Glossary

What is SEC Regulation D?

SEC Regulation D, also known as Reg Dex or Reg D, comprises three rules—Rules 504, 505 and 506—that provide exemptions from registration requirements with the Securities and Exchange Commission (SEC) for certain companies offering and selling securities. These companies are smaller in size and often can’t bear the financial burden of a typical SEC registration. The intent is to expedite the process of raising capital for small companies.

Rule 504 of Regulation D provides exemptions for certain companies offering and selling up to $1 million of their securities in any 12-month period. Under Rule 505, qualifying companies can only offer and sell up to $5 million of its securities in any 12-month period; they must provide financial statements and may sell to an unlimited number of accredited investors as well as up to 35 other individuals; they cannot solicit or advertise to sell their securities; and purchasers may only receive restricted securities.

Meanwhile, Rule 506 of Reg D is a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act. Companies offering under Rule 506 can raise unlimited capital as long as they do not solicit or advertise to sell their securities; provide financial statements to and answer all questions from prospective buyers. These companies can sell to an unlimited number of accredited investors and up to 35 other purchasers who have the necessary sophistication to evaluate the merits and risks of the prospective investment. Rule 506 of Reg D is the most common choice for filers.

Companies offering under Regulation D must file a Form D in XML format via the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the Commission. For support and additional information, explore our Regulatory Disclosure solutions.

What is SEC Regulation Fair Disclosure (FD)?

SEC Regulation Fair Disclosure, also known as Regulation FD or Reg FD, requires that all publicly traded companies disclose material information to all investors simultaneously. Intended to quash selective disclosure where typically large institutional investors would receive key market information before other smaller, individual investors, Regulation FD makes communication between companies and investors more transparent, frequent and timely.

The SEC proposed Reg FD in December 1999 due to individual investor demand for even more access to material information. This demand was a result of increasing access and usage of the Internet and the rise of online discount brokers, both of which enabled individual investors to research and trade stocks on their own. Despite protests from large institutional investors, the SEC enacted Regulation FD in October 2000.

The majority of financial information is disclosed in press releases, conference calls, webcasts and via company websites. In April 2013, the SEC announced that companies could also employ social media to share information as long as certain requirements around notifying investors and ensuring unrestricted access were met. For support and additional information, explore our SEC reporting solutions.

What is SEC Regulation S-K?

Mandated by the Securities Act of 1933, SEC Regulation S-K dictates the reporting requirements for various SEC filings used by public companies. Regulation S-K applies to SEC Form S-1, which is the registration statement companies file with the SEC during their IPO, or initial public offering. It also applies to the ongoing reporting requirements in documents such as Forms 10-K and 8-K.

Regulation S-K also applies to annual or other reports, going-private transaction statements, tender offers, proxy statements, and any other required filings under the Securities Exchange Act of 1934. Regulation S-K works in concert with other rules and regulations that companies must comply with when filing with the SEC. For support and additional information, explore our SEC reporting solutions.

What is SEC Regulation S-T?

SEC Regulation S-T outlines rules and procedures pertaining to the SEC’s EDGAR computer system for the receipt, acceptance, review and dissemination of documents submitted in electronic format to the SEC. This includes registration statements under the Securities Act of 1933 as well as registration statements, reports and other disclosures under the Securities Exchange Act of 1934.

The intent of Regulation S-T is to drive the use of the SEC’s EDGAR system as a means of receiving, storing, processing and sharing information more effectively and efficiently. Regulation S-T is not intended to replace current paper rules, but acts as a supplement.

Small entities may be exempt from filing electronically if they can prove it is a temporary or continuing hardship. Filers that gain an exemption from submitting key information electronically, under Rule 202 of Regulation S-T, must file on paper based on the existing provisions laid out by the SEC. For support and additional information, explore our SEC reporting solutions.

What is SEC Regulation S-X?

SEC Regulation S-X governs the format and content of financial statements filed with the SEC by publicly traded securities. These financial statements are prepared according to GAAP and filed as part of registration statements mandated by the Securities Act of 1933; registration statements under Section 12; annual or other reports; under Section 13 and 15(d), and proxy and information statements outlined in Section 14 of the Securities Exchange Act of 1934.

Closely related to Regulation S-K, Regulation S-X is broad-reaching in that it also encompasses all notes to financial statements and all related schedules. Publicly reporting companies must accurately disclose monies and other financial data, employing consistent terminology, in order to be compliant with Regulation S-X and the Sarbanes-Oxley Act.

Rule 1-02 of Regulation S-X also addresses accountants and auditors, requiring that they be registered and in good standing under the laws of the place of their residence of principal office. It further mandates that an accountant retain all records of an audit or review, including correspondence and ancillary documents, of an issuer’s financial statements for a period of seven years.

Regulation S-X was developed with input from the House Committee on Financial Services, Financial Accounting Standards with FASB Accounting Pronouncements, Federal Accounting Standards Advisory Board, Public Company Accounting Oversight Board, American Institute of Certified Public Accountants and International Accounting Standards Board.

Financial statements are often included in annual reports to company shareholders. For support and additional information, explore our SEC reporting solutions.  

What is SEC Rule 144?

SEC Rule 144 regulates the resale of restricted securities. The Securities and Exchange Commission (SEC) outlines five conditions that need to be met in order for restricted securities to be resold. Another aspect of Rule 144 requirement by the SEC is that it regulates majority shareholders and their transactions of securities. The SEC does not allow any resales of restricted securities unless they are first notified of the sale and the holder is exempt from the registration process. For support and additional information, explore our Regulatory Disclosure solutions.

What is SEC Rule 144A?

SEC Rule 144A of the Securities Act of 1933 provides a safe harbor from certain restrictions normally imposed to protect public investors. It can be applied when reselling private securities to qualified institutional buyers (QIBs), QIBs are buyers that are considered financially sophisticated and are legally recognized by securities market regulators as needing less protection.

Rule 144A enables QIBs to more readily trade securities among themselves. It allows them to sidestep the two-year holding period requirement for privately placed securities and allows firms registered with the Securities and Exchange Commission (SEC), as well as foreign companies providing information to the SEC, to avoid providing financial statements to buyers. However, purchasers are entitled to receive reasonably current information about the issuer upon request.

Rule 144A is a safe harbor widely invoked by non-U.S. companies seeking access to capital markets, though the securities sold by a foreign private issuer must not be of the same class as a class listed in the U.S. For support and additional information, explore our Regulatory Disclosure solutions.