---
kind: "section"
citation: "12 C.F.R. § 218.771"
title: "12"
number: "218.771"
heading: "Exemption from the definition of “broker” for banks effecting transactions in securities issued pursuant to Regulation S."
url: "https://uscodex.org/cfr/12/218.771"
---

# §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)](/usc/15/78c.md?p=a-4)), to the extent that, as agent, the bank:
  - (1) Effects a sale in compliance with the requirements of [17 CFR 230.903](/cfr/17/230.903.md) 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)](/cfr/17/230.902.md?p=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](/cfr/17/230.903.md) 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)](/cfr/17/230.903.md?p=b-2) or [(b)(3)](/cfr/17/230.903.md?p=b-3), the resale is made in compliance with the requirements of [17 CFR 230.904](/cfr/17/230.904.md); 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](/cfr/17/230.903.md) 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)](/cfr/17/230.903.md?p=b-2) or [(b)(3)](/cfr/17/230.903.md?p=b-3), the resale is made in compliance with the requirements of [17 CFR 230.904](/cfr/17/230.904.md).
- (b) **Definitions.** For purposes of this section:
  - (1) **Distributor—** has the same meaning as in [17 CFR 230.902(d)](/cfr/17/230.902.md?p=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)](/cfr/17/230.902.md?p=k).

## Notes

### Authority

Authority: 15 U.S.C. 78c(a)(4)(F).

### Source

Source: Reg. R, 72 FR 56554, Oct. 3, 2007, unless otherwise noted.