Regulation S
A U.S. securities law exemption allowing securities to be sold to non-U.S. investors outside the United States without SEC registration.
Regulation S is a U.S. securities law exemption providing that securities offerings and sales conducted entirely outside the United States, to non-U.S. persons, generally fall outside the registration requirements that would otherwise apply under U.S. securities law. It's commonly used alongside Regulation D (see Kaavon's "Regulation D" glossary definition) by issuers conducting a token or securities sale that reaches both U.S. accredited investors and non-U.S. investors, with each group's participation structured under the exemption that applies to them.
Relying on Regulation S typically requires the issuer to take specific steps to ensure the offering is genuinely directed outside the United States, such as restricting marketing materials and sales processes from U.S. persons, and often imposes a distribution compliance period during which securities sold under the exemption can't be resold back into the United States. Like Regulation D, Regulation S is a U.S.-specific legal mechanism, and its applicability doesn't change or substitute for compliance with the securities laws of whichever other jurisdictions investors are actually located in.
Examples
- A token issuer selling to international investors outside the U.S. might rely on Regulation S for that portion of the sale, while using Regulation D for its U.S. accredited investors.
- Securities sold under Regulation S are typically subject to a distribution compliance period restricting their resale back into the United States during that time.