An Overview of Regulation S – The Offshore Offering Exclusion
As I’ve repeated many times in blogs in the past, all offers, offers to sell, sales and offers to buy securities must be either registered or exempted from registration under Section 5 of the Securities Act of 1933. Regulation S provides an exclusion from the Section 5 requirements for transactions that occur outside the United States. Both private and public securities offerings made outside the United States by U.S. Issuers are excluded from the registration requirements of Section 5 as long as all the requirements of Regulation S are met. Regulation S may also be relied upon by foreign issuers; however, this blog will concentrate on offerings by U.S. Issuers and affiliates.
Offshore Transactions
An offshore transaction is one in which (i) the offer is not made to a person in the U.S.; and (ii) Either (a) at the time the buy order is originated the buyer is outside the U.S. or the seller reasonably believes the buyer is outside
An Overview of Exemptions for Hedge Fund Advisors: Exemptions for Advisors to Venture Capital Funds, Private Fund Advisors with Less Than $150 Million in Assets Under Management, and Foreign Private Advisors – Part IV
The JOBS Act is not the only recent congressional act to change the landscape of hedge funds; the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) made significant changes as well.
In particular, the Dodd-Frank Act eliminated the oft relied upon exemption from registration for private hedge fund advisors for those advisors with fewer than 15 clients. While eliminating the private advisor exemption, Dodd-Frank created three new exemptions, which are the operable hedge fund advisor exemptions today. These exemptions are for:
(1) Advisors solely to venture capital funds;
(2) Advisors solely to private funds with less than $150 million in assets under management in the U.S.; and
(3) Certain foreign advisers without a place of business in the U.S.
Moreover, the
State Crowdfunding Using Intrastate Offerings and Rule 147
The SEC has yet to publish proposed rules under Title III of the JOBS Act – the Crowdfunding Act. The Crowdfunding Act amends Section 4 by of the Securities Act of 1933 (the Securities Act) to create a new exemption to the registration requirements of Section 5 of the Securities Act. The new exemption allows Issuers to solicit “crowds” to sell up to $1 million in securities as long as no individual investment exceeds certain threshold amounts.
The threshold amount sold to any single investor cannot exceed (a) the greater of $2,000 or 5% of the annual income or net worth of such investor, if their annual income or net worth is less than $100,000; and (b) 10% of the annual
Will FINRA Rule Changes Related to Private Placement Further Deter Broker Dealers From Placing the Securities of Small Businesses?
On August 19, 2013, FINRA published Regulatory Notice 13-26 about the updated Private Placement Form that firms must file with FINRA when acting as a placement agent for the private placement of securities. A copy of the form is included with the regulatory notice at www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p325359.pdf. The Form went effective on July 1, 2013. FINRA has also updated the FAQs relating to the Private Placement Form. The updated Private Placement Form has six new questions:
- Is this a contingency offering?
- Does the issuer have
