The SEC Division of Corporation Finance provided interpretive guidance that confirmed that a registered broker-dealer and investment adviser's proposed procedures for offering and selling securities in initial public offerings would not involve a pre-effective sale. The approved procedures would allow the broker-dealer to solicit "conditional offers to buy" from high net-worth clients.
Commentary / Steven Lofchie
Other firms undoubtedly will seek to apply the new procedures provided in this guidance to their own activities. Given the high potential liability for getting it wrong, firms should stay within the four corners of the no-action letter, or seek relief tailored to their different individual circumstances.
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