The SEC Division of Corporation Finance granted relief under Securities Act Rule 144A with respect to issuances by non-U.S. financial institutions of contingent convertible capital securities that are intended to raise regulatory capital for the institution. The relief was required, as the conversion price of the securities would not otherwise satisfy the conditions of Rule 144A(d)(3)(i).

The Division granted relief on the basis of a number of conditions, including that:

  • the contingent convertible securities would qualify as regulatory capital, and would be issued only for the purpose of meeting regulatory capital requirements;
  • the contingent convertible securities would not be of the "same class as securities listed on a national securities exchange or quoted on a U.S. automated inter-dealer quotation system";
  • the contingent convertible securities would "automatically and mandatorily" convert into common stock upon certain trigger events outside the issuer and security-holders' control; and
  • neither the issuer nor security-holders would have the option to convert the contingent convertible securities into the common stock of the issuer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.