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← Series 79: Underwriting & New Financing
Series 79 practice questioneasyRegulation D

Which of the following is true for a Rule 506(b) Regulation D private placement?

  1. AAn unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors may participate✓ Correct answer
  2. BGeneral solicitation is permitted if all investors are accredited
  3. CNon-accredited investors must receive audited financial statements
  4. DThe offering must be registered with the SEC before any sales can be made
Explanation

Why A — An unlimited number of accredited investors and up to 35 non-accredited but sophisticated investors may participate

Rule 506(b) allows sales to unlimited accredited investors and up to 35 non-accredited, sophisticated investors. Option B is a feature of 506(c), and registration is not required for Regulation D offerings, making A correct.

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