Regulation S (Reg S)

Regulation S (Reg S) is the set of SEC rules (17 CFR 230.901 to 230.905) under which the Section 5 registration requirement of the Securities Act of 1933 does not reach offers and sales that occur outside the U.S. That is the general statement (230.901); Rules 903 and 904 add two safe harbors that say when a transaction is deemed to occur outside the U.S.: one for the issuer, distributors and their affiliates, and one for resales. It applies in the same way to a security issued as a token: under the Commission’s interpretation published in the Federal Register on March 23, 2026 (Release No. 33-11412, section III.E), a security is a security whether it is issued or represented offchain or onchain.

The two general conditions. Both safe harbors require an offshore transaction and no directed selling efforts in the U.S. (230.903(a) and 230.904(a)). A transaction is offshore if the offer is not made to a person in the U.S. and, in addition, the buyer is outside the U.S. when the buy order is originated (or the seller reasonably believes so), or the trade is executed on the physical trading floor of an established foreign securities exchange, for issuer sales, or through a designated offshore securities market without knowing it was pre-arranged with a buyer in the U.S., for resales (230.902(h)(1)). Offers targeted at identifiable groups of U.S. citizens abroad, such as members of the armed forces serving overseas, do not count (230.902(h)(2)). Directed selling efforts are any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the U.S. market for the securities offered, such as an advertisement of the offering in a publication with a general circulation in the U.S. (230.902(c)(1)). The rule excludes, among others, advertisements required by law that state the securities are not registered, and certain advertisements with minimal information (230.902(c)(3)).

Categories 1, 2 and 3. Each category adds its own conditions (230.903(b)). The distribution compliance period begins on the first offer to persons other than distributors or on the closing of the offering, whichever is later (230.902(f)).

For an individual, being a U.S. person depends on residence in the U.S., not on citizenship (230.902(k)(1)(i)); for a company, on being organized or incorporated under U.S. law, among other cases (230.902(k)).

Resales (Rule 904) and restricted securities. A holder that is not the issuer, a distributor or an affiliate may resell outside the U.S. if the transaction is offshore and there are no directed selling efforts; during the distribution compliance period, a dealer reselling must not know that the buyer is a U.S. person (230.904(b)(1)). Equity securities of U.S. issuers bought under Regulation S are restricted securities and remain so even after an offshore resale (230.905). And any security acquired overseas may be resold in the U.S. only if registered or under an exemption (Preliminary Note 6).

What Regulation S does not cover. It relates only to Section 5 registration: it does not exempt from the antifraud rules, from broker-dealer registration where it applies or from state law (Preliminary Notes 1, 3 and 4). It does not protect transactions that, while technically compliant, are part of a plan to evade registration (Preliminary Note 2), nor certain funds subject to the Investment Company Act of 1940 (Preliminary Note 8). Rules 901 to 905 provide for no SEC notice filing equivalent to Regulation D’s Form D.

Regulation S and Regulation D in an EU-U.S. offering. In an offering with investors on both sides, the offshore tranche can rely on Regulation S and the U.S. tranche on an exemption such as Rule 506 of Regulation D. Offers and sales that comply with Regulation S are not integrated with other offerings (230.152(b)(2)). Regulation S can be relied on even if coincident offers and sales are made under Regulation D inside the U.S.: Regulation S purchasers are not counted as Regulation D purchasers, and their proceeds are not included in the aggregate offering price, unless the issuer elects to rely solely on Regulation D for sales outside the U.S. as well (230.500(g)). In the release that allowed general solicitation in Rule 506 offerings (Release No. 33-9415, July 10, 2013, section IV), the SEC reaffirmed that an offshore offering conducted in compliance with Regulation S is not integrated with a concurrent Rule 506 offering in the U.S. Even so, the 506(c) tranche, which allows general solicitation as long as it sells only to accredited investors, and the offshore tranche, which cannot direct selling efforts at the U.S., are designed together with securities counsel. The full walkthrough is in our guide to cross-border security token offerings between the EU and the U.S.; the broader context, in asset tokenization in the U.S.

Regulation S for tokenized securities. The conditions of the distribution compliance period (no transfers to U.S. persons, certifications, refusal to register non-compliant transfers) can be built into the token’s transfer rules. A permissioned standard such as ERC-3643 links each wallet to an identity and a country-of-residence code and lets the issuer set the accepted countries. That code does not replace the legal analysis: which category applies and when the restriction is lifted are for the issuer’s U.S. securities counsel to decide.

Official sources: 17 CFR 230.902; 17 CFR 230.903; 17 CFR 230.904; 17 CFR 230.905; 17 CFR 230.152; 17 CFR 230.500; Release No. 33-9415 (SEC); Release No. 33-11412 (Federal Register).

Framework verified as of October 15, 2026. At Unknown Gravity we build the platform, smart contracts and integrations, working alongside the client’s U.S. securities counsel and registered intermediaries. We are not a broker-dealer, transfer agent, investment adviser or law firm. Talk to us.