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IPO Glossary of Terms: Part 4




Description

This article is from the Investing Articles: Public Offerings: IPO and DPO series.

IPO Glossary of Terms: Part 4

Regulation S [General Statement]

Reg. 230.901. For the purposes only of section 5 of the Act (15 U.S.C. 77e), 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 that occur outside the United States.

[Adopted in Release No. 33-6863 (84,524), effective May 2, 1990, 55 F.R. 18306.]

[Definitions]

Reg. 230.902. As used in Regulation S, the following terms shall have the meanings indicated.

(a) Designated Offshore Securities Market. "Designated offshore securities market" means:

(1) the Eurobond market, as regulated by the Association of International Bond Dealers; the Amsterdam Stock Exchange; the Australian Stock Exchange Limited; the Bourse de Bruxelles; the Frankfurt Stock Exchange; The Stock Exchange of Hong Kong Limited; The International Stock Exchange of the United Kingdom and the Republic of Ireland, Ltd.; the Johannesburg Stock Exchange; the Bourse de Luxembourg; the Borsa Valori di Milan; the Montreal Stock Exchange; the Bourse de Paris; the Stockholm Stock Exchange; the Tokyo Stock Exchange; the Toronto Stock Exchange; the Vancouver Stock Exchange; and the Zurich Stock Exchange; and

(2) any foreign securities exchange or non-exchange market designated by the Commission. Attributes to be considered in determining whether to designate such a foreign securities market, among others, include:

(i) organization under foreign law;

(ii) association with a generally recognized community of brokers, dealers, banks or other professional intermediaries with an established operating history;

(iii) oversight by a governmental or self-regulatory body;

(iv) oversight standards set by an existing body of law;

(v) reporting of securities transactions on a regular basis to a governmental or self-regulatory body;

(vi) a system for exchange of price quotations through common communications media; and

(vii) an organized clearance and settlement system.

(b) Directed Selling Efforts.

(1) "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 offered in reliance on this Regulation S. Such activity includes placement of an advertisement in a publication with a general circulation in the United States that refers to the offering of securities being made in reliance upon this Regulation S.

(2) Notwithstanding paragraph (b)(1) of this section, placement of an advertisement required to be published under United States or foreign law, or under rules or regulations of a United States or foreign regulatory or self-regulatory authority, shall not be deemed "directed selling efforts," provided the advertisement contains no more information than legally required and includes a statement to 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, if the advertisement relates to an offering under 230.903(c)(2) or (3)) absent registration or an applicable exemption from the registration requirements.

(3) Notwithstanding paragraph (b)(1) of this section, contact with persons excluded from the definition of "U.S. person" pursuant to paragraph (o)(7) of this section or persons holding accounts excluded from the definition of "U.S. person" pursuant to paragraph (o)(2) of this section, solely in their capacities as holders of such accounts, shall not be deemed "directed selling efforts."

(4) Notwithstanding paragraph (b)(1) of this section, a tombstone advertisement in a publication with a general circulation in the United States shall not be deemed "directed selling efforts," provided:

(i) the publication has less than 20% of its circulation, calculated by aggregating the circulation of its U.S. and comparable non-U.S. editions, in the United States;

(ii) such advertisement contains a legend to 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, if the advertisement relates to an offering under 230.903(c) (2) or (3)) absent registration or an applicable exemption from the registration requirements; and

(iii) such advertisement contains no more information than:

(A) the issuer's name;

(B) the amount and title of the securities being sold;

(C) a brief indication of the issuer's general type of business;

(D) the price of the securities;

(E) the yield of the securities, if debt securities with a fixed (non-contingent) interest provision;

(F) the name and address of the person placing the advertisement, and whether such person is participating in the distribution;

(G) the names of the managing underwriters;

(H) the dates, if any, upon which the sales commenced and concluded;

(I) whether the securities are offered or were offered by rights issued to security holders and, if so, the class of securities that are entitled or were entitled to subscribe, the subscription ratio, the record date, the dates (if any) upon which the rights were issued and expired, and the subscription price; and

(J) any legend required by law or any foreign or U.S. regulatory or self-regulatory authority.

 

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