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What is Reg S or Regulation S?

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Reg S can be a good compliment to Reg D, in that Reg S allows non-US investors to invest in a US company on a similar basis to the Reg D terms, without the need to be accredited investors.

Regulation S provides an SEC compliant method for company capital offerings that are made outside the U.S by both foreign and U.S issuers. Regulation S, which was adopted by the Securities and Exchange Commission (the “SEC”) in 1990, provides that offers and sales of securities that occur outside of the United States are exempt from the registration requirements of Section 5 of the Securities Act of 1933 (the “Securities Act”).

Regulation S provides an exclusion from the registration requirements, for offerings that made outside the U.S by both foreign and U.S issuers.  A Regulation S offering can be private or public and can issue both equity and debt securities. Reg S is non‐exclusive, which means that an issuer that conducts their offering under Reg S also may claim the availability of another applicable exemption from registration (such as Reg D).

Reg S has two general conditions that have to be satisfied:

  • The offer or sale must be made in an offshore transaction. The Manhattan Street Capital site software checks the location of potential investors before allowing a non-US investor to see the Reg S offering.
  • No “directed selling efforts” may be made in the U.S. by the issuer, a distributor, any of their respective affiliates, or any person acting on their behalf.

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