Of late I have been receiving a number of questions on legal requirements for selling retail diaspora bonds in the US. I am enclosing below some general information, but with the caveat that I am not a lawyer and I may be wrong. In the end reputable law firms (rather than economists like me) ought to be consulted.
- Retail diaspora bonds (even if they are a part of a larger institutional offering) should be registered under SEC Securities Act 33 Schedule B.
- It can take 2-3 months to complete registration.
- There will be detailed disclosure requirement for the prospectus at the time of registration, and also annual reporting during the life of the bond.
- The SEC website shows that the filing fee is $114.6 per million dollars - see http://www.sec.gov/news/press/2011/2011-195.htm.
- Issuers can market on their own or have a captive broker-dealer or hire broker-dealers.
- Issuers of diaspora bonds must work with some reputed law firms in the US. Legal cost can be significant.