With effect from 9th July 2013 the Malta Stock Exchange (“MSE”) was confirmed as a “designated offshore securities market” by the Securities and Exchange Commission of the United States (“SEC”) in terms of Rule 902(b) of Regulation S of the United States’ Securities Act 1933 (the “Act”).
Regulation S provides for a safe harbour rule for the purposes of offerings of securities deemed to be executed in a country outside of the US, which would otherwise be subject to the registration requirement prescribed by the Act. Rule 904 provides that in order to fall outside the registration requirement, two general conditions must be satisfied, namely that:
- the offer or sale of securities occurs in an “offshore transaction”; and
- no “directed selling efforts” are made in the US by the seller, an affiliate, or any person acting on their behalf.
An “offshore transaction” is deemed to take place, inter alia, when the transaction occurs on certain “designated offshore securities markets” and the transaction is not pre-arranged with a buyer in the US. The attainment of the status of a designated offshore securities market now provides for the possibility of equity securities and bonds issued in Malta and listed on the MSE being resold to US persons without restrictions under the Act, where such resale is executed through the trading platform of the MSE and is not pre-arranged.