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The Update and Practical Considerations
- IPO companies and other companies may have their registration statements go effective automatically 20 days after filing by operation of Section 8(a) of the Securities Act of 1933 (the "Securities Act"), notwithstanding the omission of pricing and price-dependent information from those registration statements.
- To take advantage of this path to effectiveness of a registration statement a company will need to either amend a pending filing to remove the delaying amendment (the statement included in registration statements that delays effectiveness until the registration statement is declared effective by the Securities and Exchange Commission ("SEC")) or file a new registration statement without a delaying amendment.
- Companies considering using this approach must weigh several factors, including whether SEC staff review of their registration statement was substantially complete and, if not, how to address any unresolved SEC comments, as well as the antifraud provisions of the federal securities laws, which apply regardless of the manner in which the registration statement becomes effective.
The Details
Today, the SEC staff updated its government shutdown guidance to provide regulatory relief to IPO companies and other companies seeking to proceed with public offerings during the shutdown.
Rule 430A, which permits pricing and price-dependent information to be omitted from a registration statement that is declared effective by the SEC, ordinarily is only available for registration statements that are declared effective by the SEC (as opposed to going automatically effective in accordance with Section 8(a) of the Securities Act). However, in its updated guidance, the SEC staff, taking into account their unavailability to review or accelerate the effectiveness of registration statements during the shutdown, advised that they will not recommend enforcement action if a company omits Rule 430A information from its registration statement that is filed during the shutdown without a delaying amendment and goes effective automatically, during or after the shutdown, by operation of Section 8(a) of the Securities Act. The SEC staff's September 30 guidance, which we discuss here and here, otherwise remains the same.
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