On October 5, the Federal Register published a set of SEC notices that could widen who counts as an accredited investor. They ask whether passing a FINRA exam, or holding a CPA license, a CFA charter, a CFP certification or certain FINRA licenses, should qualify a person. The notice on the CFP certification, for example, asks for comments by December 4, 2026. Several of the notices also restate the line that shapes how sponsors find investors. Rule 506(c) “permits general solicitation”, the SEC wrote, while Rule 506(b) does not.
If the proposals are adopted, some professionals a sponsor already meets at conferences could become eligible investors. That changes who may invest, but not how a sponsor may reach them, and general solicitation rules decide the second question. Those rules turn on the channel and the relationship, not on the wording of a message. A sponsor that picks its offering rule before the first public post keeps both routes open, while one that decides afterward may find its choices narrowed by what it has already said. The guide to accredited investor verification under 506(c) covers the verification side of that choice in depth.
What General Solicitation Means Under Rule 502(c)
Regulation D sets the default in Rule 502(c). Neither the issuer nor anyone acting on its behalf may offer or sell securities through any form of general solicitation or general advertising. The rule names advertisements, articles and notices in newspapers, magazines, television and radio. It also covers seminars or meetings whose attendees were invited by those means. Rule 506(c) is the main exception a real estate sponsor uses.
The SEC applies the same idea online in its compliance guide on general solicitation. It says an unrestricted, publicly available website is general solicitation, and that communications which condition the market for an offering may count as offers. What matters is how a message reaches people rather than how it is phrased. A modest, accurate announcement still counts if it goes to an audience the sponsor does not know.
How a Substantive Relationship Keeps 506(b) Contact Private
A sponsor raising under Rule 506(b) usually stays outside the rule by approaching only people with whom it has a preexisting substantive relationship. SEC staff explained the idea in interpretations issued in August 2015, as summarized by Skadden. The relationship must exist before the offering begins. It is substantive when the sponsor holds enough information to judge the person’s financial circumstances and sophistication, and an investor’s own statement, with nothing else, is not enough.
The staff said registered investment advisers, like registered securities firms, can build these relationships on an issuer’s behalf. A sponsor can build them directly too, although Skadden noted the staff saw that as harder without earlier business dealings. Sharing factual business information about the company is not general solicitation either. Projections and forecasts, however, generally fall outside that category, so a sponsor’s public material stays with facts about its business.
Where General Solicitation Starts on LinkedIn and Websites
Most sponsors now meet investors online, which is where the line is easiest to cross. A LinkedIn post announcing that a deal is raising capital reaches every follower, and most followers are people the sponsor has never assessed. A public webinar about a live offering, a paid social ad or an open landing page with deal terms works the same way. Because Rule 502(c) covers anyone acting on the issuer’s behalf, posts by principals, placement agents and marketing firms count as well.
Content about the business is treated differently from content about an offering. A sponsor can usually write about its markets, its property types and its operating history without offering anything. The point at which that writing starts to condition the market depends on facts and timing. Securities counsel should therefore check a content calendar before a raise begins, rather than after a post has gone out.
What General Solicitation Under 506(c) Requires in Return
Rule 506(c) took effect on September 23, 2013, and lets a sponsor solicit openly on two conditions. Every purchaser must be accredited, and the sponsor must take reasonable steps to verify that status. The rule lists methods that count without making them mandatory. A sponsor can examine IRS forms showing income for the two most recent years, or asset and liability documents dated within the prior three months. It can also rely on a written confirmation from a registered securities firm, an investment adviser registered with the SEC, a licensed attorney or a CPA.
An investor verified once can give a written representation at later sales for five years under the same rule. SEC staff added another route in a no-action letter on March 12, 2025, treating a high minimum investment, backed by written statements from the investor, as a relevant factor. Form D asks the sponsor to check either the 506(b) box or the 506(c) box, not both, so the choice becomes a matter of public record.
Open marketing also brings closer attention to what is said. The 2013 rules created no exemption from the antifraud provisions, as ABA Business Law Today noted. Every post, deck and web page must be accurate and describe the risks plainly, including loss of capital, illiquidity, falling property values and distributions that may not be paid. Investors abroad add a separate boundary, because a parallel raise under Regulation S has its own marketing test, explained in the guide to Regulation S offerings.
Moving From 506(c) Back to 506(b)
A sponsor sometimes solicits publicly for one deal and wants to raise the next one quietly. SEC staff addressed this in its interpretations of Rule 152, in an answer dated January 23, 2026. An issuer that generally solicited investors under 506(c) may later sell to them under 506(b), the staff said, if it established a substantive relationship with them before the 506(b) offering began. The quality of that relationship is the most important factor, and the passage of time alone does not create one.
In practice, a public campaign does not close the private route for good, but it moves the burden onto records. A sponsor needs to show what it knew about each investor and when it learned it. Sponsors who expect to use both rules over the years therefore keep onboarding files that would satisfy either one. The comparison of 506(b) and 506(c) sets out how sponsors choose between the rules in the first place.
What Sponsors Can Do Before the First Post
The decision works best in a fixed order, settled with securities counsel before any material is written. Each step below is far easier to take early than to repair once a campaign is running.
- Choose the offering rule for the raise and record why, including whether any investors who are not accredited may take part.
- List every channel the raise will use, including the personal accounts of principals and any outside marketing firm.
- For a 506(b) raise, document the substantive relationship with each person before sharing any deal details.
- For a 506(c) raise, set the verification method for each type of investor before the first sale.
- Have counsel check the content calendar, decks and landing pages for accuracy and plain risk disclosure.
- Keep onboarding records detailed enough to support either rule on a future deal.
Raveum offers sponsors four solutions, an investment management platform, fund administration, a global raise track under Regulation S and an operating partnership for selected sponsors. U.S. investors come in under Rule 506(c) and receive K-1s, and sponsors keep their investor relationships, their property and their business plan. See how the Raveum Sponsor Program works.
Choosing the Lane Before the Message
The October 5 notices may eventually change who counts as an accredited investor, but they leave the general solicitation line where it has stood since 2013. Rule 502(c) still asks how a sponsor reached each person, and Rule 506(c) still trades open marketing for verification of every purchaser. Taken together, the rules and the staff guidance point one way. Relationships and records, not careful wording, decide which rule a raise can rely on, so the choice belongs at the start of the raise rather than after the first post. The 506(c) verification guide covers the work that follows once a sponsor chooses open marketing.
Frequently Asked Questions
What Counts as General Solicitation Under Regulation D?
General solicitation is any offer made through public means, such as advertisements, articles, broadcasts, public websites or seminars whose attendees were invited publicly. Rule 502(c) bars it in most Regulation D offerings, including Rule 506(b). The test looks at how a message reaches people, so a modest post can still count when it goes to an audience the sponsor does not already know.
Does a Sponsor's Website Count as General Solicitation?
It can. The SEC’s compliance guide says an unrestricted, publicly available website is general solicitation. A sponsor raising under Rule 506(b) usually keeps offering material behind access controls for people it already knows and describes only its business publicly. A sponsor raising under Rule 506(c) may post offering material openly, provided every purchaser is accredited and verified.
What Is a Substantive Relationship for a 506(b) Offering?
It is a relationship formed before the offering in which the sponsor holds enough information to judge a person’s financial circumstances and sophistication. SEC staff said in 2015 that an investor’s own statement, with nothing else, is not enough. Registered investment advisers and securities firms can form these relationships, and sponsors can too, although staff saw that as harder without earlier dealings.
Can a Sponsor Use 506(b) After Marketing a Deal Under 506(c)?
Yes, in some cases. SEC staff guidance on Rule 152, dated January 23, 2026, says an issuer that solicited under 506(c) may later sell to those investors under 506(b) if it built a substantive relationship with them first. Time alone does not create that relationship, so the sponsor needs records of what it learned about each investor and when.
Do the Antifraud Rules Apply to 506(c) Marketing?
Yes. The 2013 rules that created Rule 506(c) did not exempt anyone from the antifraud provisions of the securities laws. Every post, deck and landing page must be accurate and must not leave out material facts, including risks such as loss of capital and illiquidity. Sponsors should have securities counsel check campaign material before it goes live.
Will the SEC's Accredited Investor Notices Change General Solicitation Rules?
Not directly. The notices published in the Federal Register on October 5, 2026 ask whether certain credentials should qualify a person as an accredited investor. They describe Rule 506(b) and Rule 506(c) without proposing changes to either rule. They are proposals only, so a sponsor should watch for any final action and plan current raises under the rules in force today.
This article is for general education only and is not legal, tax or investment advice. Securities and tax rules change and depend on each sponsor's facts, so work with qualified securities counsel and tax advisors before launching an offering. Real estate investments involve risk, including loss of capital, illiquidity and changes in property values. Offerings on Raveum are available to eligible investors only and are not open to the general public.
