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Some general information on US SEC registration of diaspora bonds

Dilip Ratha's picture

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.