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{{a|repack|{{image|selling restrictions|png|}}}}{{d|{{PAGENAME}}|/ˈsɛlɪŋ rɪsˈtrɪkʃənz/|n|}} | {{a|repack|{{image|selling restrictions|png|}}}}{{d|{{PAGENAME}}|/ˈsɛlɪŋ rɪsˈtrɪkʃənz/|n|}}A kind of cold spaghetti designed for pre-emptive self-flagellation. | ||
A series of interminable intercessory prayers offered by an arranger that its syndicate will behave themselves, made public flesh in pages and pages of impenetrable [[Magic circle law firm|Magic Circle]] [[boilerplate]] that recite the public and private offering regulations in any jurisdiction in which the securities might possibly be offered. | |||
=== On existence and function === | |||
Ask a [[Red-herring ninja|capital markets lawyer]] what a selling restriction ''is'', and you can expect a fulsome answer. She will happily provide reams of examples — dense, lengthy tracts reciting ancient American [[Securities Act of 1933|securities laws]], regulations, rules and associated [[Securities Exchange Act of 1934|apocrypha]]; inscrutable alphanumeric codes referencing regulations of the European Parliament and of the Council; [[RESIDENTS OF NEW HAMPSHIRE|block-capital harangues of New Hampshire residents]], and any number of flavourless local variations. Bond lawyers collect these and paste them into precedent scrap-books, to be annually updated, the same way wanton schoolboys collect football cards for their Panini albums. | |||
But ask her what these selling restrictions are ''for'', and you’ll get a blanker look. For all its wealth of human knowledge, Google is no better informed. | |||
Selling restrictions occupy, by immutable historical custom, about half of the [[prospectus]]. The back half. A prospectus is the securities world’s version of an advertorial: it hotly denies being an offer, but it is hard to see what else it is for. In any case, the solemn pledge that a document shall not be given to a New Jersey resident, when printed on that document, serves little practical use if, in fact, it is not — and scarcely more use if it ''is''. | |||
If anything, it only makes matters worse. As she casually flips the pages,<ref>She won’t. It is an axiom of financial services practice that no person alive reads a [[prospectus]], including those who write them.</ref> an unchaperoned New Jerseyan might, on learning she has only come by the prospectus through someone’s impropriety, wonder whether she has stumbled upon a ''free [[option]]''. If an institution has, by its own written admission, transgressed regulations, is this not a [[roadmap to litigation]]? | |||
Was a cause of action ever dismissed because of a judicious selling restriction? We doubt it. Was one ever lost, because one was not there? Again, we doubt it. | |||
One of the more pointless wastes of trees in the realm of securities marketing, selling restrictions to a [[Red-herring ninja|bond lawyer]] are almost as ineffable but tedious (ineffability and tedium being, of course related concepts) and infused with a sombre, ambulatory horror as [[netting opinion]]s are to an [[ISDA Ninja]]. There is no end of bother one can theoretically get into should one offer for sale in a place you are not to meant to, a commercial security. | |||
This is all deep lore, reflecting two facts: one, that one can “offer for sale” in a way that can get you deep in the schtook, a security without actually erecting a billboard and or advertising on the side of a bus; more psychologically fragile securities lawyers have been known to seek safe spaces at the mere casual mention of a tradable financial instrument; and two, there was once a time, many, mean years ago, where [[Belgian dentist]]s, tax dodgers and other undesirable types could buy and sell securities literally out of the boot of the Citroën in which they had just collected them from the Luxembourg [[issue and paying agent]], and thus the practical controls on whom one could offer, or even sell, securities to were very limited. | This is all deep lore, reflecting two facts: one, that one can “offer for sale” in a way that can get you deep in the schtook, a security without actually erecting a billboard and or advertising on the side of a bus; more psychologically fragile securities lawyers have been known to seek safe spaces at the mere casual mention of a tradable financial instrument; and two, there was once a time, many, mean years ago, where [[Belgian dentist]]s, tax dodgers and other undesirable types could buy and sell securities literally out of the boot of the Citroën in which they had just collected them from the Luxembourg [[issue and paying agent]], and thus the practical controls on whom one could offer, or even sell, securities to were very limited. | ||