What Is SEC Form D?

SEC Form D Defined and Explained

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The Securities and Exchange Commission (SEC) has a primary mission to protect investors and give them information, and the securities registration process is an important part of this mission. But some businesses can bypass the registration requirement if they file a notice and meet certain other requirements. SEC Form D is used to file this notice of an exempt offering of securities, including shares of stock, bonds, and other types of investments. 

What Is an SEC Form D? 

SEC Form D is the form used by companies to notify the SEC that they have made an offering of securities but that they haven’t registered these securities with the SEC. This exemption from offering securities without registering them is covered in SEC Regulation D (Reg D), a section of the Securities Act of 1933. 

SEC regulations, as noted above, are established to protect investors against fraudulent securities offerings. But the securities registration process is lengthy and complicated, and it usually requires many months and the services of expensive experts to guide a company through the process. Reg D, however, allows a business that meets specific requirements to bypass the formal registration process. 

SEC Form D is a notice, not an application. You file it after you have offered the securities for sale.  

Who Uses SEC Form D? 

Form D is used by businesses and entrepreneurs to notify the SEC about several types of securities sales called exempt offerings under several SEC rules, including: 

  • Rule 506(b): Private placements (not to the public)
  • Rule 506(c): General solicitation for restricted securities
  • Rule 504: Offerings under $5 million

Businesses formed as corporations, general or limited partnerships, limited liability companies (LLCs), or trusts can use this notice form.

Since you aren’t registering your securities sale, the SEC wants your investors to be knowledgeable about the risks and have more-than-minimal assets. The Commission wants you to verify that your investors are accredited investors by their earned income or net worth. Trusts and entities in which all equity owners are accredited, like an LLC or corporation, can also be considered as accredited investors. 

On Form D, you must also identify “Related Persons” so the SEC can check their credentials. This includes: 

  • Each executive officer and director and individuals performing similar functions for the issuing company 
  • Each person who has promoted the issuing company either directly or indirectly within the past five years of the first sale of securities or the date when the Form D filing was required to be made, whichever is later. 

Read the Terms of Submission on Form D before you sign, and make sure you are entering the correct information for all parts of this form. Get help from a securities attorney to make sure you are doing this correctly.

How to File SEC Form D

You will need to file SEC Form D online with the SEC and you may need to file this notice with your state as well. It must be filed within 15 days after the first sale of securities in the offering. The date of first sale is the date the first investor is irrevocably contractually committed to invest. The SEC doesn’t charge a filing fee. 

Form D is available online in fillable PDF form, and the instructions are included. 

To file online with the SEC, you must use the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. Before you file, you must apply for EDGAR access. You’ll get an identification number (called a “Central Index Key” or “CIK” number) and a set of access codes to use for the Form D filing. Then you can use the EDGAR access to save and file Form D. 

You can also use the EDGAR process to save the form before you file and to make changes after you file. See the EDGAR Filer Manual for more detailed information and answers to your questions and this guide to definitions used in Form D.

Filing Form D With Your State

You may also need to file Form D with your state and pay a filing fee, depending on your state’s Form D filing regulations. Some states allow both paper and online filing, and other states require that Form D be filed online. You can find contact information for your state securities agency on the website of the North American Securities Administrators Association (NASAA). For filing Form D with your state online, see the NASAA Electronic Filing Depository (EFD)

After Your Form D Has Been Filed 

The SEC will authenticate your request and make a determination on it, which you’ll receive through email. If your application is rejected, the email will state the reason for the rejection and tell you how to resolve the issue(s). 

You might receive a notice of disqualification for several reasons, and these are different depending on the Rule number (i.e. 506(b) or 504). The usual reason for disqualification is a “bad actor” disqualification if one of the related persons in Item 3 of Form D has a “relevant criminal conviction, regulatory or court order or other disqualifying events.” The disqualifying event must have occurred on or after September 23, 2013, when the SEC rule amendments became effective. 

You can apply for a waiver for a good cause or court order (determination of issuing authority), but get help from an attorney to make sure you correctly complete the process. 

Key Takeaways

  • You may be able to bypass Securities and Exchange Commission regulations for registering securities if you meet certain requirements. 
  • Use SEC Form D to give notice that you are offering securities for sale without registering them. 
  • All of your investors must be accredited based on their net worth or annual earnings, and there are other requirements. 
  • Get help from a securities law firm to help you set up your securities offering and file Form D. 

Article Sources

  1.  U.S. Securities and Exchange Commission. "Exemption for limited offerings not exceeding $5 million—Rule 504 of Regulation D." Accessed Sept. 14, 2020. 

  2. U.S. Securities and Exchange Commission. "Exempt Offerings." Accessed Sept. 14, 2020. 

  3. U.S. Securities and Exchange Commission. "Form D Notice of Exempt Offering of Securities." Page 6. Accessed Sept. 14, 2020. 

  4. U.S. Securities and Exchange Commission. "Filing a Form D Notice." Accessed Sept. 14, 2020. 

  5. U.S. Securities and Exchange Commission. "Disqualifications of Felons and Other 'Bad Actors' from Rule 506 Offerings and Related Disclosure Requirements." Accessed Sept. 14, 2020.