On September 26, the SEC adopted new rules that will allow all companies, regardless of size or reporting status, to use “testing the waters” communications. Under the new rules, any issuer or any person authorized to act on the issuer’s behalf will be able engage in oral or written communications to qualified institutional buyers and institutional accredited investors, before or after the filing of a registration statement, to assess investor interest in the offering. Currently, pre-filing testing the waters communications may be made only by “emerging growth companies” and underwriters acting on their behalf.
The new rules will become effective 60 days after publication in the Federal Register, probably in December.
Further details on the proposals will be available shortly in The Securities Edge, our securities and corporate governance blog. If you have any questions in the meantime, please contact Gunster securities law and corporate governance practice leader Bob Lamm or Gus Schmidt.
