Exempt Offerings  JOBS Act Solutions

advising on exempt offerings to find investors.  

Rule 506(c and Regulation S

The ideal exempt offering is offered globally with online general solicitation.

In the U.S., it is illegal to sell securities that are not registered or exempt. The most popular exemption, Rule 506(c, covers accredited investors who are U.S. persons and whose accreditation status can be verified.

Regulation S exempts offerings made to non-U.S. persons. If an issuer only uses Regulation S, sales can only be made to non-U.S. persons.

Launching two side-by-side offerings with one relying on Regulation S and the other on Rule 506(c, therefore, has compelling advantages to most issuers.

Note: If an issuer only uses Rule 506(c, it must verify every investor as accredited, even non-U.S. investors.

Take care to treat each offering as a separate offering.

Comply with all requirements for a 506(c offering, including third-party executed verification.

Comply with all requirements for a Regulation S offering, including qualification of its investors.

The dual offerings must clearly delineate between U.S. and foreign investors.

Practice tip: Before launching a dual offering, set up two separate websites.

Resale Restrictions

Both Rule 506(c and Regulation S have important resale restrictions; they are different and they are state-and fact-distinct.