SEC Division of Trading and Markets no-action letter: Regulation M — Sovereign Bond Exemption

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
DIVISION OF
MARKET REGULATION
January 12,2000
Alan J. Sinsheimer, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
Re: Regulation M - Sovereign Bond Exemption
File No. TP 98-16
Dear Mr. Sinsheimer:
In your letter dated October 8, 1999, as supplemented by conversations with the staff, you request on behalf of Goldman, Sachs & Co. and J.P. Morgan & Co. (collectively, the Firms) an exemption from Regulation M in connection with offerings of certain foreign sovereign debt securities (Sovereign Bonds) issued by non-U.S. sovereign governments. Specifically, you seek an exemption to permit the Firms to act as market makers in Sovereign Bonds while they are distribution participants in offerings of the Sovereign Bonds. We have attached a copy of your letter to avoid reciting the facts that it presents. Unless otherwise noted, each defined term in this letter has the same meaning as in your letter. Response:
On the basis of your representations and the facts presented, but without necessarily concurring in your analysis, the Commission hereby grants an exemption from Rule 101 of Regulation M (Rule 101) to permit the lead underwriters or dealer￾managers of an offering of Sovereign Bonds (collectively, the Dealer-managers), as described below and in your letter, and their market maker affiliatesI to bid for or purchase Sovereign Bonds and any reference securities during the applicable restricted period for the distribution of the Sovereign Bonds. The foregoing relief is subject to the following conditions:
For purposes ofthis letter, the term 'affiliate' means any person that directly or indirectly controls, is controlled by, or is under common control with, a Dealer-manager. ,J