Series 79 practice questioneasyRegulation D
Which of the following is true regarding a Rule 506(b) Regulation D private placement?
- AUnlimited non-accredited investors may participate if they are sophisticated.
- BGeneral solicitation is permitted under 506(b).
- CUp to 35 non-accredited, sophisticated investors may participate, but no general solicitation is permitted.✓ Correct answer
- DThere is a $5 million aggregate offering limit under 506(b).
Explanation
Why C — Up to 35 non-accredited, sophisticated investors may participate, but no general solicitation is permitted.
Rule 506(b) allows up to 35 sophisticated, non-accredited investors but does not permit general solicitation. Options A and B misstate the rules, and D incorrectly imposes a dollar cap.
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