Can issuers conduct exempt offerings of securities concurrently with Regulation S?

Regulation S provides a non-exclusive exemption from registration of securities offered and sold outside the United States.  “Non-exclusive” means that offering to sell securities under Reg S does not prevent using another exemption from registration.

For example, an issuer can make a registered offering or a private placement in the United States, and at the same time offer securities abroad in an offshore transaction under Regulation S.  The SEC allows for a bifurcated offering so long as each part of the offering complies with its applicable rule.

Such a bifurcated approach can get complicated if the issuer’s private placement involves a general solicitation or general advertising under Reg D Rule 506(c) enacted under the JOBS Act.  General advertising could technically be considered a directed selling effort in the United States, which is prohibited for a Reg S offering.  It’s important therefore for the issuer to control its advertising under Rule 506(c) so that it doesn’t look like directed selling efforts for purposes of the Reg S offshore transaction.

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Last Modified: April 28, 2016