Q. Some changes appear to be coming to Form D as a result of today’s action by the SEC, lifting the ban on advertising private placements… but first, what exactly is a Form D?
A. Whenever you offer securities that are not registered with the SEC, you need an exemption of some sort. Typically, that’s a “Reg D” offering, a private placement. So a Form D is a short form that the funds that do raise money have to file 15 days after their first placement. It’s actually something that some new managers get tripped on, by the way.

Q. And why is that relevant to today’s actions?
A. So a couple of things happened today. The agency went final with its rules about advertising. But it also proposed some new rules, aimed at investors protections and data gathering. So it’s proposing changing the role of Form D, and requiring funds to file it early, before they start an offering, instead of afterwards, so the SEC can track the ads.

Q. But no specifics about what a fund can advertise, or other restrictions on what they can say?
A. Not yet, anyway. And the new rules adopted today will go into effect long before any such changes. But don’t forget that there are, in fact, always rules against making fraudulent or misleading claims… we don’t need a special rule to prevent that.

Q. So, all this does leave us in a peculiar spot, right? Mutual funds have heavy restrictions on exactly what they can say and even have to file their ads with the SEC. But hedge, PE and venture captial firms won’t have to live by similar restrictions?
A. That’s right… but of course only accredited investors can actually buy the securities. And the commission is tightening the rules a bit so that the funds taking advantage of the new ad rules do ensure that, in fact, investors are accredited.