Regulation S — Preliminary Notes
1. The following rules relate solely to the application of Section 5 of the Securities Act
1933 (the Act) and not to antilraud or other provisions of the federal securities
Laws.
2. ln view of the objective of these rules and the policies underlying the Act,
Regulation S is not available with respect to any transactión or series of
transactions that, although in technical compliance with these rules, is part of a
plan or scheme to evade the registration provisions of the Act. In such cases,
registration under the Act is required.
3, Nothing In these rules obviates the need for any issuer or any other person to
comply with the securitios registration or broker-dealer registration requirements of
the Securilies Exchange Act (the Exchange Act), whenever such requirements are
applicable.
4, Nowing in ese rules obviates the need to comply with any applicable state law
relabrig to the offer and sale of securities.
5. Attempted compliance with any rute ín Regulation $5 does not act as an exclusiva
election; a person making an offer or sale of securities may also claim the
availability of any applicable exemplioa from the registration requirements of the
Act, The avallability of the Regulation S safe harbor to offers and sales that occur
úutside af the United States will not be affected by the subsequent offer and sale of
these securitiés into the United States or to U.S. persons during the distribution
compliance period, as long as the subsequent offer and sale are made pursuant Lo
registration or an exemption therefrom under the Act.
€. Regulation $ is avoileble only tor offers and sales 6f securitles outside the United
States. Securities acquired overseas, whether or not pursuant Lo Regulation S, may
be resold in the United States only If they aro registered under the Act or an
exemplion from registration ls avallable,
7. Nothing lo these rules precludes access by journalists for publications with a general
circulation in the United States to offshore press conferences, press releases and
meetings with company press spokespersans in which an offshore offenmg or tender
offer ls discussed, provided that the information ls made available to the foreign
and United States press generally and is not intended to induce purchases of
securities by persons In the United States or tenders of securities by United States
holders in the case of exchange offers. Where applicable, issuers anal bidders may
also look to Rule 1358 and Rule 14d-1(c) of this chapter, Where applicable, issuers
and bidders may also book to Role 135e and Rule 14d-1(0).
3. The provisions of Uis Regulation 5 shall not apply to offers and sales of secuntles
issued by open-end Investment companies ar unit investment trusts registered or
required to be registered or closed-end Investment companies required to be
registered, but nat registered, under the Investment Company Act of 1940 (tha
1940 Act),
Rule 901 — General Statement
For the purposes only of suction 5 of the Act, the terms offer, offer to sell, sell, sale, and
offer to buy shall be deemed to include offers and sales that occur within the United States and
shall be deemed not to include offers and sales thal occur outside the United States.
Rule 902 — Definitions
As used In Regulation S, the following terms shall have the meanings indicated.
a. Debt securilies. “Debt securittes” of an issuer is defined to mean any security other
than an equity security as defined in Rule 105, as well es the following:
l
Nor-participatory preferned stock, which is defined as non-convertible
capital stock, the holders of which are entiticd to a preference in payment
of dividends and in distribution of assets on llquidation, dissolutíon, or
winding up of the issuer, but are not entitled to participate in residual
camings or assets of the issuer; and
Asset-backed securitles, which are securjitles of a type that either:
i Represent an ownership interest in a pool of discrete assels, or
certificates ol interest or participation n such assets (including any
rights designed to assure servicing, or the receipt or timeliness of
receipt by holders of such assets, or dertificates of interest or
participation ín such assets, ol amounts payable thereunder),
provided that Che assets are not generated or orlginated between
the issuer of the security and lts affiliates; or
tl. Are secured by one ar mare assets or cerlificates of interest or
participation in such assets, and the securities, by their terms,
provide for payments of principal and interest (any) in relation to
payments or reasonable projections of payments on assets meeting
the requirements of paragraph (a)(2)(1) of thés section, or
certificates of interest or participations In assets meeting such
requirements.
Hi. For purposes of paragraph (a)(2) of this section, the term “assets”
means securities, installment sales, accounts recelvabíe, notes,
leases or other contracts, or other assets that by their terms
convert Into cash ower a finite period of time.
b. Designated offshore securities market. “Designated offshore securities market”
means:
1.
The Evrobornd mariott, as regulated by the International Securitlaes Marlest
Association; the Alberta Stock Exchange; the Amsterdam Stock Exchange:
the Australian Stock Exchange Limited; the Bermuda Stock Exchange; the
Bourse de Bruxelles; the Copenhagen Stock Exchange; the European
Association of Securities Dealers Automated Quotatlon: the Frankfurt Stock
Exchange; the Helsinki Stock Exchange; The Stock Exchange of Hong Kong
Limited; the Irish Stock Exchange; the Istanbul Stock Exchange; the
Johannesburg Stock Exchange; tie London Stock Exchange; the Bourse de
Luxembourg; the Mexico Stock Exchange; the Borsa Valori dl Milan; the
Montreal Stock Exchange; the Oslo Stock Exchange; the Bourse de Paris;
the Stock Exchange of Singapore Ltd, ; ne Stockholm Stock Exchange; the
Tokyo Stock Exchange; the Toronto Stock Exchange; the Vancouver Stock
Exchange; the Warsaw Stock Exchange and the Zurich Stock Exchange; and
Any foreign securities exchange or nan-exchange market, designated by the
Commission. Attributes ta be considered in determining whether ta
designate an offshore securities emarkoat, among others, include:
Il. Organization under forelgn law;
H. Association with a generally recognized community oF brokers,
deslers, banks, or other professional intermediaries with an
estatlished operating history;
ill. Oversight by a governmental or self-regufatory body;
iv. Oversight standards set by an existing body of lave;
Y. Reporting of securities transactions on 4 regular basis to a
governmental or self-ragulatory body;
vi. A system for exchange of price quotations through common
communicadiors media; and
vil, An organized clearance and settlement system,
Cc Directed selling eñorts,
1,
2
3.
“Directed selling efforts” means any activity undertaken for the purpose of,
or that could reasonably be expected to have the effect of, conditioning the
market in the United States for any of the securities being ofiered in
rellance on this Regulation $5 (Rute 901 through Rule 905, and Preliminary
Notes). Such activity includes placing an advertisement in a publication
“esth a general circulation In the United States” that refers to the offer! nu of
sécurities being made in rellance upon this Regulation 5.
Publication “with á general circulation in the United States”:
L is defined as ary publication that ds printed primarily for distributton
ln the United States, or has had, during the preceding twelve
reéntás, an average circulation ln (he United States of 15,000 ar
more copies per Issue; and
tl Wilk encompass anty the U.S, edition of any publication printing a
separate U,S, edition If the publication, without considering lts U.S.
edition, would not constitute a publication with 3 general circulation
in the United States,
The following are not “directed selling efforts”:
l Placing an advertisement required to be published under U.S. or
foreign laws, or under rules or regulations of a U.S. or foreign
regulatory or self- regulatory authority, provided the advertisement
contains no more information than legally required and includes a
statement to the effect thal the securitles have not been registered
under the Act and may not be offered or sold in the United States
(or to a U.S. person, ifthe advertisement relates to an offering
under Category 2 or 3 (paragraph (5)(2) or (bI(3)) in Rute $03)
absent registration or an applicable exemption from the registration
requirements;
Contact with persons excluded from the definition of “U.S. person”
Dursuant to paragraph (k)(2)L(v1) of this section or persons haiding
accounts excluded from the definition of “U.S. person” pursuant to
paragraph ()(2)(0 of this section, solely in thedr capacities as
holders af such accounts;
A tembstone advertisement In any publication with a general
circulation in the United States, provided:
A. The publication has less than 20% of its circulation,
calculated by aggregating the circulation of lts U.S. and
comparoble non-1.5. editions, in the United States;
B, Such advertisement contains a legend ta the effect that the
securities have not been registered under the Act and may
not be offered or sold in the United States (or to a U.S.
person, lfthe adwertisement relates to an offering under
Category 2 or 3 (paragraph (b)(2) or (b)(3)) ln Rule 903)
absent registration or an appiicabla exemption from the
registration requirements; and
€, Such advertisement contains no more information than:
1. The issuer’s name;
2. The amount and title of the securities being sold;
2 A brief indicatlon of the issuer’s general type of
business;
4. The price of the securties;
5. The yield of the securities, ¡fdebt securíbles with a
fixed (non- contingent) Interest provision;
6, The name and address af Lhe person placing the
advertisement, and whether such person 19
participating ln the distribution;
7. The names of the managlog underwriters;
B, The dates, if any, upon which the sales commenced
and cancluded;
9, Whether tha securities are offered or were offered
by rights issued to security holders and, Moo, the
class of securities that are entilled or were entitled
to subscribe, the subscription ratio, the record date,
the dates (If any) upon which the rights were issued
and expired, and Uhe subscription price; and
10, Any legend required by law or any foreign or U.S.
regulatory or self- regulatory authority;
iv. Bona fde visits to real estate, mants or other facilities located in the
United States and tours thareof conducted for a prospective investor
by an issuer, a distributor, any of thelr respective affiliates or a
person acting on behalf of any of the foregolno;
v. Distribution in the United States of a foreign broker-dealer’s
quotations by a third-party system that distributes such quotations
primarily in foreign countries if:
A. Securities transactións cannot be executed between foreign
broker-deaters and persons ín the United States through the
system; and
B. The issuer, distributors, theic respective afillates, persons
acting on behalf of any of the foregoing, Foreign broker-
dealers and other participants in the system do not Initiate
contacts with U.S. persons or persons wilbin ¿he United
States, beyond those contacts exermpted under Rule 15a-6
under the Exchange Act;
wi, Publication by an issuer af a notice in accordance with Rate 135 or
Rule 1350;
mil, Providing any journallst wii access to press conferences held
qutside of the United States, to meetings with the issuer or selling
security holder representatives conducted vutside the United States,
or to written press-related materials released outside the United
States, at or in which a present or proposed offering ol securitios is
discussed, if the requirements of Rule 1358 are satisfied; and
slil, Publication or distribution of a research report by a broker or dealer
in accordance with Rule 138(c) or Rute 1391b).
Distríbutor. “Distributor” means any undermwriter, dealer, or other person who
participates, pursutant to a contractual arrangement, in the distribution of the
securities affened or sold in relianee on this Regulation 5 (Rule 901 through Rule
205, and Preliminary Motes),
Domestic issuer/Foreiga isguer. “Domestic issuer” means any Issver other than a
“foreign government” or “foreign private lssuer” (both as defined in Rule 405).
“Foreign lssuer” meáns any isster other than a “domestic Issuer.”
Distribution compliance period, “Distribution complianee period” means a period
that begins when the securlties were Arst offered to persons other than distributors
in reliance pon this Regulation 5 (Rule 901 through Rule 905, and Preliminary
Notes) or the date of closing of the offering, whichever is later, and continues until
the end of the period of time specified ln the relevant provision cf Rule 903, except
that:
1. All offers and sales by a distributor sf an unsold altotment or subscription
shall be deemed to be made during the distribution compliance period;
2. Ina continuous offering, the distribution compliance period shall commence
upon completion of the distribution, as determined and certified by the
managing underwnter or person performing similar functions;
3. Ina continuous offering af non-convertible debt securities offered and sold
in identifiable tranches, the distribution complianee period for securilles in a
tranche shall commenoe upon completion of the distribution of such
tranche, as determined and certified by the managing underwriter or person
performing similar functlons; and
4, That in a continuous offering of securities to be acquired upon the exercise
of warrants, the distribution compliance period shall commence upan
completion of the distribudian ol the warrants, as determined and certified
by the managing underwriter or person performing similar funcilons, 1
requirements of Rule 993(b)(5) are satisfied,
y. Offering restrictions, “Offering restricions” means:
1. Each distributor agrees in wrlting:
L That all offers end sales of the securities prior to the expiration of
the distribution compliance period specified in Category 2 or 3
(paragraph (b)(2) or (b)(3)) in Rule 903, as applicable, shall ba
made only in accordance with the provisions of Rule 903 or Rule
204; pursuant to registration of tha securities under the Act; or
puesuant to an avsilable exemption from the registration
requirements of the Act; and
ll. For offers and sales of equity securities of domestic Issuers, not to
engage in hedging bransactions with regard Lo such securities prior
to the expiration of the distribution compliance period speciñied in
Category 2 0r 3 (paragraph (09(2) or (b)(3)) ln Rule 903, as
applicable, unless ln complisnce with the Act; and
2. All offering materials and documents (other than press releases) used in
connection with offers and sales of the securities prior to the expiration of
the distribution compllance period specified in Category 2 or 3 (paragraph
(B)(2) or (DX3)) in Rule 603, as applicable, shall include staternents to the
effect that the secunties have not been registered under the Act and may
not be offered or sold in the United States or ta U.S, persons (other than
distributors) unless the securitles are registered under the Act, or an
exemption from the registration requirements of the Act is available, For
offers and sales of equity securities of domestic issuers, such offering
materlals and documents also must state that hedalng transactions
invalving those secuntles may not be conducted untess in compliance with
tie Act. Such statements shall appear:
. On the cóver or inside cover page of any prospectus or offering
circular used in connection with the offer or sale of Uhe securilies;
ib In the undermrating section el any prospectus or offering circutar
used ln connection with the offer or sale of the securilles; and
lit. In any odvertisement made or issued by the lssuer, any distribubor,
any of thelr respective affiliates, or any person acting on behalf of
any of the foregoing. Such statements may appear in summary
forma an prospectus cover pages and in advertisenents.
h. Offshore transaction,
1. Án offer or sale of securities ls made in an “offshore transaction” af:
h
j
i The offer is hol made to a person ln the United States; and
H. Either:
A Atthe time the buy order 15 orlgimated, the buyer is outside
the United States, or the seller and any person acting on its
behalf reasonadly believe that the buyer 15 outside the
United States; or
B, For purposes of:
1. Section Rule 903, the transaction is executed in, on
or through a physical treding floor of an established
forelgn securities exchange tal ls located outside
the United States; or
2, Section Rule 904, the transaction is executed in, on
or through the facilities of a designated offshore
secunties market described in paragraph (b) of this
section, and neither the seller nor any person acting
on its behalf knows that Me transaction has been
pre-arranged with a buyer in the United States,
2. Notwithstanding paragraph (h1(1) of thils section, offers and sales of
secumnties specificaWy targeted at identifiable groups of US. citizens abroad,
such as members of the U.S. armed forces serving overseas, Shall not be
deemed bo be made in “offshore transactions.*
Notwithstanding paragraph (h)(1) of this section, offers and sales of
securities to persons excluded from the definition of *U,S, person” pursuant
to paragraph (k)(2)(vi) of this secthorn or persons holding accounts excluded
from the definition of “U.S. person” pursuant ta paragraph (k)(2)(0) of this
section, solely ln thelr capacities as holders of such accounts, shall be
deemed to be made ín “offshore transactions,”
Notelthstanding paragraph (H)(1) of this sectian, publication or distribudon
of a research report ín accordance with Rule 138(c) or Rule 139(b) by a
broker or dealer at or around the time af an offering ín relíance on
Regulation $ will not cause the transaction to fall to be an offshore
transaction as defined in this section.
Reporting issuer. “Reporting lssuer” means an issuer other Chen an investment
company registered or required to register under the 1940 Act that:
1
Has a ciass of securities registered puesuant to Section 12(b) or 12(q) of
the Exchange Act or ls required to Mé reports pursuant to Section 15(d) of
the Exchange Act; and
Has flled all the material required to be filed pursuant to Section 13(a) or
15(1) of the Exchange Act for a pertod of at least twelve mantis
immediately preceding the offer or sale of securities made in reliance upon
this Regulation $ (Rule 901 through Rule 905, and Preliminary Notes) (or
for such shorter period that the issuer was required to file such material).
Substantial U.S. market Interest,
l. “Substantial U.S. market Interest” velth respect to a class of an issuer’s
equity securities means:
l The securities exchanges and inter-dealer quotation systems in the
United States in the aggregate constituted the single largest market
for such class of securities in the shorler of the issuers prior fiscal
year os the period since the tssuers incorporatlan; or
li. 20 percent ar more of all trading in such clazs of securities took
place in, on or through the facilities of securities exchanges and
inter-dealer quotation systems in the United States and less than 55
percent of such trading took place in, an ar through the Facilities of
securitles markets of a single foreign country in the shorter of the
issuer’s prior fiscal year or the perlod since the issuer’s
incorporation,
2. “Substantial U.S. market Interest” with respect to an issuer’s debt securitias
means:
lis debt secunties, in the aggregate, are held af record (es thal
term is defined in Rute 1295-1 under the Exchange Act and used for
purposes of paragraph ($)(2) of this section) by 300 ar more U.S.
persons;
il $1 blilion or more of: The principal amount cutstanding of lts debt
securities, the greater of liquidation preference or par value of its
securities described im Rule 902(a1(1), and the principal amount er
principal balance of lts securities described in Rule 3992(2)(2), in the
aggregate, ls held of record by U.S. pessons; and
Mi. 20 percent or mora of: The principal amount outstanding of its debt
Securitles, the greater of Iiquidation preference ar par value of its
sécurities described in Rule 902(a)(1), and the principal amount or
principal balance of its securities described in Rule IOMA), la the
agogregate, ís held of record by 1,S, persons.
3. Notwlthstanding paragraph (3)(2) of £his section, substantial U.S, market
interest with respect to an issuer’s debt securities is calculated without
reference to securities that qualify for the exemption provided by Section
2813) of the Act.
k. US, person,
Lo “4,5. person” means;
1 Any natura! person resident ln the United States;
ll, Any partnership or corporation organized or incorporated under the
laws of the United States;
il Any estate of which any executor or administrator 15 4 1.5. person;
Me Any trust of which any trustee is a U.S, person;
*. Any agency ar branch of a foreign entity located in the United
States;
vi,
vii,
vih,
Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
Any discretionary account or similar account (other than an estate
or trust) held by a dealer or orher Aductary organized, incarparated,
or (if an individual) resident ln the United States: and
Any partnership or corporabon if
A. Organized or Incorporated under the laws of any foreign
jurisdiction; and
B. Formed by a U.S. person principally for the purpose of
investing in securitles not registered under the Act, unless it
is organized or incorporated, and owned, by aceredited
investors (as defined in Rute 501(8)) who are not natural
persons, estates or trusts.
¿. The following are nat “U.S. persons”:
úl,
wi.
Ar discretionary account or similar account (other than an estate
or trust) held for the benefit or account of a non-U.S. person by a
desler or other professional fiduciary organized, incorporated, or (M
an individual) resident in the United States;
Any estate of which any professional fiduciary acting as executor or
adeministrator ts a U.S. person if
A. fa executor or administrator of the estabe who is not a U.S.
person has sole or shared investment discretión with
respect to the assets of the estate; and
B. The estate ls governed by foreign law;
Any trust of which ary professional fiduciary acting as trustee is a
U.S. person, ¿Fa trustee ho is not a U.S. person has sole or shared
investment discrition with respect to the trust assets, and no
beneficiary of the trust (and no settlor if the trust is revocable) ls a
U.S, person;
An employee benéñit plan established and administered in
accordance with the lay sf a country other han the United States
and custamary practices and documentation of such country;
Any agency or branch of a U.S, person located outside the United
States If:
A. The agency or branch operates for valid business reasons;
ónd
B. The agency or branch is engaged ln the business ol
insuranos or benking and is subject to substantive insurance
or banking regulation, respectively, in the jurisdiction where
located; and
The Intemational Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development
Bank, the Astan Development Bank, the African Development Bank,
the United Natlons, and their agencies, affiliates and pension plans,
and any other similar international onganizations, thelr agencies,
affiliates and pension plans.
|. United States, “United States” mesas the United States of fimerica, its termitories
and possessions, any State of the United States, and the District of Columbia,
Rule 903 — Offers or Sales of Securities by the Issuer, a
Distributor, Any of Their Respective Affiliates, or Any
Person Ácting on Behalf of Any of the Foregoing;
Conditions Relating to Specific Securities
a. An offer or sale of securlties by the issuer, a distributor, eny of their respective
affílllates, or any person acting on behalf of any af the foregolng, shall be deemed to
occur outside the United States velthin the meaning of Rule 901 if:
L. The affer or sale ls made In an ofíshore transaction;
2. No directed selling efforts are made in the United States by the issuer, a
distributor, any of their respective affiliates, or any person acting on behalf
of any of the foregolng; and
3. The conditions of paragraph (b) of this section, as applicable, are satisiled,
b. Additianal Conditions.
1. Category 1. Na conditions other than those set fort in paragraph (2) apply
to securities ln this category. Securities are eligible for this estegory if
l The securities are issued by a forelgn Issuer that reasonably
believes at the commencement of the offerina that:
A. There is no substantial U.S, merket interest in the class of
securíbies to be offered or sold (if equity securitios are
offered or sold);
Bl, There Is no substantial U.S, market interest in íts debí
securities (if debe securitlies are offered or sold);
E. There is no substantial U.S. market interest in the securitles
to be purchased upon exercise (if warrants are offered or
sold; ard
D, There ls no substantial U.S. market interest in either the
convertible securities or the undenying securities (If
convertible securities are offered or sotd);
h. The securities are offered and sold in en overseas directed offering,
which means:
4. An offering of secunitles of a foreign issuer that ds directed
into a single country other than the United States to the
residents thereof and that 15 made in accordance with the
local laws and customary practices and documentation of
such country; or
B. An offering of nan-convertible debt securities of a domestic
issuer that is directed into a single country other than the
United States to the residents tiereof and that is made in
accordance with the local laws and customary practices anal
documentation of such country, provided that the principal
aod interest of the securllles (or par value, as applicable)
are denominated in a currency other than U.S, dollars and
such secunties are nelther convertible into U,S. dollar-
denominated securities nor inked to U.S, doltars (other
than through related currency or interest rate swap
transactions that are commercial in nature) in y manner
that in effect corwerts the securities to U.S. dollar-
denominated securities.
lil. The securitios are backed by the fuil falth and credit of a foreign
government; or
dv. The securities are offered and sold to employees of the lasuer or (ts
aálliates pursuant to an employee benefit plan established and
administered in accordance wlth the law of a country other than the
United States, and customary practices and documentation of such
country, provided that:
A. The securities are issued ín compersatory circumsiances for
bona fide services rendered to the issuer or ls affillates in
connection with their businesses and such services are not
tendered in connection with the offer or sale of securities im
h capltal-raising transaction;
B. Any interests in the plan are not transferable other Uan by
will or the laws ol descent or distribution;
C, The lssuer tekes ressonable steps to preclude the offer and
sale of interests in the plan or securítles under the plan to
U,S, residents other than employees on temporary
aselgnment in the United States; and
D. Documentation used in connection with any offer pursuant
to the plan contalns a statement that the securltes have nat
been registered under the Act and may not be ofTerud or
sold in the United States unless registered or en exermption
fren registration is available,
2. Eategorí 2, The following conditions apply to securities that are not eligible
for Category 1 (paragraph (b)X(1)) of this section and that are equity
securities of a reporting forelgn issuer, or debt secunitles of a reporting
Issuer or of a non-reporting forelga ssuer.
L Offering restrictions are implemented;
il. The offer or sale, if made prior to the expiration of a dO-day
distribution compliance period, is not made bo a U.S. person or tor
the account or benefit of a U,5, person (other than a dstributar);
and
di. Each distributor selling securities ta a distribiutor, a dealer, as
defined in section 2(3)(12) of the Act, or a person receiving a selling
concession, fee or other remuneration In respect of the securities
sold, prior to the explration of a 30-day distribution compliance
period, sends a confirmation or other notice to tha purchaser stating
that the purchaser ls subject to the same restrictions on offers and
sales that apply to a distributor.
3. Category 3. The following conditions apply to securities that are not eligible
for Category 1 or 2 (paragraph (bX1) or (b)(2)) of Bus section:
i Offering restrictions are implemented;
lo In the case of debt securities:
A. The offer or sale, if made prior ta the expiration of a 40-day
distribution compliance pertod, is not made to a U.S, person
or for the socount or benefit of a U.S. person (other than a
distributori; and
B. The secunties are represented upon issuanoe by a
temporary global security which is not exchangeable for
definitive securities until tñie expiratien of the 40-day
distribution compllance pertod and, for persons other than
distributors, until certification of beneficial ownership of the
securities by a non-U,S. person or a US. person who
purchased sécurities in a transaction that did not sequire
registration under the Act;
li. In the case of equity securitics:
A. The offer or sale, if made prior to tha expiratian of a one-
year distribution compliance period, is not made to a U.S,
person or for the account or benefit of a US, person (other
than a distribubor); and
B. The offer or sale, lf made prior to Che expiration of a one-
year distabutian compliance periad, ls made pursuant Lo he
following conditions;
1. The purchaser of the secorities (other than a
distributor) certifias that it ls not a U.S. person and
ls not acquiting the securities for the account or
benefit of any U.S. person or 15 a U.S. person who
purchased securities in a transaction that did mol
reguire registration under the Act;
2. The purchaser of the securitles agyrees lo resell such
securities onty in sccordanoe with Me provisions of
this Regulation 5 (Rule 901 through Rule 905, and
Preliminary Notes), pursuant to registration under
the Áct, or pursuant to an avallable exemplion from
registration; and agrees not to engage in hedging
transactions vih regard to such securitles unless in
compliance velth the Act;
ie,
3. The secusitles 6 a domestic issuer contain a legend
to the effect that transfer ls prohibited except ln
áccordance with the provisions of this Regulation $
(Rule 901 through Rule 905, and Preliminary
Kotes), pursuant to registration under the Act, or
pursuant to an avallable exermption from
registratión; and that hedging transactions involving
those securities may not be conducted unless in
compliance with the Act;
4. The tssuer is required, either by contract or a
provision in its bylaws, articles, charter or
comparable document, to refuse to register any
transfer of the securities not made in accordance
enth the provisiones of this Regulation $ (Rule 901
through Rule 905, and Preliminary Notes), pursuant
to registration under the Act, ar pursuant to an
available exempcion from registration; provided,
however, that if the securities are in bearor form or
foreign law prevents the issuer of the securities
from refusing to register securitles transfers, other
reasonable procedures (such as a legend described
in paragraph (2M3)(10)(B)(3) of this section) are
implemented to prevent any transfer of the
securities not made in accordance with Uhe
provisions of this Regulslion S; and
Each distributor selling securitios to a distributor, a dealer (as
defined in section 2(aJ(12) of the Act), or a person recelving a
selling concession, fee or other remuneration, prior to the expiration
of a 340-day distribution compliance period in the case of debt
securities, or a one-year distribution compliance pertod in the case
of equity secunitles, sends a confirmation or other notice to the
purchaser stating that the purchaser ís subject to the sama
restrictions on offers and sales that apply to a distributor.
4. Guaranteed securitles, Notwithstanding paragraphs (b1(1) through (bx3) of
this section, in offerings of debt securittes fully and unconditienally
guaranteed as to principal and Interest by the parent of the issuer of the
debt securities, anly the requirements of paragraph (1) of this section that
are applicable to the offer and sale of the guarantee must be satisfied with
respect to the offer and sale of the guaranteed debt securities.
5. Warrants. An offer or sale of warrants under Category 2 or 3 (paragraph
(692) or (b(31) of this section also must comply with the following
requirements:
L
Each warrant must bear a legend stating that the warrant and the
securities to be ssued upon lts exercise have not been registered
under the Act and that the warrant may not be exercised by or an
behalf of any U.S. person unless registered under the Act or an
exemptian from such registration is avallable;
Each person exercising e warrant is required to give:
A. Written certification that Itas not a U,S, person and the
Warrants not belng exerciscd on behalf uf a U.S. person; or
id
B. Anwritten opinion of counsel to the effect that the vearrant
and the securities delivered upon exercise thereof have
been registered under the Act or are exempt from
registration thereunder; and
Procedures are implemented to ensure that the warrant may not be
exercised within the United States, and that the Securities may not
be delivered within the United Stabes 4pon exercise, ather than in
offerings deemed to meet the definition of “offshore transaction”
pursuant to Rule 902[h), unless registered under the Aci or an
exemplion from such registration is available.
Rule 904 — Offshore Resales
a. An offer or sale of securities by any person other than the issuer, a distribiutor, any
of their respective affiliates (except any officer or director wha is an afílllate solely
by virtue af holding such position], or any person acting on behall of any of the
foregoing, shall be deemed to occur outside the United States within the meaning of
Rale $01 df
1
2
3
Z
The offer or sale are made in an offshore transaction;
No directed selling efforts are made in the United States by the seller, an
afíiliate, or any person acting on thelr behalf; and
The conditions of paragraph (b) of this section, if applicable, are satisfied.
b. Additional conditions.
1,
2.
Resales by dealers and persons receiving selíing concessions. ln the case of
an offer or sale of secunties prior to the expiration of the distribution
compliance period specifled in Category 2 or 3 (paragraph (b)(2) or (b(3))
of Rule 903, as applicable, by a dealer, as defined in Section 2(a)(12) af the
fc, or a person recelving a selling concession, fee or other remuneration in
respect of the securittes offered or sold:
bh
Netther the seller nor any person acting an its behalf knows that the
offeree or buyer of the securities is a U.S. person; and
df the seller or any person acting on the seller’s behalf knows that
the purchaser is a dealer, as defined in Section 2(a)(12) of the Act,
or la a person recelving a selling concession, lec or other
temuneration in respect of the securities sold, the seller or a person
acting on the sellers behalf sends to the purchaser a confirmation
or other notice stating that the securities may be offered and sold
durlag the distribution compliance perñtod only in accordance with
the provislons of this Regulation $ (Hule 901 through Rule 2905, and
Prelleinary Notes); pursuant to registration of the secunities under
the Act; or pursuant bo an avallable exemplion from the registration
requirements of the Act.
Reseles by certain afíiltates. In the case of an offer or sale of securities by
an officer or director of the issuer or a distributor, who is an affiliate of the
issuer or distributor solely by virtue of holding such positian, no selling
concession, fee or other remuneration is paid Ín connection vith such offer
or sale other than the usual and custormary brokers commission that would
be received by a person executing such transaction as agent.
Rule 905 — Resale Limitations
Equity securities of domestic issuers acquired from the issuer, a distributor, or any of their
respective affiliates in a transaction subject to the conditions 6f Rule 901 or Rule 904 are
deemed to be “restricted securities” as defined in Rule 144. Resales of any of such restricted
securities by the offshore purchaser must be made in accordance with this Reguíation S (Rule
901 through Rule 905, and Preliminary Notes), Lhe registration requirements of the Act or an
exemption therefrom. Any “restricted secunities,” as defined in Rule 144, that are equity
securitles of a domestic issuer will continue to be deemed to be restricted securities,
notwithstanding that they wene acquired in a resale transaction made pursuant to Rule 901 or
Rile 204.
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