Every offer and sale of securities in the United States must either be registered under the Securities Act of 1933 or rely on an available exemption from registration. The SEC publishes a high-level summary of these exemptions. This guide turns that summary into a verification checklist for anyone reviewing an offering that claims an exemption.
The checklist below is organized around four questions: which exemption is claimed, what limits apply, what filings are required, and what the source does not establish. Each item is grounded in the SEC's descriptions, and calculations are labeled where used.
1. Identify the claimed exemption
Start by asking the issuer or promoter which specific exemption they rely on. The SEC summary lists several, each with distinct conditions. A claim of “private placement” is not enough; the specific rule matters.
- Rule 506(b): Private placements prohibiting general solicitation. The SEC describes these as transactions by an issuer not involving any public offering and limits sales to no more than 35 non-accredited investors in any 90-day period.
- Rule 506(c): Private placement permitting general solicitation. This permits general solicitation only where all purchasers are accredited investors and the issuer takes reasonable steps to verify that purchasers are accredited investors.
- Rule 504: Limited offerings of up to $10 million. This permits the offer and sale of up to $10 million of securities in a 12-month period and is often used for regional (multi-state) offerings.
- Regulation Crowdfunding: Enables certain companies to offer and sell securities on an internet-based platform through an intermediary that is a registered broker-dealer or registered funding portal.
- Regulation A: An exemption from registration for public offerings, although offerings made pursuant to this exemption share many characteristics with registered offerings.
- Rule 147 and Rule 147A: A “safe harbor” under Section 3(a)(11) and the intrastate offering exemption under Rule 147A permit companies to raise money from investors within their state without concurrently registering the offers and sales at the federal level.
- Rule 701: Exempts certain sales of securities made to compensate employees, consultants and advisors in a non-capital raising transaction and is not available to Exchange Act reporting companies.
If the issuer cannot name a specific exemption, that is a red flag. The SEC summary notes that every offer and sale must either be registered or rely on an available exemption, most of which are listed.
2. Match the claimed exemption to its limits
Once you know the claimed exemption, compare the offering’s actual terms against the limits the SEC describes. The table below summarizes what to check for each exemption.
| Exemption | What to check | Source |
|---|---|---|
| Rule 506(b) | Whether general solicitation is absent and whether the number of non-accredited investors stays within the 35-investor limit per 90-day period. | c03 |
| Rule 506(c) | Whether all purchasers are accredited investors and whether the issuer takes reasonable steps to verify accreditation. | c04 |
| Rule 504 | Whether total securities sold in any 12-month period stay at or below $10 million; note the source describes this as often used for regional (multi-state) offerings, which is distinct from the intrastate Rule 147/147A framework. | c05 |
| Regulation Crowdfunding | Whether the platform is an internet-based platform and whether the intermediary is a registered broker-dealer or registered funding portal. | c10 |
| Regulation A | Whether the offering is structured as a public offering and whether the issuer acknowledges that it shares many characteristics with registered offerings. | c11 |
| Rule 147 / 147A | Whether the offering and investors are genuinely within the single state, and confirm any business-location condition against the rule text (not described by the source). | c12 |
| Rule 701 | Whether the sales compensate employees, consultants or advisors in a non-capital raising transaction, and whether the issuer is an Exchange Act reporting company (which would disqualify it). | c13 |
Calculation example (Hypothetical): If an issuer claims Rule 504 and reports $4 million sold in January and $3 million sold in June of the same calendar year, the total is $7 million, which is within the $10 million 12-month limit. If a further $4 million is planned for September, the cumulative total would be $11 million, exceeding the limit by $1 million. This is a hypothetical illustration, not a real offering.
3. Check required filings and fees
For offerings relying on Rule 506(b), Rule 506(c), or Rule 504, the SEC requires a Form D notice. The issuer must file this notice within 15 days after the first sale of securities. The SEC does not charge a filing fee for a Form D notice or amendment. Form D notices and amendments must be filed online using the SEC’s EDGAR system.
Your checklist should include: Has a Form D been filed? Was it filed within 15 days of the first sale? Is it available on EDGAR? If the issuer cannot point to a Form D for a Regulation D offering, ask why. The SEC summary does not describe Form D requirements for Regulation Crowdfunding, Regulation A, Rule 147, or Rule 701, so those exemptions may have different filing obligations not covered here.
4. Distinguish announcement, availability, proposal, approval, and implementation
The SEC page is a summary of exemptions, not a record of any specific offering’s status. When reviewing a particular offering, separate what is announced (the issuer’s claim), what is available (the exemption described by the SEC), what is proposed (the planned terms), what is approved (any regulatory or internal approval), and what is implemented (actual sales). The source confirms the exemptions exist and describes their conditions; it does not confirm any offering’s compliance.
What the source does not say
The SEC summary is a high-level overview. It does not address token or cryptocurrency offerings, the relationship between a company and a token, or sustainability. It does not provide the full text of the rules or describe all conditions and exceptions. It does not state whether any particular offering qualifies for an exemption. It does not address waivers of “bad actor” disqualification; the source only raises the question “What about waivers of ‘bad actor’ disqualification?” without answering it. It also does not mention filing fees for exemptions other than Form D, and it does not describe state-level filing requirements.
For a token or crypto business, this source alone is not enough to verify an exempt offering. The SEC page never mentions tokens, crypto assets, or sustainability. Any claim that a token offering relies on one of these exemptions would need to be checked against the specific rule text and any relevant guidance, which this source does not provide.
Using this checklist
To verify an exempt offering, ask for the specific exemption claimed, compare the offering terms to the limits in the table, confirm whether a Form D was filed on EDGAR when required, and treat the SEC summary as a starting point rather than a legal opinion. The SEC’s chart is a high-level summary, and the source itself notes that every offer and sale must be registered or exempt. This checklist helps organize the questions, but it does not replace reading the applicable rules or consulting a qualified professional.