Regulation S
Also called Reg S
Regulation S is the rule under United States securities law that treats offers and sales of securities made outside the United States as falling outside US registration requirements, provided the offering is genuinely offshore and no directed selling efforts are made into the United States.
A Regulation S offering is defined by where it is not sold as much as by where it is. The offering must take place in an offshore transaction, and the issuer and anyone selling on its behalf must avoid directed selling efforts aimed at the US market. That constrains marketing: a website, an advertisement or an email campaign that targets US persons can break the exemption.
Regulation S is sometimes contrasted with the domestic US private placement rules, but the two are opposites in orientation. The domestic rules cover placements made inside the United States and turn on US-specific investor qualification tests. Regulation S covers offerings made outside it, and US persons are excluded rather than qualified.
Being outside US registration does not mean being outside regulation. Each country where the offering is marketed applies its own rules on who may be approached and how, which is why offerings of this kind gate access by jurisdiction and investor category before showing materials.
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