Table of Regulations
Last updated
Last updated
When using Reg S and Reg D 506(c) together, conflicts can arise due to their differing rules.
Reg D 506(c) is for U.S. accredited investors only.
Reg S is for both accredited and unaccredited foreign investors only.
Conflict: Marketing and offering strategies must be strictly separated to avoid violating Reg S rules. If the same materials or efforts target both U.S. and foreign investors, it could lead to compliance issues.
Reg S securities have restrictions on resale, particularly when sold to non-U.S. persons. They cannot be quickly resold into the U.S. market.
Conflict: If Reg S securities end up in the U.S. too soon, it may be seen as a way to bypass Reg D restrictions, violating U.S. securities laws.
Rule 144 sets the rules for reselling restricted, unregistered, and control securities, which are often bought through private sales or OTC markets. To sell these securities without registering them with the SEC, sellers must meet specific conditions. If you're not connected to the company and have held the securities for over a year, you can sell them freely. If held for over six months, you can sell them as long as the company has up-to-date public information.
For insiders, there are stricter rules, including limits on how much you can sell, ensuring current company info is available, following normal trading practices, and filing a notice for larger sales. Essentially, Rule 144 provides an exemption from registration if these conditions are met.
