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What’s the Difference Between Regulation S and Regulation D?

Apr 19, 2023 | Securities

Under the Securities Act of 1933, securities cannot be sold in a company unless they are registered or meet an exemption from registration. Regulation S and Regulation D provide two exemptions from registering private securities with the Securities and Exchange Commission (the “SEC”). One crucial difference must be noted — Regulation S applies only to offerings aimed exclusively at international investors. Other than the Regulation S special target, the two regulations can be used interchangeably to let companies access the global capital markets.

What is Regulation D?

Regulation D provides an exemption from the costly and time-consuming process of registering offerings with the SEC. The ’33 Act applies regulations and requirements. A document called “Form D” must be filed electronically with the SEC following the sale of the first securities. The issuer of the security must reveal the names and addresses of the company’s executives and directors — and provide written disclosure of any history of bad actors in the company.     

In order to use Regulation D, the offering must be private and not offered to the general public. While the targeted investors can live anywhere, under Rule 506(b) there can be no public advertising or solicitation regarding the offering in the United States or any foreign country. Rule 506(b) is in contrast with Rule 506(c) of Regulation D which allows advertising without limitations. Only accredited investors may buy 506(c) offerings.  

What is Regulation S?

Regulation S is a registration exemption for offers and sales of securities that occur outside the United States. Regulation S allows businesses to raise funds from international investors. Unlike Regulation D, Regulation S only applies to offshore offerings and is aimed at international investors. An offering qualifies as an “offshore transaction” if the offer is not made to a U.S. person and the buyer is located outside the country. Investors from within the United States are excluded from participation. 

Can Regulation D and Regulation S Be Used Together? 

Often, Regulation D and Regulation S are used together — certain offerings can be structured to claim both exemptions for investors who are physically located outside the country. If either exemption is lost, an issuer can rely on a fallback exemption. When structuring offerings, an issuer must avoid the potential pitfalls that may arise. For example, while Rule 506(c) of Regulation D permits advertising, there can be no public advertising in the United States under Regulation S. 

If the exemptions are not used correctly in terms of the advertising rules, the Regulation S exemption could be lost. Although this would still leave the Rule 506 (c) exemption available under Regulation D, the requirements must be strictly adhered to — otherwise, both exemptions would not be applicable. This would mean the securities offering is both not exempt and unregistered, leaving it open to an SEC enforcement action. 

Contact an Experienced New York Securities Attorney

It’s critical for companies who will be raising capital to understand the nuances of Regulation D and Regulation S. A knowledgeable securities attorney can advise you regarding each regulation and help ensure you remain compliant with the SEC requirements. Brinen & Associates is dedicated to providing strategic advice to clients for a wide variety of securities matters. Call (212) 330-8151 or send us a message to learn more about how we can help.     


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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