[co-author: Kaylen R. Loflin]

The SEC announced today that it has adopted new Rule 163B, which will extend the “test-the-waters” accommodation, previously available only to emerging growth companies (“EGCs”), to all issuers. The rule permits any issuer to engage in oral or written communications with potential investors that are, or are reasonably believed to be, qualified institutional buyers (“QIBs”) or institutional accredited investors either prior to, or following, the filing of a registration statement.

The new rule does not require any legends on or filing of any written communications with the SEC. The rule also is non-exclusive and issuers may rely on other Securities Act rules and exemptions, such as Rule 163, which is an exemption from Section 5(c) of the Securities Act for certain communications by well-known seasoned issuers.

The new rule is the latest in the SEC’s efforts to deregulate certain “offers” that are deemed not contrary to the public interest but assist issuers and others in the capital raising process.

New Rule 163B will become effective 60 days after publication in the Federal Register.

The entire release (No. 33-10699) by the SEC can be found here.