Sec. 218.771 Exemption from the definition of
‘‘broker’’ for banks effecting transactions in
securities issued pursuant to Regulation S.
(a) A bank is exempt from the
definition of the term ‘‘broker’’ under
section 3(a)(4) of the Act (15 U.S.C.
78c(a)(4)), to the extent that, as agent,
the bank:
(1) Effects a sale in compliance with
the requirements of 17 CFR 230.903 of
an eligible security to a purchaser who
is not in the United States;
(2) Effects, by or on behalf of a person
who is not a U.S. person under 17 CFR
230.902(k), a resale of an eligible
security after its initial sale with a
reasonable belief that the eligible
security was initially sold outside of the
United States within the meaning of and
in compliance with the requirements of
17 CFR 230.903 to a purchaser who is
not in the United States or a registered
broker or dealer, provided that if the
resale is made prior to the expiration of
any applicable distribution compliance
period specified in 17 CFR 230.903(b)(2)
or (b)(3), the resale is made in
compliance with the requirements of 17
CFR 230.904; or
(3) Effects, by or on behalf of a
registered broker or dealer, a resale of an
eligible security after its initial sale with
a reasonable belief that the eligible
security was initially sold outside of the
United States within the meaning of and
in compliance with the requirements of
17 CFR 230.903 to a purchaser who is
not in the United States, provided that
if the resale is made prior to the
expiration of any applicable distribution
compliance period specified in 17 CFR
230.903(b)(2) or (b)(3), the resale is
made in compliance with the
requirements of 17 CFR 230.904.
(b) Definitions. For purposes of this
section:
(1) Distributor has the same meaning
as in 17 CFR 230.902(d).
(2) Eligible security means a security
that:
(i) Is not being sold from the
inventory of the bank or an affiliate of
the bank; and
(ii) Is not being underwritten by the
bank or an affiliate of the bank on a
firm-commitment basis, unless the bank
acquired the security from an
unaffiliated distributor that did not
purchase the security from the bank or
an affiliate of the bank.
(3) Purchaser means a person who
purchases an eligible security and who
is not a U.S. person under 17 CFR
230.902(k).
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