US Person

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From the I’m sorry I asked file, US person means different things to different people. Even different kinds of US Attorney. Even the same U.S. Attorney, when holding different US Securities Regulations in contemplation, or otherwise meditating on the golden mean.

Regulation S of the 1933 Act

For purposes of Regulation S of the 1933 Act, a partnership or corporation is a “U.S. Person” if it is either:

(i) organized or incorporated under the laws of the United States; or

(ii) organized or incorporated under the laws of any jurisdiction other than the United States; and, it is formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act of 1933, unless it is organized or incorporated, and owned, by accredited investors (as defined in Regulation D of the 1933 Act) who are not natural persons, estates or trusts.

Securities Exchange Act of 1934

When considering a security-based swap under Part 240.3a71-3(a)(4) of the Exchange Act, a US Person is:

• Any natural person who resides in the United States.
• Any partnership, corporation, trust, investment vehicle, or other legal person organized, incorporated, or established under the laws of the United States or having its principal place of business in the United States.
• Any discretionary or non-discretionary account of a U.S. person.
• Any estate of a decedent who was a resident of the United States at the time of death.

Commodity Exchange Act of 1936

Never one to be out-done, the commodities regulator defines US personhood in the negative. Here you must be aware of the pitfalls of not being a Non-United States Person for the purposes of Rule 4.7 of that act, “but excluding, for the purposes of Subsection 4.7(D) the exception to the extent it would apply to persons who are Non-United States Persons”. Sometimes, it becomes transparent that regulators really are wilfully engaged in the perpetuation of the legal eagle’s monopoly.

“any person who is not a “Non-United States person” (as such term is defined in Rule 4.7 under the U.S. Commodity Exchange Act of 1936, as amended, but excluding for purposes of subsection (D) thereof, the exception to the extent that it would apply to persons who are not Non-United States persons)

Should you be interested:

“Non-United States person” means:

(A) A natural person who is not a resident of the United States;

(B) A partnership, corporation or other entity, other than an entity organized principally for passive investment, organized under the laws of a foreign jurisdiction and which has its principal place of business in a foreign jurisdiction;

(C) An estate or trust, the income of which is not subject to United States income tax regardless of source;

(D) An entity organized principally for passive investment such as a pool, investment company or other similar entity; Provided, That units of participation in the entity held by persons who do not qualify as Non-United States persons or otherwise as qualified eligible persons represent in the aggregate less than 10% of the beneficial interest in the entity, and that such entity was not formed principally for the purpose of facilitating investment by persons who do not qualify as Non-United States persons in a pool with respect to which the operator is exempt from certain requirements of part 4 of the Commission’s regulations by virtue of its participants being Non-United States persons; and

(E) A pension plan for the employees, officers or principals of an entity organized and with its principal place of business outside the United States.

Given that some of the limbs are mutually exclusive — you can’t be a natural person and a corporation — we can only interpret that “and” as an oddly disjunctive “or”.

The limb that gives the most trouble is limb D, seeing as it descends into a kind of fractal provuso. Putting this in simplified JC terms that are definitely not legal advice (nothing on this site is legal advice, okay?) we think this means

A passive investment vehicle that

(a) was not designed to facilitate investment by US persons in a vehicle that is exempt from CFTC regulations, and

(b) in which fewer than 10% of the beneficial interests in the vehicle are in fact held by US Persons

Tax

A US person is

• Every United States Citizen, whether born in or outside the US, whether by descent or naturalisation.
• Every United States Tax Resident, being someone with a “Substantial Presence” (having been in the United States for at least 31 days out of 1 year or 183 days out of the 3 years), or who has obtained a Green Card.

DON’T YOU WISH YOU’D NEVER ASKED.

See also

• Non-United States person