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What is Reg S or Regulation S?

Regulation S provides an SEC-compliant way for non-US and U.S. companies to raise capital outside the U.S. It is not necessary to have a company in the United States of America to use Regulation S.
A Regulation S offering can issue equity or debt securities. A company that makes its offering under Reg S can also use another online method to raise capital from U.S. investors - usually Reg D 506 C or Rule 144A.

Differences between Regulation S and Regulation D: Regulation S investors from outside the U.S. can be of any wealth level, which is much easier for the investor and the company raising capital than in a Regulation D offering. Reg S is an excellent addition to Reg D because Reg S allows non-U.S. investors to invest in a U.S. company or a non-U.S. company on the same Reg D terms, but with no requirement to be accredited (wealthy) investors. Often a company raising capital will accept a lower minimum investment amount from Reg S investors than from Reg D investors.

Requirements for Regulation S: Regulation S requires that the investment offer and sale must be made to investors that are outside the U.S., and U.S. investors must not be shown the non-U.S. investor terms.*
There is no required S.E.C. registration for Reg S offerings, but proper methods and good practices must be followed. We bring in an attorney that writes a Private Placement Memorandum (P.P.M.) and Subscription Agreement for your offering - this describes the investment in legal and financial terms. With the P.P.M. and Subscription Agreement, you can raise money online through our platform if we both choose to work together.

What else can Regulation S be used for? Regulation S can also be used in combination with Rule 144A offerings. In this case, the U.S. investors must be Institutional, and they are immediately liquid to other institutional investors (QIBs) after they invest. The security can be listed for these institutions' trading purposes on exchanges called A.T.S. - Alternative Trading Systems with less disclosure and reporting requirements than on major exchanges like the NASDAQ and NYSE, and at a lower cost. Non-U.S. investors are liquid and can sell to non-U.S. investors, and after a year, they can sell to US investors. Rule 144A only works when the Issuing company's security appeals to Institutional investors. Contact us for more details on Rule 144A. Manhattan Street Capital will be making Rule 144A offerings.

*The Manhattan Street Capital site software automatically checks the location of potential investors and has the investor certify their location before allowing a non-U.S. investor to see the Reg S offering.

To engage us to help you raise capital via Reg S, contact us.

Related Content:

How much does a Regulation S offering cost?
Timeline for a Reg S offering
Timeline for a Reg D/Reg S STO via convertible notes