Subscription Agreement Regulation S: What You Need to Know

If you`re in the business of raising capital for your company, you`ve likely heard of Regulation S. But what is it, and how does it impact your subscription agreements?

Regulation S is a set of SEC rules that govern the sale of securities to investors located outside of the United States. The goal of these rules is to ensure that these offerings are made in compliance with the securities laws of the jurisdiction in which the securities are being offered.

When it comes to subscription agreements, Regulation S can impact the language used in these documents. Specifically, it may require that certain disclosures be made to investors who reside outside of the US.

For example, if your company is offering securities to investors in the European Union, you may be required to disclose information about the regulatory environment in that region. This could include information about the regulatory agency responsible for overseeing securities offerings, as well as any specific requirements that apply to offerings in that jurisdiction.

Similarly, if you`re offering securities to investors in Asia, you may need to provide information about any restrictions on the transfer of securities in that region.

It`s important to note that Regulation S only applies to offerings made outside of the United States. If you`re offering securities to US-based investors, you`ll need to comply with a different set of SEC rules.

When drafting subscription agreements, it`s important to work with an experienced securities lawyer who can help you navigate the complex regulatory landscape. They can ensure that your documents comply with all applicable laws and regulations, and that you`re providing the necessary disclosures to investors.

In addition to complying with Regulation S, it`s also important to ensure that your subscription agreements are clear and unambiguous. This can help prevent disputes down the line and ensure that everyone involved in the offering is on the same page.

Overall, if you`re involved in the sale of securities to investors outside of the United States, it`s important to be aware of Regulation S and to work with a knowledgeable attorney to draft your subscription agreements. By doing so, you can ensure that your offering is conducted in compliance with all applicable laws and regulations, and that your investors are fully informed about the risks and benefits of investing in your company.