[Federal Register Volume 63, Number 59 (Friday, March 27, 1998)]
[Rules and Regulations]
[Pages 14806-14814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8001]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 231, 241, 271, 276
[Release Nos. 33-7516, 34-39779, IA-1710, IC-23071; International
Series Release No. 1125]
Statement of the Commission Regarding Use of Internet Web Sites
to Offer Securities, Solicit Securities Transactions or Advertise
Investment Services Offshore
AGENCY: Securities and Exchange Commission.
ACTION: Interpretation.
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SUMMARY: The Securities and Exchange Commission is publishing its views
on the application of the registration obligations under the U.S.
federal securities laws to the use of Internet Web sites to disseminate
offering and solicitation materials for offshore sales of securities
and investment services.
EFFECTIVE DATE: March 23, 1998.
FOR FURTHER INFORMATION CONTACT: Paul Dudek, Chief, and Rani Doyle,
Attorney, Office of International Corporate Finance at 202-942-2990
(with respect to Securities Act issues); Paula Jenson, Deputy Chief
Counsel, Division of Market Regulation, at 202-942-0073 (with respect
to broker-dealer registration issues), Elizabeth King, Senior Special
Counsel, Division of Market Regulation, at 202-942-0140 (with respect
to exchange registration issues); and Karrie McMillan, Assistant Chief
Counsel, Sarah A. Wagman, Special Counsel, and Brendan C. Fox,
Attorney, Division of Investment Management, at 202-942-0660 (with
respect to matters relating to investment companies and investment
advisers).
SUPPLEMENTARY INFORMATION:
I. Executive Summary
The Internet permits market participants to disseminate
advertisements and other information regarding securities and
investment services across national borders. Because persons in the
United States have access to this securities-related information,
market participants have expressed uncertainty about the application of
the registration requirements of the U.S. securities laws to their
offshore Internet offers (i.e., offers over Internet Web sites of
securities or investment services that by their terms are not made to
U.S. persons). Today, we are providing our views on how issuers,
investment companies, broker-dealers, exchanges and investment advisers
may use Internet Web sites to solicit offshore securities transactions
and clients without the securities or investment company being
registered with the Commission under the Securities Act of 1933\1\ or
the Investment Company Act of 1940,\2\ or without the investment
service provider registering under the Investment Advisers Act of
1940,\3\ or the broker-dealer or exchange registering under the broker-
dealer and exchange registration provisions under the Securities
Exchange Act of 1934.\4\
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\1\ 15 U.S.C. 77a, et seq. (the ``Securities Act'').
\2\ 15 U.S.C. 80a-1, et seq. (the ``Investment Company Act'').
\3\ 15 U.S.C. 80b-1, et seq. (the ``Advisers Act'').
\4\ 15 U.S.C. 78a, et seq. (the ``Exchange Act'').
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The purpose of this interpretation is to clarify when the posting
of offering or solicitation materials on Internet Web sites would not
be considered activity taking place ``in the United States.'' We are
only providing clarification on this aspect of the registration
requirements and are not altering the fundamental requirement that all
offers and sales in
[[Page 14807]]
the United States be registered under the U.S. securities laws or made
under an applicable exemption.
Under this interpretation, application of the registration
provisions of the U.S. securities laws depends on whether Internet
offers, solicitations or other communications are targeted to the
United States. We would not view issuers, broker-dealers, exchanges,
and investment advisers that implement measures that are reasonably
designed to guard against sales or the provision of services to U.S.
persons to have targeted persons in the United States with their
Internet offers. Under these circumstances, Internet postings would
not, by themselves, result in a registration obligation under the U.S.
securities laws.
The determination of whether measures reasonably designed to guard
against sales to U.S. persons have been implemented depends on the
facts and circumstances, and can be satisfied through different means.
We discuss in this release examples of measures that are adequate to
serve this purpose for both U.S. and foreign entities. We also discuss
why measures that are adequate for foreign issuers would not
necessarily be adequate measures for U.S. issuers. U.S. issuers should
undertake more restrictive measures when using the Internet to solicit
offshore securities transactions.
This interpretation does not address the anti-fraud and anti-
manipulation provisions of the securities laws, which will continue to
reach all Internet activities that satisfy the relevant jurisdictional
tests.\5\ Even in the absence of sales in the United States, we will
take appropriate enforcement action whenever we believe that fraudulent
or manipulative Internet activities have originated in the United
States or placed U.S. investors at risk. Further, we are not addressing
the circumstances under which a U.S. court could exercise personal
jurisdiction over a non-U.S. person with respect to that person's
offshore Internet offer.
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\5\ The courts have recognized U.S. jurisdiction over fraudulent
conduct where substantial conduct or effects occur in the United
States. See generally Itoba Ltd. v. LEP Group PLC, 54 F.3d 118 (2d
Cir. 1995), cert. denied, 516 U.S. 1044 (1996) and Robinson v. TCI/
US West Communications Inc., 117 F.3d 900 (5th Cir. 1997) (citing
Schoenbaum v. Firstbrook, 405 F.2d 200 (2d Cir.), rev'd on other
grounds on rehrg. en banc, 405 F.2d 215 (2d Cir. 1968), cert.
denied, 395 U.S. 906 (1969) (effects test)); Bersch v. Drexel
Firestone Inc., 519 F.2d 974 (2d Cir.), cert. denied, 423 U.S. 1018
(1975) (conduct test); Leasco Data Processing Equipment Corp. v.
Maxwell, 468 F.2d 1326 (2d Cir. 1972) (conduct test).
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The interaction between the U.S. securities laws and the Internet
can be expected to continue to evolve. As technology and practice
develop, we may revisit these and related issues.
II. Background
A. The Global Reach of the Internet
The development of the Internet presents numerous opportunities and
benefits for consumers and investors throughout the world. It also
presents significant challenges for regulators charged with protecting
consumers and investors. Regulators in many countries are attempting to
administer their respective laws to preserve important protections
provided by their regulatory schemes without stifling the Internet's
vast communications potential.\6\ We share this goal in our
administration of the U.S. securities laws.\7\
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\6\ See President William J. Clinton and Vice President Albert
Gore, Jr., A Framework for Global Electronic Commerce (1997),
<http://www.iitf.nist.gov/eleccomm/ecomm.htm>; European Ministerial
Conference, ``Global Information Networks: Realizing the
Potential,'' July 6-8, 1997, Ministerial Declaration, Global
Informational Networks, <http://www2.echo.lu/bonn/final.html>.
\7\ For a discussion of recent Commission actions addressing the
Internet, see The Impact of Recent Technological Advances on the
Securities Markets, Report prepared by the Staff of the U.S.
Securities and Exchange Commission pursuant to Section 510(a) of the
National Securities Markets Improvements Act of 1996 (Oct. 1997)
<http://www.sec.gov/news/studies/techrp97. htm>.
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Information posted on Internet Web sites concerning securities and
investments can be made readily available without regard to geographic
and political boundaries.\8\ Additionally, the interactive nature of
the Internet makes it possible for investors to purchase electronically
the securities or services offered. For these and other reasons, we
believe that the use of the Internet by market participants and
investors presents significant issues under the U.S. securities laws.
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\8\ Wilske and Schiller, International Jurisdiction in
Cyberspace: Which States May Regulate the Internet?, <http://
www.law.indiana.edu/fcj/pubs/v50/no1/wilske.html>, Section
II.A.2.(c).
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Although this release focuses on Internet Web sites, the Internet
offers a variety of forms of communication. We distinguish between Web
site postings and more targeted Internet communication methods. More
targeted communication methods are comparable to traditional mail
because the sender directs the information to a particular person,
group or entity. These methods include e-mail and technology that
allows mass e-mailing or ``spamming.'' Information posted on a Web
site, however, is not sent to any particular person, although it is
available for anyone to search for and retrieve.\9\ Offerors using
those more targeted technologies must assume the responsibility of
identifying when their offering materials are being sent to persons in
the United States and must comply fully with the U.S. securities laws.
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\9\ The Web site sponsor can aid Internet searches by adding
``tags'' to its Web site that facilitate a search engine identifying
the site as containing information relating to targeted topics.
Generally, we will not view the use of tags relating to securities
or investments as transforming the Web site into a targeted
communication that would require additional measures to assure
against sales to U.S. persons, such as blocking access by U.S.
persons to the offering materials.
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B. Regulation of Offers
Many registration requirements under the U.S. securities laws are
triggered when an offer of securities or financial services, such as
brokerage or investment advisory services, is made to the general
public.
Under the Securities Act, absent an exemption, an issuer
that offers or sells securities in the United States through use of the
mails or other means of interstate commerce must register the offering
with the Commission.\10\ An offering of securities may be exempt from
registration if it is conducted as a ``private placement,'' without any
general solicitation of investors.\11\
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\10\ Section 5 of the Securities Act, 15 U.S.C. 77e.
\11\ See, e.g., Section 4(2) of the Securities Act, 15 U.S.C.
77d(2); Regulation D [17 CFR 230.501-508].
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Under the Investment Company Act, a foreign investment
company may not use the mails or other means of interstate commerce to
publicly offer its securities in the United States or to U.S. persons
unless the investment company receives an order from the Commission
permitting it to register under the Investment Company Act.\12\ A
foreign investment company may, however, make a private offer of its
securities in the United States or to U.S. persons in reliance on one
of the exclusions from the definition of ``investment company'' under
the Investment Company Act.\13\
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\12\ Section 7(d) of the Investment Company Act, 15 U.S.C. 80a-
7(d).
\13\ See Section 3(c)(1) and Section 3(c)(7) of the Investment
Company Act, 15 U.S.C. 80a-3(c)(1), 15 U.S.C. 80a-3(c)(7). See also
Staff no-action letter, Goodwin, Procter & Hoar (available Feb. 28,
1997) (``Goodwin Procter'').
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Under the Advisers Act, an adviser is prohibited from
using the mails or other means of interstate commerce in connection
with its business as an investment adviser, unless the adviser is
registered with the Commission, or is exempted or excluded from the
requirement to register.\14\
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\14\ Section 203(a) of the Advisers Act, 15 U.S.C. 80b-3(a).
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Under the Exchange Act, a broker or dealer generally must
register with the Commission if it uses the mails or any means of
interstate commerce to effect
[[Page 14808]]
transactions in, or to induce or attempt to induce the purchase or sale
of, any security.\15\
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\15\ Section 15(a) of the Exchange Act, 15 U.S.C. 78o(a).
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Under the Exchange Act, an exchange generally must
register with the Commission if it uses the mails or any means of
interstate commerce for the purpose of using its facilities to effect
any transaction in a security or to report any such transaction.\16\
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\16\ Section 6 of the Exchange Act, 15 U.S.C. 78f.
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The posting of information on a Web site may constitute an offer of
securities or investment services for purposes of the U.S. securities
laws.\17\ Our discussion of these issues will proceed on the assumption
that the Web site contains information that constitutes an ``offer'' of
securities or investment services under the U.S. securities laws.\18\
Because anyone who has access to the Internet can obtain access to a
Web site unless the Web site sponsor adopts special procedures to
restrict access, the pertinent legal issue is whether those Web site
postings are offers in the United States that must be registered.
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\17\ See, e.g., Securities Act Release No. 7233, Question 20
(Oct. 6, 1995) [60 FR 53458] (``The placing of the offering
materials on the Internet would not be consistent with the
prohibition against general solicitation or advertising in Rule
502(c) of Regulation D.'').
\18\ We also assume that the Internet is an instrument of
interstate commerce and that its use satisfies the ``jurisdictional
means'' requirements of the federal securities laws. See American
Library Ass'n v. Pataki, 969 F. Supp. 160, 161 (S.D.N.Y. 1997).
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III. Offshore Offers and Solicitations on the Internet
A. General Approach
Some may argue that regulators could best protect investors by
requiring registration or licensing for any Internet offer of
securities or investment services that their residents could access. As
a practical matter, however, the adoption of such an approach by
securities regulators could preclude some of the most promising
Internet applications by investors, issuers, and financial service
providers.
The regulation of offers is a fundamental element of federal and
some U.S. state securities regulatory schemes. Absent the transaction
of business in the United States or with U.S. persons, however, our
interest in regulating solicitation activity is less compelling.\19\ We
believe that our investor protection concerns are best addressed
through the implementation by issuers and financial service providers
of precautionary measures that are reasonably designed to ensure that
offshore Internet offers are not targeted to persons in the United
States or to U.S. persons.\20\
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\19\ Under a resolution adopted by the North American Securities
Administrators Association (``NASAA''), states are encouraged to
take appropriate steps to exempt Internet offers from the
registration provisions of their securities laws when the offers
indicate that the securities are not being offered to residents of
their state and the offers are not otherwise specifically made to
any persons in their state. Sales of the securities that were the
subject of the Internet offer could be made in that state after the
offering has been registered and the final prospectus has been
delivered to investors, or where the sales are exempt from
registration. NASAA, Resolution Regarding Securities Offered on the
Internet (adopted Jan. 7, 1996), 1996 CCH Par. 7040 (Jan. 1996).
According to NASAA, 32 states have implemented the resolution
and 15 states have indicated an intent to do so.
Several foreign authorities have provided guidance on Internet
and securities related issues. See, e.g., Policy Statement 107 on
Electronic Prospectuses (Sept. 1996) <http://www.asc.gov.au>
(Australia); Notice and Interpretation Note, Trading Securities and
Providing Advice Respecting Securities on the Internet (Mar. 3,
1997), NIN #97/9 (British Columbia, Canada).
\20\ We use the term ``U.S. person'' as it is defined in Rule
902(k) of Regulation S under the Securities Act [17 CFR 230.902(k)],
which is premised on residence in the United States, regardless of
any temporary presence outside the United State. See Securities Act
Release No. 7505 (Feb. 18, 1998) [63 FR 9632 (Feb. 25, 1998)]
(renumbering CFR sections). ``U.S. person'' generally has the same
meaning for purposes of Section 7(d) of the Investment Company Act
as under Rule 902(k) of Regulation S under the Securities Act. See
Goodwin Procter, supra note 13. For purposes of this release, we
deem Internet offers ``targeted at the United States'' to include
Internet offers targeted to U.S. persons. Cf. Rule 902(h)(2) of
Regulation S [17 CFR 230.902(h)(2)] (offers targeting identifiable
groups of U.S. persons offshore are not offshore transactions).
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B. Procedures Reasonably Designed to Avoid Targeting the United States
When offerors implement adequate measures to prevent U.S. persons
from participating in an offshore Internet offer, we would not view the
offer as targeted at the United States and thus would not treat it as
occurring in the United States for registration purposes. What
constitutes adequate measures will depend on all the facts and
circumstances of any particular situation. We generally would not
consider an offshore Internet offer made by a non-U.S. offeror as
targeted at the United States, however, if:
The Web site includes a prominent disclaimer making it
clear that the offer is directed only to countries other than the
United States. For example, the Web site could state that the
securities or services are not being offered in the United States or
to U.S. persons, or it could specify those jurisdictions (other than
the United States) in which the offer is being made;\21\ and
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\21\ The disclaimer would have to be meaningful. For example,
the disclaimer could state, ``This offering is intended only to be
available to residents of countries within the European Union.''
Because of the global reach of the Internet, a disclaimer that
simply states, ``The offer is not being made in any jurisdiction in
which the offer would or could be illegal,'' however, would not be
meaningful. In addition, if the disclaimer is not on the same screen
as the offering material, or is not on a screen that must be viewed
before a person can view the offering materials, it would not be
meaningful.
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The Web site offeror implements procedures that are
reasonably designed to guard against sales to U.S. persons in the
offshore offering. For example, the offeror could ascertain the
purchaser's residence by obtaining such information as mailing
addresses or telephone numbers (or area code) prior to the sale.
This measure will allow the offeror to avoid sending or delivering
securities, offering materials, services or products to a person at
a U.S. address or telephone number.
These procedures are not exclusive; other procedures that suffice
to guard against sales to U.S. persons also can be used to demonstrate
that the offer is not targeted at the United States. Regardless of the
precautions adopted, however, we would view solicitations that appear
by their content to be targeted at U.S. persons as made in the United
States. Examples of this type of solicitation include purportedly
offshore offers that emphasize the investor's ability to avoid U.S.
income taxes on the investments.\22\ We are concerned that the advice
that we provide to assist those who attempt to comply with both the
letter and spirit of the securities laws will be used by others as a
pretext to violate those laws. Sham offshore offerings or procedures,
or other schemes will not allow issuers or promoters to escape their
registration obligations under the U.S. securities laws.
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\22\ In our view, while a relevant factor, the fact that an
Internet offeror posts offering materials in English even though it
is based in a non-English speaking country will not, by itself,
demonstrate that the offer is targeted at the United States.
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C. Effect of Attempts by U.S. Persons to Evade Restrictions
We recognize that U.S. persons may respond falsely to residence
questions, disguise their country of residence by using non-resident
addresses, or use other devices, such as offshore nominees, in order to
participate in offshore offerings of securities or investment services.
Thus, even if the foreign market participant has taken measures
reasonably designed to guard against sales to U.S. persons, a U.S.
person nevertheless could circumvent those measures.
In our view, if a U.S. person purchases securities or investment
services notwithstanding adequate procedures reasonably designed to
prevent the purchase, we would not view the Internet offer after the
fact as having been targeted at the United
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States, absent indications that would put the issuer on notice that the
purchaser was a U.S. person. This information might include (but is not
limited to): receipt of payment drawn on a U.S. bank; provision of a
U.S. taxpayer identification or social security number; or, statements
by the purchaser indicating that, notwithstanding a foreign address, he
or she is a U.S. resident. Confronted with such information, we would
expect offerors to take steps to verify that the purchaser is not a
U.S. person before selling to that person.\23\ Additionally, if despite
its use of measures that appear to be reasonably designed to prevent
sales to U.S. persons, the offeror discovers that it has sold to U.S.
persons, it may need to evaluate whether other measures may be
necessary to provide reasonable assurance against future sales to U.S.
persons.
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\23\ These additional steps could include a request for further
evidence (e.g., a copy of a passport or driver's license).
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D. Third-Party Web Services
An issuer, underwriter or other type of offshore Internet offeror
may seek to have its offering materials posted on a third-party's Web
site. In that event, if the offeror uses a third-party Web service that
employs at least the same level of precautions against sales to U.S.
persons as would be adequate for the offshore Internet offeror to
employ, we would not view the third-party's Web site as an offer that
is targeted to the United States.\24\
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\24\ Governmental authorities or securities exchanges could post
issuer information that is required by law to be filed with them,
including prospectuses, on their Web sites without restriction.
Securities exchanges, however, should consider the U.S. registration
implications of their Web sites as a whole. See infra Section VII.B
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When an offeror, or those acting on its behalf, uses a third-
party's Web site to generate interest in the Internet offer, more
stringent precautions by the offeror than those outlined in Section
III.B. may be warranted. These precautions may include limiting access
to its Internet offering materials to persons who can demonstrate that
they are not U.S. persons. For example, additional precautions may be
called for when the Internet offeror:
Posts offering or solicitation material or otherwise
causes the offer to be listed on an investment-oriented Web site that
has a significant number of U.S. clients or subscribers, or where U.S.
investors could be expected to search for information about investment
opportunities or services; or
Arranges for direct or indirect hyperlinks from a third-
party investment-oriented page to its own Web page containing the
offering material.
IV. Additional Issues Under the Securities Act
Our Securities Act analysis assumes that the information posted on
a Web site would, were we to deem it to occur in the United States,
constitute an ``offer'' within the meaning of Section 5(c) of the
Securities Act and Regulation S, a ``public offering'' prohibited under
Section 4(2) of the Act, a ``general solicitation or general
advertising'' prohibited under Rule 502(c) of Regulation D,\25\ and a
``directed selling effort'' prohibited under Regulation S.\26\ The
focus of our analysis, then, is under what circumstances should we deem
offshore Internet offers to which U.S. persons can gain access not to
occur in the United States.
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\25\ Rule 502(c) under the Securities Act [17 CFR 240.502(c)].
\26\ Rule 902(c) [17 CFR 230.902(C)].
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A. Offshore Offerings by Foreign Issuers
1. Regulation S
When a foreign issuer is making an unregistered offshore Internet
offer and does not plan to sell securities in the United States as part
of the offering, it should implement the general measures outlined in
Section III.B. to avoid targeting the United States. Assuming that the
offering is made pursuant to Regulation S, the offering must comply
with all of the applicable requirements under that regulation,
including the requirement that all offers and sales be made in
``offshore transactions.''\27\
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\27\ Rule 902(h) and Rule 903 of Regulations S [17 CFR
230.902(h) and 230.903]. The issuer's or underwriter's use of an
Internet Web site to offer securities will not, by itself, prevent
bona fide offshore purchasers in a Regulation S offering from
reselling into the United States pursuant to registration or an
exemption, such as Rule 144A [17 CFR 230.144A], provided that: (1)
those purchasers are not part of the selling group; (2) those
purchasers are not affiliated with the issuer or any member of the
selling group; and (3) the issuer's or underwriter's use of the Web
site was not undertaken as part of an arrangement with, or on behalf
of, such offshore purchasers.
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2. U.S. Exempt Component
Foreign issuers commonly make offshore offerings concurrently with
private offerings to U.S. institutional buyers. An offering exempt
under Section 4(2) of the Securities Act may not involve ``any public
offering.'' Regulation D specifically prohibits the offer or sale of
securities through a ``general solicitation or general advertising.''
Publicly accessible Web site postings may not be used as a means to
locate investors to participate in a pending or imminent U.S. offering
relying on those provisions. If a Web site posting would be
inappropriate for a U.S. private placement, an issuer should not
attempt to accomplish the same result indirectly through the posting of
an offshore Internet offer.
In addition to implementing the type of precautionary measures
previously discussed, foreign issuers could implement other procedures
to prevent their offshore Internet offers from being used to solicit
participants for their U.S.-based exempt offerings, including:
The Internet offeror could allow unrestricted access to
its offshore Internet offering materials, but not permit persons
responding to the offshore Internet offering to participate in its
exempt U.S. offering, even if otherwise qualified to do so. In that
situation, the offeror would keep a record of all persons responding
over the Internet and all persons who otherwise indicate that they
are responding to the offshore Internet offering;\28\ or
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\28\ To identify those persons who are responding to the
Internet offer, the Web site could provide telephone numbers,
contact persons, or addresses that differ from those used in the
offeror's other, more traditional offering materials. Under an
approach suggested in staff no-action letters, the offeror could
communicate with U.S. persons on the list to determine whether they
are accredited investors with a view towards permitting their
participation in separate, future exempt U.S. offerings by the
issuer or, where the Web site offeror is an intermediary, other
issuers. See Staff no-action letters, Royce Exchange Fund (available
Aug. 28, 1996); Bateman Eichler (available Dec. 3, 1985); E.F.
Hutton & Co. (available Dec. 3, 1985); Woodtrails-Seattle (available
Aug. 9, 1982). Likewise, any investor solicited by the issuer or
underwriter prior to or independent of the Web site posting could
participate in the private offer, regardless of whether the investor
may have viewed the posted offshore offering materials.
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The Web site offeror could ensure that access to the
posted offering materials is limited to those viewers who first
provide their residence information and, in doing so, do not provide
information such as a U.S. area code or address that indicates that
they are a U.S. person.\29\ Thus, U.S. persons could obtain access
only by misrepresenting their residence information.\30\
\29\ This step could be accomplished in multiple ways. For
example, when a person reaches the Web site and then attempts to
move to a section that includes offering information, a screen could
ask for the required residence information. After the user enters
the information, the area code and address could be automatically
and immediately screened to eliminate further access to those who
match a U.S. area code or address. Alternately, the offeror could
require a password and not assign a password until it verifies that
address information, or it could block access by using technology
that recognizes the country from which the Web site is being
accessed.
\30\ Web site offerors must act in good faith to screen U.S.
persons from viewing offering information. A screening mechanism
that suggests ways of easy bypass would not be evidence of good
faith.
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We believe that it would not be advisable for us to dictate the use
of any one particular technology or screening method to protect against
general solicitation in these instances. Any less
[[Page 14810]]
costly, less intrusive method that is equally or more effective than
those that we have suggested would be adequate as well.
In addition, the posted offering materials should relate only to
the offshore offering.\31\ The materials should contain only that
information (if any) concerning the private U.S. offering that is
required by foreign law to be provided to investors participating in
the offshore public offering.\32\
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\31\ A foreign issuer that wishes to use an Internet Web site to
conduct the concurrent private placement in the United States could
follow the general procedures developed in the domestic context for
private placements on the Internet. See, e.g., Staff no-action
letters, IPONET (available July 26, 1996); Lamp Technologies, Inc.
(available May 29, 1997). Under these procedures, the public offer
posted on the Web site may not provide a hyperlink or otherwise
alert the viewer to any Web site containing private placement
offering materials.
\32\ Rule 135c under the Securities Act [17 CFR 230.135c]
provides useful guidance on what limited information could be
included on the Web site under these circumstances.
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B. Offshore Offerings by U.S. Issuers
Our approach to the use of Web sites to post offshore securities
offerings distinguishes between domestic and foreign issuers.\33\ For
the following reasons, additional precautions are justified for Web
sites operated by domestic issuers purporting not to make a public
offering in the United States:
\33\ We use the term ``foreign issuer'' as it is defined in Rule
902(e) of Regulation S [17 CFR 230.902(e)]. See Securities Act
Release No. 7505.
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The substantial contacts that a U.S. issuer has with
the United States justifies our exercise of more extensive
regulatory jurisdiction over its securities-related activities;
There is a strong likelihood that securities of U.S.
issuers initially offered and sold offshore will enter the U.S.
trading markets; and
U.S. issuers and investors have a much greater
expectation that securities offerings by domestic issuers will be
subject to the U.S. securities laws.
Our experience with abusive practices under Regulation S indicates
that we should proceed cautiously when giving guidance to U.S. issuers
in the area of unregistered offshore offerings. As a result, we would
not consider a U.S. issuer using a Web site to make an unregistered
offer to have implemented reasonable measures to prevent sales to U.S.
persons unless, in addition to the general precautions discussed above
in Section III.B., the U.S. issuer implements password-type procedures
that are reasonably designed to ensure that only non-U.S. persons can
obtain access to the offer.\34\ Under this procedure, persons seeking
access to the Internet offer would have to demonstrate to the issuer or
intermediary that they are not U.S. persons before obtaining the
password for the site.\35\
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\34\ See, e.g., IPONET and Lamp Technologies, Inc., supra note
31. Our interpretation therefore would allow for the creation of
limited-access systems. Eventually, closed systems may develop that
target only non-U.S. persons and qualified U.S. investors.
\35\ See Securities Act Release No. 7392 at n.31 (Feb. 28, 1997)
[62 FR 9258] (issuer cannot accept at face value representations by
investors regarding their residence). See also IPONET, supra note
31(IPONET's activities were supervised by an entity that verified
information provided to IPONET by people who filled out IPONET's on-
line questionnaire. Information from the questionnaires was used to
determine whether respondents qualified as accredited investors and
therefore were eligible to obtain password to access password-
protected Web pages where IPONET posted private offerings).
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In the context of broader Securities Act reform, we have been
considering whether the current general solicitation and other offering
communications restrictions on issuers and other offering participants
should be modified to create greater flexibility.\36\ To the extent
that we reform those restrictions on offering communications in the
future, we also will consider the implications of those changes for
unregistered offshore Internet offerings.
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\36\ Securities Act Release No. 7314 (July 25, 1996) [61 FR
40044]; Securities Act Release No. 7187 (July 10, 1995) [60 FR
356545].
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C. Concurrent U.S. Registered Offering
A registered offering in the United States that takes place
concurrently with an unregistered offshore Internet offer presents
concerns because of the Securities Act's restrictions on making offers
prior to the filing of a registration statement or, in the case of
written or published offers, outside of the statutory prospectus.
Consistent with these requirements, therefore, premature posting of
offering information must be avoided. Existing Commission rules that
provide a safe harbor for announcements of anticipated offerings
provide guidance in this respect.\37\ The Commission is considering
whether to provide further guidance or to make further changes
concerning concurrent U.S. registered offerings and offshore Internet
offers in the context of broader Securities Act reforms.
---------------------------------------------------------------------------
\37\ See, e.g., Rule 135 under the Securities Act [17 CFR
230.135].
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D. Underwriters
Just as an issuer must take reasonable steps to avoid offers of
unregistered securities in the United States, so too must persons
acting on behalf of the issuer, such as underwriters or distributors.
These persons, for purposes of the Securities Act, stand in the place
of the issuer.
Thus, regardless of whether the underwriter is foreign or domestic,
what constitutes measures reasonably designed to prevent sales to U.S.
persons will depend on the status of the issuer. For example, if the
issuer is domestic and precautionary measures would call for its Web
site containing offshore offering information to be password-protected,
so too should the information be protected on the underwriter's Web
site.\38\
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\38\ This, however, would not include bona fide research that
complies with the Commission's safe harbor rules for research
reports. See Rules 137-139 under the Securities Act [17 CFR 230.137-
230.139]. Cf. Exchange Act Rule 15a-6(a)(2) [17 CFR 240.15a-6(a)(2)]
(conditional exemption from U.S. broker-dealer registration for
foreign broker-dealers that furnish research reports to ``major
institutional investors'' as defined in the rule).
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V. Additional Issues Under the Investment Company Act
This portion of the release addresses certain issues that arise
under the Investment Company Act when a foreign fund (that is, an
investment company that is organized under the laws of a jurisdiction
other than the United States) makes an offshore Internet offer of its
securities. In general, as with other types of securities offerings, we
would not consider an Internet offer by a foreign fund to cause the
fund to be subject to regulation or registration under the Investment
Company Act if the foreign fund implements measures reasonably designed
to guard against sales to U.S. persons.
The issue raised by the use of the Internet is whether a foreign
fund's Internet offer that can be accessed by U.S. persons should be
considered a public offer in the United States.\39\ Consistent with our
position under the Securities Act, if a foreign fund implements
measures reasonably designed to guard against sales to U.S. persons, we
would not consider the foreign fund's Internet offer to be targeted to
U.S. persons, and therefore would not consider the Internet offer to
constitute a public offer in the United
[[Page 14811]]
States subjecting the foreign fund to regulation and registration under
the Investment Company Act.
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\39\ Section 7(d) of the Investment Company Act generally
prohibits a foreign fund from using U.S. jurisdictional means to
make a public offer of its securities in the United States or to
U.S. persons, unless the fund receives an order from the Commission
permitting it to register under the Investment Company Act. The
Commission may issue such an order only if it finds that it is
legally and practically feasible to enforce the provisions of the
Investment Company Act effectively against the foreign fund, and
that the issuance of the order is consistent with the public
interest and the protection of investors.
For purposes of Section V, references to offers and sales to
U.S. persons include offers or sales in the United States.
Similarly, references to offers or sales in the United States
include offers or sales to U.S. persons.
---------------------------------------------------------------------------
An Internet offer by a foreign fund may arise in a number of
situations. For example, a foreign fund could conduct an Internet offer
that is targeted exclusively offshore. A foreign fund also could
conduct an offshore Internet offer in addition to a private U.S.
offer.\40\ We discuss these situations separately below. We also
address the use of the Internet by unregistered U.S. funds making
private offshore offers, and the use of other forms of Internet
marketing of investment company securities.
---------------------------------------------------------------------------
\40\ In addition, a foreign fund also may use the Internet
exclusively to conduct a private U.S. offer. This release doe not
address the ability of a foreign fund to conduct a private U.S.
offer over the Internet, except to the extent that it is relevant to
the foreign fund's ability to simultaneously conduct an offshore
Internet offer. See infra note 45 and accompanying text. As
discussed above in Section I, the statements made in this release do
not alter the requirement that all offers and sales in the United
States must be pursuant to registration under the U.S. securities
laws or an applicable exemption.
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A. Internet Offers by a Foreign Fund
1. Offers Targeted Exclusively Offshore
When a foreign fund is making an unregistered offshore Internet
offer and does not intend to sell securities in the United States as
part of the offering, our general statements in Section III.B.
outlining the need for precautionary measures to avoid targeting the
United States apply here as well. We may view an Internet offer as
being targeted to U.S. persons, however, if the foreign fund is engaged
in activities, either as a part of or in addition to its Internet
offer, that are designed to attract U.S. persons to the Internet offer,
such as advertising the existence of the foreign fund's Web site in a
U.S. publication.
2. Foreign Funds Conducting Offshore and Private U.S. Offers
Next, we address offshore Internet offers by foreign funds that
also are conducting private U.S. offers.\41\ We would not consider a
foreign fund that is concurrently conducting both a private U.S. offer
and an offshore Internet offer to be making a public offer of its
securities in the United States if the foreign fund implements measures
reasonably designed to guard against public sales of its securities to
U.S. persons, and the Internet offer is not indirectly used as a
general solicitation for participants in the private U.S. offer. As
stated above, what constitutes adequate measures will depend on all of
the facts and circumstances. In addition to implementing the type of
precautionary measures discussed in Section III.B. (with one
modification noted below), a foreign fund could use any procedures
reasonably designed to guard against use of its Internet offer to
generally solicit participants in the U.S. private offer.\42\
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\41\ The staff previously took the position that under certain
circumstances a foreign fund that is conducting an offshore offer
also may make a private U.S. offer in reliance on the exclusion from
the definition of ``investment company'' in Section 3(c)(1) of the
Investment Company Act consistent with the public offering
prohibition contained in Section 7(d). See Staff no-action letter,
Touche Remnant & Co. (available Aug. 27, 1984) (``Touche Remnant'').
In Goodwin Procter, supra note 13, the staff similarly took the
position that under certain circumstances a foreign fund that is
conducting an offshore offer also may make a private U.S. offer in
reliance on the exclusion from the definition of ``investment
company'' in Section 3(c)(7) of the Investment Company Act
consistent with the public offering prohibition contained in Section
7(d). the staff also has stated that if U.S. persons become
shareholders of a foreign fund for reasons beyond the control of the
fund or persons acting on its behalf, the fund would not be required
to count those shareholders as U.S. persons for purposes of
determining whether the fund may rely on the exception from the
definition of ``investment company'' in Section 3(c)(1) of the
Investment Company Act. See Staff no-action letter, Investment Funds
Institute of Canada (available Mar. 4, 1996). The same position
applies to foreign funds relying on Section 3(c)(7) of the
Investment Company Act. See generally Goodwin Procter, supra note
13. We take the position that Touche Remnant is superseded to the
extent that it is inconsistent with these positions.
\42\ See notes 28-32 supra and accompanying text.
---------------------------------------------------------------------------
If a foreign fund that is concurrently conducting a private U.S.
offer and an Internet offer uses a disclaimer that reflects the
existence of two separate offers and indicates that the Internet offer
is not being made in the United States, we would view this action as an
indication that the fund has taken measures reasonably designed to
guard against publicly selling its securities to U.S. persons. The
disclaimer could state, for example, that this offer (the offshore
Internet offer) is not being made in the United States (or identify the
jurisdictions in which the Internet offer is being made) and that the
offer and sale of securities in the United States is not permitted
except pursuant to an exemption from registration.
If, however, a foreign fund directly or indirectly provides any
additional information on its Web site about the types of persons to
whom offers and sales can be made pursuant to an exemption under U.S.
law, or provides guidance on how U.S. persons may obtain this or other
purchasing information, we would view this action as an indication that
the foreign fund is using its Internet offer to target the United
States, except to the extent that foreign law requires that the
information be disclosed.\43\ Moreover, if the foreign fund provides a
hyperlink, or otherwise directs U.S. persons, to another source that
provides information about the private offering, we would view this
action as an indication that the foreign fund is targeting the United
States. In our view, either of these actions could result in the
foreign fund making a public offer in the United States.
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\43\ Although Rule 135c by its terms applies only to Section 5
of the Securities Act, we would take a similar approach with respect
to the type of information that a foreign fund may, if required by
foreign law, provide on its Internet site about a U.S. private offer
without violating the public offering prohibition contained in
Section 7(d) of the Investment Company Act. See supra note 32 and
accompany text.
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A foreign fund also may be making a public offer in the United
States if it provides any other information about the private U.S.
offer on its Web site, except to the extent that foreign law requires
that the information be disclosed.\44\ If the foreign fund wishes to
provide information on its Web site relating to its private U.S. offer
(other than information required by foreign law), it generally may do
so without registering under the Investment Company Act if it adopts
and implements password-type procedures with respect to that
information.\45\
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\44\ An adviser to a foreign fund conducting an offshore
Internet offer that also sponsors a U.S.-registered investment
company with the same investment objectives and policies as the
foreign fund may provide information about, or direct the viewer to,
the registered U.S. offer without the Internet offer being
considered to be a public offer of the foreign fund's securities in
the United States.
\45\ See Lamp Technologies, Inc. and IPONET, supra note 31.
Prequalification and password-type procedures are intended to ensure
that only persons eligible to privately purchase the securities can
obtain access to a Web site used in connection with a private offer
and that the dissemination of information through the Internet site
does not constitute a ``general solicitation'' under Rule 502(c) of
Regulation D under the Securities Act. In addition to the procedures
discussed in Lamp Technologies, there may be other, equally
effective procedures designed to restrict access to information on
the Internet to those persons who are eligible to purchase
securities in a private U.S. offer.
---------------------------------------------------------------------------
As with our position under the Securities Act, we are concerned
that our guidance with respect to the Investment Company Act may be
used by some foreign funds that are conducting Internet offers to
engage in activities that are part of a plan or scheme to make public
offers in the United States. None of our statements in this release is
intended to suggest that any foreign fund could do indirectly what it
could not lawfully do directly.\46\
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\46\ See Section 48(a) of the Investment Company Act.
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B. Offshore Offers by U.S. Funds
As previously noted, the Commission's position on the use of the
Internet for unregistered offshore offers generally distinguishes
between U.S.
[[Page 14812]]
and foreign issuers, based upon the Commission's greater interest in
regulating the conduct of U.S. issuers in the United States. As noted
in Section IV.B., we will not require a U.S. issuer making an offshore
offer over the Internet to register the offer under the Securities Act
if it uses procedures reasonably designed to ensure that only non-U.S.
persons may view the offer. We conclude that the same approach should
apply under the Investment Company Act to U.S. funds making offshore
Internet offers. Thus, we would not consider a U.S. fund making a
private offshore offer in reliance on one of the exclusions from the
definition of ``investment company'' in Section 3(c)(1) or Section
3(c)(7) of the Investment Company Act to be making a public offer in
the United States if the fund uses procedures, such as password-
protected web sites, reasonably designed to ensure the private nature
of the offer.\47\
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\47\ See supra notes 34-35 and accompanying text.
---------------------------------------------------------------------------
As noted above, we are considering whether the current restrictions
on general solicitations in connection with private offers under the
Securities Act should be modified.\48\ In the event that we revise
current Securities Act restrictions on exempt private offers and
unregistered offshore offers, we anticipate that we would consider
parallel revisions under the Investment Company Act.
---------------------------------------------------------------------------
\48\ See supra note 36 and accompanying text.
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C. Other Forms of Internet Marketing of Investment Company Securities
We analyze Internet offers made by or on behalf of a foreign fund
in generally the same manner as offers by other types of issuers.\49\
If a foreign fund or persons acting on its behalf seek to use a third-
party Web site to generate interest in an offshore offer, the
implementation of more stringent restrictions on the offshore Internet
offer may be necessary to ensure that the offer is not being directed
into the United States, including limiting access to the Internet
offering materials to persons who can demonstrate that they are not
U.S. persons.\50\
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\49\ See Section III.D., supra.
\50\ Id.
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VI. Offers of Advisory Services Under the Advisers Act
This portion of the release addresses issues that arise under the
Advisers Act when a foreign adviser (that is, an investment adviser
that is organized under the laws of a jurisdiction other than the
United States) offers its advisory services over the Internet. In
general, a foreign adviser may be able to rely on an exemption from
registration under the Advisers Act if it has fewer than fifteen U.S.
clients and implements measures reasonably designed to ensure that,
based on its Internet activities, the adviser is not holding itself out
as an investment adviser in the United States.\51\
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\51\ Section 203)a) of the Advisers Act generally prohibits any
investment adviser from using U.S. jurisdictional means in
connection with its business as an investment adviser, unless the
adviser is registered with the Commission, or is exempted or
excluded from the requirement to register. Section 203(b)(3) of the
Advisers Act provides for an exemption from registration for any
adviser who during the course of the preceding twelve months has had
fewer than fifteen clients and who neither holds itself out
generally to the public as an investment adviser nor acts as an
adviser to a U.S.-registered investment company or business
development company. The staff has taken the position that foreign
advisers are required to count only their U.S. clients for purposes
of determining whether they are exempt from registration under
Section 203(b)(3). See Protecting Investors: A Half Century of
Investment Company Regulation, at 223 n.6 (1992); Staff no-action
letter, Murray Johnstone Ltd. (available Oct. 7, 1994).
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The issue raised by a foreign investment adviser's use of the
Internet is whether and, if so, under what circumstances, the foreign
adviser may provide information about its advisory services over the
Internet without being considered to be holding itself out as an
investment adviser in the United States. We conclude that a foreign
adviser providing advisory services over the Internet generally would
be holding itself out as an investment adviser. Specifically, we have
stated that we generally will consider an adviser who uses a publicly
available electronic medium, such as the Internet, to provide
information about its services to be holding itself out to the public
as an adviser, and to not qualify for the exemption from registration
contained in
Section 203(b)(3) of the Advisers Act.\52\ If, however, the adviser
implements measures reasonably designed to guard against directing
information provided on the Internet about its advisory services to
U.S. persons, we would not consider the foreign adviser to be holding
itself out as an investment adviser in the United States for purposes
of Section 203(b)(3).
---------------------------------------------------------------------------
\52\ See use of Electronic Media by Broker-Dealers, Transfer
Agents, and Investment Adviser for Delivery of Information,
Securities Act Release No. 7288 (May 9, 1996) at text accompanying
n. 32. But see Lamp Technologies, Inc., supra note 31.
---------------------------------------------------------------------------
What constitutes measures reasonably designed to guard against an
adviser holding itself out as an investment adviser in the United
States will depend on all of the facts and circumstances. We generally
would consider an adviser to have implemented measures reasonably
designed to guard against holding itself out as an investment adviser
in the United States if:
The Web site includes a prominent disclaimer making it
clear to whom the site materials are (or are not) directed.\53\
---------------------------------------------------------------------------
\53\ See supra note 21 and accompaying text.
---------------------------------------------------------------------------
The adviser implements procedures reasonably designed
to guard against directing information about its advisory services
to U.S. persons (e.g., obtaining sufficient residency information
such as mailing addresses or telephone numbers prior to sending
further information), other than to its fourteen or fewer U.S.
clients.\54\
---------------------------------------------------------------------------
\54\ See text following supra note 21.
---------------------------------------------------------------------------
Other measures also may provide adequate assurance that a foreign
adviser is not holding itself out as an investment adviser in the
United States.
VII. Exchange Act Registration Issues
The Internet activities of broker-dealers and markets (including
exchanges) also raise issues under the Exchange Act. Foreign entities
that perform these functions should consider whether their Internet
activities would subject them to registration under the Exchange Act.
A. Broker-Dealer Activities
Broker-dealers must register with the Commission if they are
physically present in the United States, or if, regardless of their
location, they effect, induce, or attempt to induce securities
transactions with investors in the United States. The issue, therefore,
is whether the Commission would deem a broker-dealer's Web site to be
an attempt to induce securities transactions with U.S. persons. Broker-
dealer Web sites may offer market information and investment tools,
real-time or delayed quote information, market summaries, research,
portfolio management tools, and analytic programs. Some sites also
include information on commissions and other fees, branch office
locations, and instructions on how to contact the broker-dealer. In
essence, Web sites advertise the broker-dealers' services to potential
investors with the intent of attracting securities business.
In keeping with the general principles outlined above (Section
III.B.), the Commission will not consider a foreign broker-dealer's
advertising on an Internet Web site to constitute an attempt to induce
a securities transaction with U.S. persons if the foreign broker-dealer
takes measures reasonably designed to ensure that it does not effect
securities transactions with U.S. persons as a result of its Internet
activities.
Under our general principles, as applied in the broker-dealer
context, a
[[Page 14813]]
foreign broker-dealer generally would be considered to have taken
measures reasonably designed to ensure it does not effect securities
transactions with U.S. persons as a result of its Internet activities
if it:
Posts a prominent disclaimer on the Web site either
affirmatively delineating the countries in which the broker-dealer's
services are available, or stating that the services are not
available to U.S. persons; and
Refuses to provide brokerage services to any potential
customer that the broker-dealer has reason to believe is, or that
indicates that it is, a U.S. person, based on residence, mailing
address, payment method, or other grounds.
As a means to implement the latter procedure, the broker-dealer
should require potential customers to provide sufficient residence
information.
These procedures are not exclusive. Adoption of other equally or
more effective precautions can also suffice to demonstrate that the
broker-dealer does not effect securities transactions with U.S. persons
as a result of its Internet activities.
The Commission has exempted foreign broker-dealers that effect
transactions with U.S. customers from registering in the United States
if these customers initiated transactions with the foreign broker-
dealers outside of the United States without solicitation.
Specifically, Exchange Act Rule 15a-6 currently provides an exemption
from U.S. broker-dealer registration for foreign broker-dealers that
effect transactions in securities with or for persons that they have
not solicited.\55\ Foreign broker-dealers that solicit transactions
with U.S. persons, however, are required to register as broker-dealers
in the United States.
---------------------------------------------------------------------------
\55\ Exchange Act Rule 15a-6(a)(1) [17 CFR 240.15a-6(a)(1)].
---------------------------------------------------------------------------
Foreign broker-dealers that have Internet Web sites and that intend
to rely on Rule 15a-6's ``unsolicited'' exemption should ensure that
the ``unsolicited'' customer's transactions are not in fact solicited,
either directly or indirectly, through customers accessing their Web
sites.\56\ In particular, these broker-dealers could obtain, as a
precaution reasonably designed to prevent that result, affirmative
representations from potential U.S. customers that they deem
unsolicited that those customers have not previously accessed their Web
sites. Alternatively, a broker-dealer could maintain records that are
sufficiently detailed and verifiable to reliably determine that such
U.S. customers had not obtained access to its Web site.
---------------------------------------------------------------------------
\56\ Because a securities firm's Web site itself typically is a
solicitation, orders routed through the Web site would not be
considered ``unsolicited.''
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B. Exchange Activities
Until recently, in order to obtain current market information
about, and to purchase or sell securities on, a foreign market, a U.S.
investor typically contacted a U.S. broker-dealer by telephone or
facsimile. Alternatively, the U.S. investor could directly contact a
foreign broker-dealer that is a member of the foreign market. Today,
however, the technology exists for investors to obtain real-time
information about trading on foreign markets from a number of different
sources, and to enter and execute orders on those markets
electronically from the United States. Many exchanges, for example,
offer Web sites through which they provide real-time quotes and other
market information, e-mail addresses for questions, general contact and
membership information (including the names and addresses of members),
and other investing tools.
The U.S. securities laws require exchanges to register with the
Commission if they (or any broker or dealer) ``make use of the mails or
any means or instrumentality of interstate commerce for the purpose of
using any facility of an exchange within or subject to the jurisdiction
of the United States to effect any transaction in a security, or to
report any such transaction.'' \57\ The Commission currently is
considering the question of under what circumstances a foreign market
that provides the ability in the United States for U.S. persons to
trade directly in the market must register as a U.S. exchange.\58\
---------------------------------------------------------------------------
\57\ Section 5 of the Exchange Act, 15 U.S.C. 78e.
\58\ Exchange Act Release No. 38672 (May 23, 1997).
---------------------------------------------------------------------------
At this time, however, the Commission will not apply the exchange
registration requirements to a foreign market that sponsors a Web site
generally advertising the foreign exchange, disseminating quotes
(including real-time quotes with counterparty identification), or
allowing orders to be directed to the market through its Web site, so
long as the exchange takes steps reasonably designed to prevent U.S.
persons from directing orders to the market through its Web site. In
our view, an exchange generally would be considered to have taken steps
reasonably designed to prevent U.S. persons from accessing the market
through its Web site if it:
Posts a disclaimer on the Web site affirmatively
stating either the countries in which the exchange's services are
directly available, or that the exchange's services are not directly
available to U.S. persons;
Requires potential members or direct participants in
the exchange to state their residence and mailing address;
Refuses to allow trading on the exchange through the
Web site by any person that the exchange has reason to believe, or
that indicates it, is a U.S. person; and
Refrains from making arrangements to provide U.S.
persons with access to the exchange over the Internet indirectly
through its members.\59\
---------------------------------------------------------------------------
\59\ This last step would preclude an exchange from relying on
this release if it, for example, sets the terms under which exchange
members provide Internet access to the exchange, or makes
arrangements for U.S. persons to directly clear and settle trades
conducted on the exchange through the Internet. Foreign exchanges
that knowingly provide U.S. persons with access to their trading
facilities through the Internet would not be able to rely on this
interpretation, and may be required to register with the Commission.
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List of Subjects
17 CFR Parts 231, 241 and 276
Securities.
17 CFR Part 271
Investment companies, Securities.
Amendments to the Code of Federal Regulations
For the reasons set forth in the preamble, the Commission is
amending Title 17, Chapter II of the Code of Federal Regulations as
follows:
PART 231--INTERPRETATIVE RELEASES RELATING TO THE SECURITIES ACT OF
1933 AND GENERAL RULES AND REGULATIONS THEREUNDER
1. Part 231 is amended by adding Release No. 33-7516 and the
release date of March 23, 1998, to the list of interpretative releases.
PART 241--INTERPRETATIVE RELEASES RELATING TO THE SECURITIES
EXCHANGE ACT OF 1934 AND GENERAL RULES AND REGULATIONS THEREUNDER
2. Part 241 is amended by adding Release No. 34-39779 and the
release date of March 23, 1998, to the list of interpretative releases.
PART 271--INTERPRETATIVE RELEASES RELATING TO THE INVESTMENT
COMPANY ACT OF 1940 AND GENERAL RULES AND REGULATIONS THEREUNDER
3. Part 271 is amended by adding Release No. IC-23071 and the
release date of March 23, 1998, to the list of interpretative releases.
[[Page 14814]]
PART 276--INTERPRETATIVE RELEASES RELATING TO THE INVESTMENT
ADVISERS ACT OF 1940 AND GENERAL RULES AND REGULATIONS THEREUNDER
4. Part 276 is amended by adding Release No. IA-1710 and the
release date of March 23, 1998, to the list of interpretative releases.
By the Commission.
Dated: March 23, 1998.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-8001 Filed 3-26-98; 8:45 am]
BILLING CODE 8010-01-P