United States

Proposal: Solicitations of interest prior to a public offering


The SEC recently issued Proposed Rule 33-10607, Solicitations of Interest Prior to a Registered Public Offering, which, if finalized, would enable all issuers to engage in “test-the-waters” communications with certain institutional investors regarding a contemplated registered securities offering prior to, or following, the filing of a registration statement related to such offering. The proposed rule and related amendments would expand the "test-the-waters" accommodation, which currently only is available to emerging growth companies, to all issuers. The “test-the-waters” communications would be exempt from restrictions imposed by Section 5 of the Securities Act of 1933 on written and oral offers prior to or after filing a registration statement and would be limited to qualified institutional buyers (QIBs) and institutional accredited investors (IAIs). Proposed Securities Act Rule 163B would permit any issuer, or any person authorized to act on its behalf, to engage in oral or written communications with potential investors that are, or are reasonably believed to be, QIBs or IAIs, either prior to or following the filing of a registration statement, to determine whether such investors might have an interest in a contemplated registered securities offering. 

The proposal will have a 60-day public comment period following its publication in the Federal Register.