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Using PPM Fast and the Internet! (Virtual Offering Room)
Rules for conducting a Reg D Offering Online
1. Improper use of the Internet can expose an issuer (entrepreneur trying to raise capital) and its officers and directors to enforcement action by the SEC and jeopardize their ability to rely on the safe harbor of Regulation D of the Securities Act of 1933.
2. A fundamental requirement of Regulation D is that there be no general solicitation or advertisement used in connection with the solicitation of an investment.
3. Issuers may not provide offering materials on a website, unless the offering materials are only provided to prospective investors who have a pre-existing substantive relationship with the issuer or an "agent of the issuer (sponsor)."
4. Issuers establishing websites are advised to keep nominal information on the home page of a website, indicating the name of the issuer and requesting the viewer to provide their name and password to access additional information on any interior page.
5. Contact information, past performance, investment strategy, experience of management and all other material specific to the issuer or the sponsor (assuming the sponsor is not registered as an investment adviser) should not be contained on the home page or any page that is accessible by the public. Issuers should not link any of the interior pages of their website to other websites.
6. An issuer may supply information about an offering on a third party's website if, in part, the following procedures are followed:
- The site is password protected;
- The home page of the site makes no reference to a specific issuer;
- The interior pages of the site are only available to prospective investors that complete a questionnaire establishing that they are "accredited investors;" and
- Prospective investors are required to wait 30 days following their qualification to access the site before investing in any of the posted issuers (other than issuers in which such prospective investor already has invested, has already been notified about an offering, or is already considering as an investment opportunity).
7. An issuer which posts information on a third party's website will not be deemed to be "holding itself out" to the public as an investment adviser if the posted information solely relates to a specific confidential offering and does not provide any information regarding other investment services or investment products offered by the issuer.
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