U.S. DEVELOPMENTS -
SEC and NYSE/Nasdaq Developments -
SEC Proposes to Expand “Testing the Waters” Exemption to Permit Pre-Offering Communications -
On 19 February 2019, the Securities and Exchange Commission (SEC) proposed an expansion of the allowance under the 2012 Jumpstart Our Business Startups Act (“JOBS Act”), referred to as “testing the waters”, which is currently only available to emerging growth companies (EGCs). The new Rule 163B under the Securities Act of 1933 (“Securities Act”) would, if adopted, enable all issuers (and their authorised representatives, including underwriters) to engage in communications with certain categories of large institutional investors prior to or after the filing of a registration statement to assess investor interest in a registered offering. These communications would be exempt from the prohibition imposed by Section 5 of the Securities Act on making any written or oral offers prior to the filing of a registration statement with the SEC.
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