What is Regulation S?

Regulation S is a safe harbor provision that exempts offshore securities from registration under section 5 of the Securities Act of 1933.

How does Regulation S Work?

Regulation S provides two safe harbors including:

• An issuer safe harbor
• A resale safe harbor

Under the regulation, both safe harbors apply to offers and sales of securities made outside of the shores of the United States. It also prohibits offering participants such as the issuer, affiliates and assisting banks from engaging in directed selling efforts. The regulation demands that where the US market shows a substantial interest in an issuers securities, U.S. persons (including Americans not physically present in the U.S.) cannot take part in the offers and sales.