In October 2024, Florida amended its blue sky law so that the “bad actor” disqualification provisions of Rule 506(d) under the Securities Act of 1933 also would apply to, among other exempt transactions, offerings to Florida institutional investors under Section 517.061(9) of the Florida Securities and Investor Protection Act. This amendment caused the securities industry to question whether sales could be made to Florida institutional investors under Rule 144A under the Securities Act as well as pursuant to certain other exemptions under the Securities Act. Since October 2024, the amendment was stayed pursuant to various executive orders.
After consultation with securities law practitioners, the Florida legislature recently adopted additional amendments to the Florida Securities and Investor Protection Act, which were signed into law on May 16, 2025. The new amendments remove the application of the bad actor disqualification provisions to the institutional purchaser exemption provided by Section 517.061(9) of the Florida Securities and Investor Protection Act. Among other changes, the list of permissible institutional investors under Section 517.061(9) was expanded to include institutional accredited investors under Rule 501 under the Securities Act.