SEC Rules Providing Safe Harbor for Private Placements: General Condition of Integration

Under the SEC rules that provide a safe harbor for certain private placements, if specific requirements are met, the offering is a private placement and exempt from registration requirements. The rules provide general conditions that must be met.

The first is integration. The rules provides that sales more than six months before the start of the exempt offering, and six months after the completion of the offering will not be counted as a part of the offering at issue. This generally helps when an issuer is trying to issue under rules that allow a $1 million or $5 million limit to the offering, or where the rules that limit the number of purchasers to 35.

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