On October 29, the Division of Economic and Risk Analysis (DERA) of the Securities and Exchange Commission published the results of a study that analyzed the market for unregistered securities offerings during the period from 2009–2014. The study found that private placements outpaced the level of capital formation through registered securities offerings during recent years, totaling more than $2 trillion during 2014. Regulation D offerings accounted for approximately $1.3 trillion of the capital raised, of which approximately 99 percent was sold in reliance upon Rule 506. The study also found that Rule 506(c) offerings (i.e., private placements that are offered by means of general solicitation and advertising) represented only approximately 2 percent, or $33 billion, of the capital raised in Regulation D offerings. According to the study, the median size for Regulation D offerings conducted by non-financial issuers (i.e., issuers other than pooled investment funds and issuers that are not, according to their Form Ds, in the commercial banking, insurance, investing, investment banking, or other banking or financial services industry) was less than $2 million, suggesting that Regulation D remains a critical tool for small businesses to raise capital.

Click here to view the complete text of the DERA study.