Private Fund Managers: New Form D is in Effect

A new Form D is now effective and must be utilized by private fund managers in making future filings and amendments. Changes to Form D were needed as a result of recent changes to the Regulation D private placement safe harbor including: (1) a new set of procedures for issuers to follow in conducting certain general solicitation activities; and

(2) the imposition of certain "bad actor" disqualifications that now apply to all Regulation D offerings.

Private fund managers not conducting a "general solicitation" will need to check a box marked "Rule 506(b)" (as opposed to "Rule 506") and - by signing the Form D - to certify that the issuing fund is not subject to any "bad actor" disqualification.

In the wake of the new and proposed changes to Regulation D, all private fund managers should review their Form D reporting of sales of interests in their private funds. We are advising private fund managers to:

(1) ensure that all personnel in the data-gathering and reporting chain understand the differences between a Rule 506(b) offering and a Rule 506(c) offering; and

(2) review and understand the requirements of the new Form D.

Cheryl Spratt