Rule 506 is a rule promulgated by the Securities and Exchange Commission (SEC) under Regulation D that allows for the sale of certain types of unregistered securities directly to investors that meet a number of specific requirements. There are two distinct exemptions under the rule. Under Rule 506(b), a company can offer and sell securities in compliance with law and without registration if it does not use a general solicitation, sells to accredited investors or to a maximum of 35 non-accredited sophisticated investors, makes the same disclosures to the investors that the company would make for a registered offering and meets other financial statement production requirements. Under Rule 506(c), a company can publicly offer and solicit securities if all purchasers are accredited investors and the company has taken reasonable steps to verify that its investors are accredited, which typically involves a review of investor financial information to ensure the relevant income thresholds have been satisfied. Securities sold under Rule 506 are restricted securities and cannot be resold within the year period following the initial sale. While securities offerings and sales under the rule do not require registration with the SEC, filers must still complete a Form D electronic filing, which is sometimes referred to as a notice filing.