Rule 508: Insignificant deviations
Rule 508 keeps a minor mistake from costing you the exemption for a particular sale, if you meet three conditions.
Last reviewed November 2026
The three conditions
A failure to meet a condition of Rule 504 or 506 doesn’t cost the exemption for an offer or sale to a particular person if the issuer shows that:
- the failure didn’t involve a condition meant to protect that person;
- the failure was insignificant to the offering as a whole; and
- the issuer made a good faith and reasonable attempt to comply with every condition.
Failures that are always significant
- General solicitation in violation of Rule 502(c)
- Exceeding Rule 504’s dollar limit
- Exceeding Rule 506(b)‘s limit on non-accredited purchasers
Limits
Rule 508 protects against claims by investors. The SEC can still bring an enforcement action for the failure, and states may not give the same relief. Issuers are expected to meet every condition, so treat Rule 508 as a backstop, not a plan.
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