September 14, 1989
TO: SEC RULES MEMBERS NO. 49-89
UNIT INVESTMENT TRUST COMMITTEE NO. 61-89
INTERNATIONAL FUNDS TASK FORCE NO. 12-89
CLOSED-END FUND COMMITTEE NO. 38-89
RE: INSTITUTE FILES COMMENT LETTER ON REPROPOSED REGULATION S
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Attached is the Institute's comment letter filed with the
Securities and Exchange Commission on reproposed Regulation S,
which is intended to clarify the extraterritorial application of
the registration provisions of the Securities Act of 1933 (the
"1933 Act"). (See Memorandum to SEC Rules Committee No. 38-89,
International Funds Task Force No. 4-89, Closed-End Fund
Committee No. 26-89 and Unit Investment Trust Committee No. 34-
89, dated July 17, 1989.)
The Institute recommended in its letter that the Commission
codify the no-action position of the staff of the Division of
Corporation Finance that, under certain circumstances, private
placement offerings by foreign issuers in the U.S. will not be
integrated with public offerings concurrently being made abroad.
See College Retirement Equities Fund (June 4, 1987) and College
Retirement Equities Fund (March 20, 1987). If this position were
codified, foreign issuers should then have adequate assurance
that the registration requirements of the 1933 Act will not be
triggered and, thus, will no longer be reluctant to make such
offerings.
The Institute also requested the Commission to clarify its
position as to whether the presence abroad of an officer or
partner of a U.S. corporation or partnership would satisfy the
requirement under the definition of "offshore transaction" that
the buyer be outside the U.S. With respect to U.S. investment
companies, the Institute recommended that a fund's foreign
custodian or investment adviser located abroad be permitted to
act as an agent of the fund to satisfy the requirements under the
definition of an "offshore transaction."
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Finally, the Institute suggested that the definition of
"U.S. person" be modified to exclude any discretionary rather
than custodial account held by a fiduciary for a non-U.S. person.
We will keep you informed of developments.
Amy B. Rosenblum
Assistant General Counsel