tier I; or $75,000,000 in any 12-month period if using Tier II. For Tier II users, New Mexico requires a notice filing to be made along with a fee of $350. Please see the links below for the form and the temporary order.
For Tier I users, please refer to the NASAA coordinated review protocol for those offerings. Contact the Securities Division with any questions you may have.