Series 79 practice questionmediumRegulation D
A private placement under Rule 506(b) includes several non-accredited investors. What additional requirement applies regarding disclosure?
- ANo specific disclosure is required
- BRegistered-level disclosure✓ Correct answer
- COnly verbal disclosures are necessary
- DA summary term sheet is sufficient
Explanation
Why B — Registered-level disclosure
If non-accredited investors participate, the issuer must provide them with the same detailed disclosure required in registered offerings. This increases issuer liability and compliance complexity.
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