Quick Answer
The no-solicitation private placement exemption caps sales at 35 purchasers from that issuer in any 90-calendar-day period, or at as many as the issuer reasonably believes are no more than 35. Accredited investors, close relatives sharing the purchaser's residence, and majority-owned trusts or entities linked to the purchaser are excluded from that count, so sales to accredited investors are unlimited.
This count is why a private placement can involve far more than 35 people in practice. Only a purchaser who is neither an accredited investor nor one of the related persons listed below counts toward the ceiling; an issuer can sell to an unlimited number of accredited investors alongside up to 35 counted purchasers.
How Many Purchasers Can Buy in a Single Offering?
An issuer may sell to no more than 35 purchasers of securities from that issuer in any 90-calendar-day period. The rule is also satisfied where the issuer reasonably believes there are no more than 35, so an honest, well-documented count that later proves wrong does not automatically break the exemption.
Exam Tip: Gotchas
- The 90-calendar-day window is part of the purchaser limit. A choice that describes the cap as simply "no more than 35 purchasers, ever" leaves out the window and misstates the rule.
Which Purchasers Are Excluded From the 35-Purchaser Count?
| Excluded purchaser | Why it's excluded |
|---|---|
| Any accredited investor | Not counted toward the cap at all |
| A relative, spouse, or the spouse's relative who shares the purchaser's primary residence | Treated as part of the purchaser's own household |
| A trust, estate, corporation, or other organization in which the purchaser and those relatives collectively hold more than 50% of the beneficial or equity interest | Treated as controlled by the purchaser |
Exam Tip: Gotchas
- Neither the purchaser cap nor this exclusion list states "35 non-accredited purchasers" as a single phrase on its own. That figure only emerges from reading the bare 35-purchaser cap together with the rule that excludes accredited investors from the count.
How Does an Entity Purchaser Count?
- A corporation, partnership, or other entity generally counts as one purchaser.
- Exception: if the entity was formed for the specific purpose of acquiring the offered securities and is not itself accredited, each beneficial owner of the entity counts as a separate purchaser.
- A non-contributory Employee Retirement Income Security Act (ERISA) benefit plan counts as one purchaser when the trustee makes all investment decisions for the plan.
- An investment adviser's client, or a broker-dealer's customer, counts as a purchaser individually, however much discretion that client gave the adviser or the firm.
What Should You Check on Exam Day?
- Confirm the purchaser cap is 35 within any 90-calendar-day period, not "35 purchasers ever," and remember an actual count of 35 or fewer or the issuer's reasonable belief in one satisfies it.
- Confirm accredited investors never count toward the 35-purchaser limit, so sales to them are unlimited.
- Check whether an entity purchaser was formed specifically to buy the offered securities; if so and it is not accredited, count each beneficial owner separately.
- Confirm a non-contributory ERISA plan counts as one purchaser only when the trustee makes all investment decisions.
- Count each advisory client or brokerage customer separately; discretion given to the adviser or firm does not merge them into one purchaser.