New investors may join our private network by qualifying under one of the three investor definitions under SEC Regulation D Rule 506… Accredited, Sophisticated, or Foreign.
A person that has a net worth of $1,000,000 or an annual income of $200,000.
|“Accredited Investor” shall mean any person who comes within any of the following categories, or who the Issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person:
A person that has knowledge or experience of private investments and can “describe” their qualifications. Each Reg. D Rule 506 offering has slots for 35 sophisticated non-accredited investors.
|Investors that meet the standards for participation in a non-public offering under Section 4(2) of the Securities Act of 1933, as amended, (“Act”), under Section 25102(f) of the California Corporate Securities Law of 1968, as amended, (“California Act”), and under the laws of other states.
These investors do not have to have the net worth or income of an Accredited Investor, but may invest in the same type offerings by qualifying under the “sophisticated investor” status.
A person that is not on United States territory. A non-US address must be indicated.
|A Qualified Investor residing outside the U.S.
Foreign Investors may invest in the same offerings available to Accredited Investors by qualifying under the S.E.C. Regulation S (Foreign Investor) see below.
All correspondence must originate outside the U.S.
The US SEC regulation regarding sales of US securities outside the United States.
The following is an overview of US Securities And Exchange Commission regulation S that addresses sales of securities of US companies in instances where those securities could find their way back into US markets without registration under the US Securities Act of 1933. The intent of Regulation S is to define the registration requirements of the Securities Act of 1933 with regard to offerings made outside the US to foreign residents. The regulation differentiates between securities which are determined to be sold outside the US, and not subject to the registration requirements of the Securities Act, and those which are subject to the Securities Act registration requirements. Regulation S does this by establishing a “territorial” approach, and the application of mutual courtesy to the laws of other countries as they apply. Because of differences in laws, the difficulty of obtaining solid legal advice in all countries has been a hindrance to international transactions.
Two Safe Harbors
Regulation S sets up two sets of “safe harbors”. One addresses offers and sales by issuers, their affiliates, and securities professionals involved in the initial offering of securities (the “issuer safe harbor”). The other addresses resales by securities professionals such as banks and brokers (the “resale safe harbor”).
The Issuer Safe Harbor
To qualify for the issuer safe harbor, the issuer’s offer or sales must be made in an “offshore transaction”. The offer must not be made to a person in the United States, although a prospective offeree may visit the United States to inspect physical facilities. There are two sets of criteria to be complied with.
Sales cannot be pre-arranged with a US buyer and no “directed selling efforts” can be made in the US in connection with either type of offer or sales. Directed selling efforts are activities that could reasonably be expected to result in directing sales or securities to US residents.
Resale Safe Harbor
For secondary trading under the resale safe harbor, Regulation S permits sales in an “offshore transaction” without any directed sales effort into the US market. Special provisions apply to sales by securities professionals and affiliates of the issuer.