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Regulation S (Reg S)

Category — Issue Parameters

Rule Reg S (Regulation S - Rules Governing Offers and Sales Made Outside the United States Without Registration Under the Securities Act of 1933) is a Securities and Exchange Commission regulation allowing public companies not to register securities sold outside the United States to foreign investors and not subject to section 5 of the Securities Act of 1933. Created in 1990, this Regulation was intended to encourage foreign investors to buy US financial assets in order to increase the liquidity of US markets.

The Reg S Rule contains two main provisions: restrictions on the issuer and on the sale. According to this rule, the offer and sale of these securities must take place outside the United States, and the offering parties (including the issuer and the organizing banks) must not make a targeted attempt to sell the paper. If the issuer’s securities are of significant interest in the US market, this rule also prohibits sending offers and selling these securities to US citizens (including citizens who are physically located outside the US).

Bonds or shares are usually assigned two separate sets of security identification codes ISIN and CUSIP, separately under Reg S и Reg 144a.

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