General Securities Sales Supervisor (Series10) Practice Exam

Under Regulation S, who can purchase securities offered overseas?

1. A U.S. citizen traveling overseas

2. A U.S. citizen residing overseas

3. A U.S. citizen not residing in the U.S.

4. Any person, provided the sale occurs outside the U.S.

The correct answer is: A U.S. citizen not residing in the U.S.

The correct answer highlights that under Regulation S, any person can purchase securities offered overseas as long as the sale occurs outside of the U.S. This regulation is intended to promote and facilitate capital raising in international markets by allowing issuers and their affiliates to sell securities without the burdens of U.S. registration requirements, provided the transactions are conducted outside the U.S. borders. In the context of the other choices, while a U.S. citizen traveling or residing overseas may engage in transactions, the regulation primarily concerns itself with the location of the sale: - A U.S. citizen traveling overseas or residing overseas can participate, but the regulation does not restrict sales to just these groups. - The key condition is related to where the transaction takes place, not the residency status of the purchaser. - Therefore, any individual, regardless of citizenship, can engage in such purchases outside the U.S., emphasizing that the geographical aspect of the sale is what's critical in this context.