On December 4, 2013, the staff of the Division of Corporate Finance of the SEC published “Compliance and Disclosure Interpretations” (interpretative guidance) addressing the applicability of the recently-adopted “bad actor” disqualification provisions (Rules 506(d) and (506(e)) recently adopted by the SEC as part of its JOBS Act rulemaking.  See “SEC JOBS Act Rulemaking Creates Opportunities and Potential Burdens for Hedge Funds Contemplating General Solicitation and Advertising,” Hedge Fund Law Report, Vol. 6, No. 28 (Jul. 18, 2013).  The interpretative guidance addressed, among other things, the scope of covered persons and disqualifying events covered by the rules, acceptable due diligence measures that issuers can employ to avoid disqualification, guidance with respect to an issuer’s dealings with compensated solicitors to avoid disqualification, circumstances in which issuers need not and cannot seek waivers from application of Rule 506(d) and the scope of an issuer’s Rule 506(e) disclosure obligations.  The interpretations have numerous implications for hedge funds that seek to offer securities in reliance on Rule 506.  This article summarizes key takeaways from the interpretative guidance and outlines important implications for hedge fund issuers arising out of the guidance.  For additional insight on interpretation of the bad actor disqualification provisions, see “How Can Hedge Fund Managers Negotiate the Structuring, Operational and Due Diligence Challenges Posed by the Bad Actor Disqualification Provisions of Rule 506(d)?,” Hedge Fund Law Report, Vol. 6, No. 39 (Oct. 11, 2013).