SEC EXPANDS ACCESS TO TEST-THE-WATERS COMMUNICATIONS.

Author:Barias, Stephen
Position:SEC/
 
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The U.S. Securities & Exchange Commission (SEC) has made it easier for some companies to file for initial public offerings (IPOs) by expanding its test-the-waters policy. The 2012 Jumpstart Our Business Startups (JOBS) Act allowed emerging growth companies (EGCs) to communicate with two experienced classes of investors prior to and after deciding to issue stock. The two categories with whom potential issuers can talk are qualified institutional buyers or institutional accredited investors. At the end of September 2019, the SEC said all stock issuers, not just EGCs, could test the waters with those two groups. The thing to watch for going forward is whether any of the information disclosed under this rule might run afoul of restrictions in Regulation Fair Disclosure (Reg. FD), which requires public disclosure of any...

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