Securities offerings and listings in the US: an ... - Latham & Watkins

Chapter 3 – Key exemptions from Securities Act registrationaccordance with safe harbours underRegulation S, pursuant to registration under theSecurities Act or an exemption fromregistration; and- prospectuses, advertisements, and all otheroffering materials and documents (other thanpress releases) used in connection with offersand sales during the distribution complianceperiod must disclose that the securities are notregistered under the Securities Act and cannotbe sold in the United States or to US persons(other than distributors) unless so registered oran exemption from registration is available. 84• During the 40-day distribution compliance period,offers and sales of the security cannot be made to aUS person other than a distributor 85 (althoughexempt sales, such as to QIBs pursuant to Rule 144A,may be made). 86• Any distributor selling securities to anotherdistributor, dealer, or person receiving a sellingcommission must deliver, during the 40-day distributioncompliance period, a confirmation or noticeto the purchaser stating that the purchaser is subjectto the same resale restrictions as the distributor. 87The 40-day distribution compliance period begins onthe later of the date of the closing or the date on whichsecurities were first offered to persons other thandistributors (generally, the pricing date). 88(c) Category 3The third category is a catch-all and has the mostrestrictive conditions. It includes all securities that arenot eligible for Category 1 or 2, such as any securities ofa non-reporting domestic US issuer, equity securities ofa reporting domestic US issuer and equity securities of anon-reporting foreign issuer (with substantial USmarket interest in the equity securities of that issuer). 89In addition to the Regulation S General Conditions, anissuer must also meet the following conditions:• Each of the offering restrictions described above forCategory 2 must be met, 90 except that a one-yeardistribution compliance period applies to offerings ofequity securities 91 and a 40-day distributioncompliance period applies to offerings of debtsecurities. 92• During the applicable distribution complianceperiod, offers or sales cannot be made to a US personother than a distributor 93 (although exempt sales, suchas to QIBs pursuant to Rule 144A, may be made)and, in the case of equity securities:- the purchaser (other than a distributor) mustcertify that it is not a US person;- the purchaser must agree to resell the securitiesonly in accordance with Regulation S, pursuantto registration under the Securities Act or anexemption from registration; and- certain other restrictions must be satisfied,including a prohibition against corporateregistration of transfers not made in accordancewith Regulation S. 94• Debt securities generally must be represented uponissuance by a temporary global security notexchangeable for definitive securities until theexpiration of the 40-day distribution complianceperiod and, for persons other than distributors, untilcertification of beneficial ownership by a non-USperson. 95• Any distributor selling the securities to anotherdistributor, dealer, or person receiving a sellingcommission must deliver, during the applicabledistribution compliance period, a notice or confirmationto the purchaser stating that the purchaser issubject to the same resale restrictions as thedistributor. 96www.iflr.comUS SECURITIES OFFERINGS: A GUIDE FOR NON-US ISSUERS17