What is the difference between Reg s and Rule 144A?
The two rules are defined as follows: Under the Rule 144A, Qualified Institutional Buyers (QIBs) can trade debt securities without registration and review by the Securities and Exchange Commission (SEC). The Reg S bond type is available for offers and trades of securities outside of the U.S.A. to U.S. and non-U.S. QIBs.
What is 144A and how does it work?
In essence though, 144A permits issuers to sell unregistered bonds IN THE US to "qualified institutional buyers" aka "QIBs" (entities that have a high net worth and can demonstrate that they are or should be viewed as knowledgeable enough to protect themselves and don't need the "protection" of SEC registration to assess the securities.
How does Clearstream handle Reg s and Rule 144A securities?
For Reg S and Rule 144A securities, Clearstream supports full USD cash clearing via DVP settlement of cash and securities internally. In addition, by centralising the issuance and safekeeping of both note formats Clearstream can significantly reduce the conversion time required through trading in the secondary market.