What Are the Primary Regulatory Exemptions Used for STOs?

STOs typically rely on the same regulatory exemptions as traditional private placements to avoid public registration with securities authorities like the SEC. In the U.S. the most commonly used exemptions are under Regulation D, specifically Rules 506(b) and 506(c).

These rules permit issuers to sell securities to accredited investors. Other exemptions like Regulation A+ (for a broader investor base) and Regulation S (for non-U.S. investors) are also utilized, depending on the offering's structure.