SEC Adopts New Rules to Replace Use of Credit Ratings in Determining Eligibility for Forms S-3 and F-3


Effective September 2, 2011, the Securities and Exchange Commission (the “SEC”) will remove credit ratings as eligibility criteria for registration statements on Forms S-3 and F-3 and replace them with new eligibility requirements, as required by Section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The new rules include a grandfather provision for issuers that would have qualified to use Forms S-3 and F-3 under the old rules until September 2, 2014.

Under the old rules, eligible issuers used Forms S-3 and F-3 (each, a “Short Form”) to register securities offerings under the Securities Act of 1933. An issuer may use the Short Form if it satisfies the form’s registrant requirements and at least one of the transaction requirements. One transaction requirement was that securities be non-convertible (such as debt securities) and have been rated “investment grade” by at least one nationally recognized statistical rating organization, or NRSRO.

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