Regulation D (Reg D)
Regulation D is the SEC framework letting companies raise capital by selling securities privately to investors without full SEC registration, used for most DSTs.
Definition
Regulation D is a set of SEC rules that lets companies and sponsors raise money by selling securities in a private placement without going through the expensive, time-consuming process of a full public registration. Nearly all DSTs, Opportunity Zone funds, and private real estate offerings are sold under Reg D.
The most-used exemptions are Rules 506(b) and 506(c). Both allow raising an unlimited amount of capital, but they differ on advertising and who can invest: 506(b) prohibits general solicitation and permits up to 35 non-accredited investors, while 506(c) allows public advertising but limits sales to verified accredited investors. Issuers file a Form D notice with the SEC after the first sale.
Reg D offerings are exempt from registration, not from the anti-fraud rules; sponsors must still disclose material facts, typically through a private placement memorandum. For investors, Reg D is the legal basis on which they access these private, illiquid real estate investments.
Key points
- SEC rules allowing private securities sales without registration
- Rules 506(b) and 506(c) are the most-used exemptions
- Issuers file a Form D notice with the SEC
- Exempt from registration but not from anti-fraud rules
Related terms
Jerry Baker founded Baker 1031 Investments to help exchange investors move from active property ownership into passive, institutional-quality real estate through DST, 721 exchange, mineral royalty, and Opportunity Zone strategies. He holds the FINRA Series 22 and Series 63 registrations and the Securities Industry Essentials (SIE) qualification. Read full bio →
Reviewed by the Aurora Securities, Inc. compliance team — Aurora Securities, Inc., member FINRA/SIPC. Last reviewed July 2026. Securities are offered through Aurora Securities, Inc.; Baker 1031 Investments, LLC is independent of Aurora Securities, Inc.
This glossary entry is educational and is not investment, tax, or legal advice, or an offer to sell or a solicitation to buy any security. Definitions are general and may not reflect your specific circumstances — consult your own CPA and attorney. Past performance does not guarantee future results.