Download the Code of Federal Regulations in XML.
The Electronic Code of Federal Regulations (e-CFR) is a regularly updated, unofficial editorial compilation of CFR material and Federal Register amendments produced by the National Archives and Records Administration's Office of the Federal Register (OFR) and the Government Printing Office.
Parallel Table of Authorities and Rules for the Code of Federal Regulations and the United States Code
Text | PDF
Find, review, and submit comments on Federal rules that are open for comment and published in the Federal Register using Regulations.gov.
Purchase individual CFR titles from the U.S. Government Online Bookstore.
Find issues of the CFR (including issues prior to 1996) at a local Federal depository library.
Electronic Code of Federal Regulations
Title 17: Commodity and Securities Exchanges
§230.505 Exemption for limited offers and sales of securities not exceeding $5,000,000.
(a) Exemption. Offers and sales of securities that satisfy the conditions in paragraph (b) of this section by an issuer that is not an investment company shall be exempt from the provisions of section 5 of the Act under section 3(b) of the Act.
(b) Conditions to be met—(1) General conditions. To qualify for exemption under this section, offers and sales must satisfy the terms and conditions of §§230.501 and 230.502.
(2) Specific conditions—(i) Limitation on aggregate offering price. The aggregate offering price for an offering of securities under this §230.505, as defined in §203.501(c), shall not exceed $5,000,000, less the aggregate offering price for all securities sold within the twelve months before the start of and during the offering of securities under this section in reliance on any exemption under section 3(b) of the Act or in violation of section 5(a) of the Act.
Note: The calculation of the aggregate offering price is illustrated as follows:
Example 1: If an issuer sold $2,000,000 of its securities on June 1, 1982 under this §230.505 and an additional $1,000,000 on September 1, 1982, the issuer would be permitted to sell only $2,000,000 more under this §230.505 until June 1, 1983. Until that date the issuer must count both prior sales towards the $5,000,000 limit. However, if the issuer made its third sale on June 1, 1983, the issuer could then sell $4,000,000 of its securities because the June 1, 1982 sale would not be within the preceding twelve months.
Example 2: If an issuer sold $500,000 of its securities on June 1, 1982 under §230.504 and an additional $4,500,000 on December 1, 1982 under this section, then the issuer could not sell any of its securities under this section until June 1, 1983. At that time it could sell an additional $500,000 of its securities.
(ii) Limitation on number of purchasers. There are no more than or the issuer reasonably believes that there are no more than 35 purchasers of securities from the issuer in any offering under this section.
(iii) Disqualifications. No exemption under this section shall be available for the securities of any issuer described in §230.262 of Regulation A, except that for purposes of this section only:
(A) The term “filing of the offering statement required by §230.252” as used in §230.262(a), (b) and (c) shall mean the first sale of securities under this section;
(B) The term “underwriter” as used in §230.262 (b) and (c) shall mean a person that has been or will be paid directly or indirectly remuneration for solicitation of purchasers in connection with sales of securities under this section; and
(C) Paragraph (b)(2)(iii) of this section shall not apply to any issuer if the Commission determines, upon a showing of good cause, that it is not necessary under the circumstances that the exemption be denied. Any such determination shall be without prejudice to any other action by the Commission in any other proceeding or matter with respect to the issuer or any other person.
[47 FR 11262, Mar. 16, 1982, as amended at 54 FR 11373, Mar. 20, 1989; 57 FR 36473, Aug. 13, 1992]