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IPO Glossary of Terms: Part 6




Description

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

IPO Glossary of Terms: Part 6

Regulation S. Continued

(h) Offering Restrictions. "Offering restrictions" means:

(1) each distributor agrees in writing that all offers and sales of the securities prior to the expiration of the restricted period specified in 230.903(c)(2) or (3), as applicable, shall be made only: in accordance with the provisions of 230.903 or 230.904; pursuant to registration of the securities under the Act; or pursuant to an available exemption from the registration requirements of the Act; and

(2) all offering materials and documents (other than press releases) used in connection with offers and sales of the securities prior to the expiration of the restricted period specified in 230.903(c)(2) or (3), as applicable, shall include statements 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 U.S. persons (other than distributors) unless the securities are registered under the Act, or an exemption from the registration requirements of the Act is available. Such statements shall appear:

(i) on the cover or inside cover page of any prospectus or offering circular used in connection with the offer or sale of the securities;

(ii) in the underwriting section of any prospectus or offering circular used in connection with the offer or sale of the securities; and

(iii) in any advertisement made or issued by the issuer, any distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing. Such statements may appear in summary form on prospectus cover pages and in advertisements.

(i) Offshore Transaction.

(1) An offer or sale of securities is made in an "offshore transaction" if:

(i) the offer is not made to a person in the United States; and

(ii) either:

(A) at the time the buy order is originated, the buyer is outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer is outside the United States; or

(B) for purposes of:

(1 ) 230.903, the transaction is executed in, on or through a physical trading floor of an established foreign securities exchange that is located outside the United States; or

(2 ) 230.904, the transaction is executed in, on or through the facilities of a designated offshore securities market described in paragraph (a) of this section, and neither the seller nor any person acting on its behalf knows that the transaction has been pre-arranged with a buyer in the United States.

(2) Notwithstanding paragraph (i)(1) of this section, offers and sales of securities specifically targeted at identifiable groups of U.S. citizens abroad, such as members of the U.S. armed forces serving overseas, shall not be deemed to be made in "offshore transactions."

(3) Notwithstanding paragraph (i)(1) of this section, offers and sales of securities to 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 be deemed to be made in "offshore transactions."

(j) Overseas Directed Offering. "Overseas directed offering" means:

(1) an offering of securities of a foreign issuer that is directed into a single country other than the United States to the residents thereof and that is made in accordance with the local laws and customary practices and documentation of such country; or

(2) an offering of non-convertible debt securities, or securities described in 230.903(c)(4)(i) or (ii), of a domestic issuer that is directed into a single country other than the United States to the residents thereof and that is made in accordance with the local laws and customary practices and documentation of such country, provided that the principal and interest of the securities (or par value, as applicable) are denominated in a currency other than U.S. dollars and such securities are neither convertible into U.S. dollar-denominated securities nor linked to U.S. dollars (other than through related currency or interest rate swap transactions that are commercial in nature) in a manner that in effect converts the securities to U.S. dollar-denominated securities.

 

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