SEC Releases FAQs on the Bad Actor Disqualification Rule – Private Investment Funds Perspective
Yesterday, the SEC released “Compliance and Disclosure Interpretations” with respect to the bad actor disqualification rule under Rule 506 of Regulation D under the Securities Act of 1933 that clarify certain aspects of the rule that became effective on September 23, 2013.
Most significantly, the SEC narrowed the definition of “affiliated issuer” for the purposes of Rule 506(d) to include only affiliates of the issuer that issue securities in the same offering as the issuer (e.g., parallel funds and feeder funds), including offerings subject to integration pursuant to Rule 502(a) of Regulation D.