Relationship Between New Rule 506(C), Regulation S And AIFMD

Beyond the general aspects of the U.S. Securities and Exchange Commission (SEC)'s new JOBS Act rules previously discussed in this series of articles, issuers who rely on new Rule 506(c) for an onshore offering and Regulation S and foreign private placement rules for a simultaneous offshore offering need to consider the impact of solicitation and advertising activities on the Regulation S exemption and on the private placement exemption under pertinent foreign rules.

Regulation S under the Securities Act of 1933 (the Securities Act) establishes an exemption from U.S. securities registration for certain offerings targeting non-U.S. investors. It provides an exemption from Securities Act registration requirements for offerings that (i) involve securities sold only in offshore transactions, and (ii) do not involve any directed selling efforts in the United States. Since inception of the Regulation S regime, the SEC has permitted a U.S. issuer to make a bifurcated