Quick Answer
Regulation D's integration test asks whether two offerings should be treated as one for exemption purposes. The current standard applies a general principle, that each offering independently satisfies registration or an available exemption, alongside four non-exclusive safe harbors; the most common is a 30-calendar-day gap between offerings, which usually avoids the analysis entirely.
Integration matters because an issuer cannot dodge a purchaser cap or a dollar limit by splitting one deal into two paperwork-separate offerings. If regulators would treat the two as a single plan of financing, the combined offering has to satisfy the exemption conditions as one transaction, purchaser count and all.
When Are Two Offerings Treated as One?
If none of the safe harbors below apply, two or more offerings are not integrated when each one, on its own facts, either satisfies registration or qualifies for an available exemption.
What Are the Four Safe Harbors That Skip the Analysis Entirely?
If any one of these applies, no integration analysis is needed at all:
- The 30-calendar-day gap. An offering made more than 30 calendar days before another offering begins, or more than 30 calendar days after another ends, is not integrated with it.
- One condition attaches when a no-solicitation offering follows one that permitted general solicitation. The issuer must then reasonably believe, for each purchaser, either that it did not solicit that purchaser by general solicitation, or that it had a substantive relationship with that purchaser before the no-solicitation offering began.
- Offers and sales made under a written compensatory plan or compensation contract, under an employee benefit plan, or under Regulation S are not integrated with other offerings. The compensatory limb is not equity only. It also reaches profit sharing, thrift, deferred compensation and pension plans.
- A registered offering is not integrated if it follows a terminated or completed offering that permitted no general solicitation; one that permitted general solicitation but sold only to qualified institutional buyers and institutional accredited investors; or one that permitted general solicitation and ended more than 30 calendar days before the registered offering began.
- Offers and sales made under an exemption that permits general solicitation are not integrated if they follow any terminated or completed offering, however soon it ended.
Exam Tip: Gotchas
- This integration test was rewritten in 2021. An older analysis built on a multi-factor facts-and-circumstances test with a fixed waiting period describes the rule as it stood before that rewrite, not the current 30-calendar-day safe harbor and general principle.
What Should You Check on Exam Day?
- Confirm the 30-calendar-day gap is the safe harbor to reach for first, not a multi-factor facts-and-circumstances test.
- Remember the condition inside the 30-day safe harbor: a no-solicitation offering following a solicited one still needs the general-principle check.
- Match written compensatory plans, employee benefit plans, and Regulation S offerings to automatic non-integration, no timing condition required.
- Confirm which of the three registered-offering safe harbors applies: a prior no-solicitation offering, a prior solicited offering limited to institutional buyers, or a prior solicited offering that ended more than 30 calendar days before the registered offering began.