What is a Section 3(b) Registration Exemption?

Section 3(b)(1) Exemption – Section 3(b)(1) of the 33 Act is an exemption from registration of securities. It gives the SEC authority to define the types of exempt transactions where the value of securities issued does not exceed $5 million (small issues exemption).

Note: This statutory authority is the basis for an exemption under Rule 504 of Regulation D (discussed below).

Section 3(b)(2) Exemption – Section 3(b)(2) allows the SEC to define a new small issuance class with a limit on the amount of funds raised of $50 million. These are unrestricted securities, which can be traded freely.

Note: This statutory authority is the basis for an exemption under Regulation A+ (discussed below).