Book-entry deposit procedures for certain offerings by non-US issuers under Section 3 of the Investment Company Act

Issuers relying on Section 3(c)(7) of the Investment Company Act of 1940, as amended, are frequently confronted with the question of how to ensure that they can establish the "reasonable belief" that their investors are "qualified purchasers" (QPs), as required under the Investment Company Act. US issuers have to ensure that both their US and non-US investors are QPs, while non-US issuers have to ensure only that their US investors are QPs. The inquiry does not stop at the initial investor level, however, as the QPs requirement extends to subsequent transferees in most circumstances. Ensuring that transferees are QPs becomes difficult for issuers when the securities issued are in book-entry form and the book-entry facilities do not monitor the qualifications of investors to ensure QP status. The 2008 Procedures are designed to help certain non-US issuers relying on the Section 3(c)(7) exception, for whom the 2003 Procedures are not available, to access the US capital markets.