The Securities and Exchange Commission adopted a new rule Wednesday to implement a JOBS Act requirement to lift the ban on general solicitation or general advertising for certain private securities offerings for business startups, while also adopting rules to discourage fraudsters from touting the investments and to add new protections for investors.

Companies seeking to raise capital through the sale of securities generally must either register the securities offering with the SEC or rely on an exemption from registration. Most of the exemptions from registration prohibit companies from engaging in general solicitation or general advertising—that is, advertising in newspapers or on the Internet among other things—in connection with securities offerings. Rule 506 of Regulation D is the most widely used exemption from registration.

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