Shareholder Limit

Important Information About U.S. Holder Count Limits and Regulations

U.S. regulations limit the number of U.S. holders for certain types of securities and Issuers have the discretion to further limit holder counts.

The number of U.S. holders  may be limited under certain U.S securities regulations. When a limit is reached, no new bids from any U.S. user are accepted until the limit is reduced below the maximum amount of holders. Ongoing bids from non-holders  are canceled until such a time when the number of U.S. holders is below the regulatory limit. The person issuing the security can reduce the holder count limit at their discretion.

For Example

In the case of a security within theU.S. Holder limit:

Existing holders (permitted U.S. users) can enter bids or offers on the security. 

Persons without existing holdings on the security (permitted U.S.user) can enter bids but not offers.

Other existing holders (non-U.S. users) can enter bids or offers on the security.

Other persons without existing holdings on the security (non-U.S.user) can enter bids but not offers.

In the case of a security that has reached the U.S Holder limit:

Existing holders (permitted U.S. users) can enter bids or offers on the security, and any active orders continue as before.

Persons without existing holdings on the security (permitted U.S.user) cannot enter bids, and any active orders are cancelled. Bids cannot be submitted until the number of U.S. holders drops below the limit.

Other existing holders (non-U.S. users) can enter bids or offers on the security.

Other persons without existing holdings on the security (non-U.S.user) can enter bids but not offers.

In the case of a security approaching the U.S Holder limit:

Existing holders (permitted U.S. users) can enter bids or offers on the security, and any active orders continue as before.

Persons without existing holdings on the security (permitted U.S.user) cannot enter bids, and any active orders are cancelled.

If there is one open space and multiple open bids, the final space is given to the person who can acquire securities from an existing holder.

Example:

A security has a U.S.holder count limit of 80 and has 79 active holders.

There are three open bids, A, B, and C, each at $1.00 per share for 50 shares.

Bidder B buys 50 shares from an existing holder, therefore becoming the 80th U.Sholder.

Bidders A and C then have their open orders cancelled.

The security is then at the maximum number of U.S. holders and no further U.S. bids are accepted.

Other existing holders (non-U.S. users) can enter bids or offers on the security, andany active orders continue as before.

Other persons without existing holdings on the security (non-U.S.user) can enter bids but not offers, any active orders continue as before.

Further information on specific SES rules and guidelines is available via the following links.

The Securities and Exchange Commission offers more in-depth guidance on securities and trading law, buyer and seller eligibility, and other rules and regulations. The following links provide detailed insight into everything there is to know about securities and shareholder limits.

SEC Rule 144

SEC Rule 144A - Private resales of securities to institutions (17 CFR § 230.144A)

SEC Revisions to Rule 144 and 145

SEC Fast Answers – Securities Act Rule 144

SEC Investor Alert – Rule 144

SEC Investor Publications - Rule 144: Selling Restricted and Control Securities

SEC Regulation D

SEC Regulation D Guidance
Related Resources:

SEC Guidance for Issuers under Rule 504 of Regulation D

SEC Filing and Amending a Form D Notice

SEC Disqualification of Felons and Other "Bad Actors" from Rule 506 Offerings and Related Disclosure Requirements

SEC Guidance on Shareholder Registration Requirements
Related Resources:

SEC Accredited Investor Status

SEC Accredited Investor Net Worth Standard

Regulation S—Rules Governing Offers and Sales Made Outside the United States Without Registration Under the Securities Act of 1933

Beneficial Ownership Limit for “3(c)(1)” Funds

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