Many hedge fund managers raise capital from investors in private offerings conducted under Regulation D. At its public meeting held on May 18, 2016, the SEC Advisory Committee on Small and Emerging Companies addressed a number of issues regarding the JOBS Act changes to the private offering rules under Regulation D of the Securities Act of 1933, with emphasis on what constitutes “general solicitation”; verification of accredited investor status; the impact of those changes on angel investing; and enforcement of the revised rules. The session featured input from David Fredrickson, Chief Counsel and Associate Director of the SEC Division of Corporation Finance; Sebastian Gomez Abero, of that Division’s Office of Small Business Policy; and Margaret Cain, a microcap specialist in the Office of Market Intelligence of the SEC Division of Enforcement. This article presents the takeaways from the session most valuable to hedge fund managers relying on Regulation D to raise capital. For additional coverage of the SEC’s public meeting, see “SEC Commissioners and Staff Discuss Possible Amendments to Definition of Accredited Investor
” (Jun. 2, 2016). For more on general solicitations under Regulation D, see “What Hedge Fund Managers Need to Know About Recent SEC Guidance on Substantive, Pre-Existing Relationships and Internet Use
” (Oct. 15, 2015); and “SEC JOBS Act Rulemaking Creates Opportunities and Potential Burdens for Hedge Funds Contemplating General Solicitation and Advertising
” (Jul. 18, 2013).