Reg S Category 1/2/3
Regulation S sorts offerings into Category 1, 2, or 3 based on the issuer's US market ties and the type of security, with each category imposing progressively stricter distribution-compliance periods and resale conditions.
Reg S categories are the three tiers - Category 1, 2, and 3 - that Regulation S uses to set how strict an offshore offering's conditions are. The right category depends mainly on how much of a US market connection the issuer has and what kind of security is being sold, and it determines the distribution-compliance period and resale conditions that follow.
In broad terms:
- Category 1 is the least restrictive. It covers offerings with little or no US market interest - for example, securities of a foreign issuer with no substantial US market for them. The conditions are minimal.
- Category 2 adds a distribution-compliance period (commonly 40 days) and selling restrictions. It typically covers equity of foreign reporting issuers and debt securities of US reporting companies.
- Category 3 is the most restrictive. It generally applies to equity of US domestic issuers and imposes the longest distribution-compliance period (often one year for equity, with a shorter period for debt), plus certification, legending, and transfer requirements designed to keep the securities away from US persons during the period.
For tokenized offerings by US companies, Category 3 is the usual landing spot, which means the longest on-chain lock-up and the heaviest controls to prevent early flow-back to US investors.
Which category applies is a technical, fact-dependent determination, so it is one to confirm with counsel for a specific deal rather than assume.
Source: U.S. SEC (sec.gov), as of 2026.
Mentioned in
- Reg S: Offering Tokens to Non-US Investors
Reg S for issuers - how to offer security tokens to non-US investors without SEC registration, the category rules, the compliance period, and pairing it with Reg D.
- Reg S in Practice: Lessons From a Live Raise
Reg S in practice - lessons from running a live Regulation S raise, from investor screening and US-person look-through to the operational details that actually bite.
- Screening for US Persons Behind Entities
Screening for US persons behind entities in a Reg S offering - why beneficial-owner look-through matters, how to do it, and the risks of relying on surface checks.
- Reg S Explained: Investing as a Non-US Person
Reg S explained for non-US investors: how the exemption lets people outside the US buy tokenized securities, what the categories mean, and the resale rules.
Educational content, not financial or legal advice.