What is the primary purpose of Regulation D?

The primary purpose of Regulation D is to establish exemptions from registration for private placements. This regulation plays a crucial role in facilitating capital formation by allowing companies to raise funds without the extensive requirements that are typically associated with public offerings.

Under Regulation D, companies can offer and sell securities without having to register them with the SEC, provided they meet certain conditions. This can significantly lower the cost and complexity involved in fundraising, as it allows smaller companies and startups to access capital from accredited investors and a limited number of non-accredited investors.

The regulation outlines specific criteria that must be met to qualify for exemptions, including limits on the amount of money raised and the types of investors that can participate. This approach not only streamlines the fundraising process but also encourages investment in emerging businesses while still providing some investor protections.

Other options discussed in the context of this question focus on different aspects of securities regulation, such as oversight of public offerings or mandates for annual disclosures, which do not directly align with the fundamental purpose of Regulation D.