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Series 79 practice questioneasyRegulation S

Can a U.S. company use Regulation S to sell securities to overseas investors?

  1. ANo, Regulation S is only available to foreign issuers
  2. BOnly if the U.S. company has operations in the country where securities are sold
  3. COnly if the securities are denominated in a foreign currency
  4. DYes, both U.S. and foreign issuers can use Regulation S for offshore offerings✓ Correct answer
Explanation

Why D — Yes, both U.S. and foreign issuers can use Regulation S for offshore offerings

Regulation S is available to both U.S. and foreign issuers for offers and sales of securities made outside the United States. The safe harbor is based on the territorial approach to securities regulation, recognizing that the Securities Act's registration requirements are intended to protect U.S. investors and should not apply to offshore transactions. However, for U.S. issuers, the distribution compliance period and other safeguards are more stringent to prevent circumvention of U.S. registration requirements through offshore sales followed by rapid flowback.

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