On February 7, 2018, the staff of the SEC's Division of Corporation Finance ("Staff") issued a no-action letter in connection with Constellium N.V.'s ("Constellium") proposed conversion to a European company (Societas Europaea, or SE). The no-action letter confirmed that the SEC would not recommend enforcement action if Constellium undertook the conversion without registration under the Securities Act of 1933 ("Securities Act"), >in reliance on Securities Act Rule 145(a)(2).
Constellium's conversion to an SE comprised two steps:
- First, Constellium would convert from a Dutch public company with its registered office in the Netherlands, to an SE governed by the laws of the Netherlands with its registered office in the Netherlands, pursuant to the European Council Regulation No. 2157/2001 ("Conversion"). The Conversion would require shareholder approval.
- Second, Constellium would transfer its registered office from the Netherlands to France ("Transfer"). The Transfer, like the Conversion, would require shareholder approval.
Constellium acknowledged that both the Conversion and the Transfer trigger the registration requirements of the Securities Act. Under Securities Act Rule 145(a), an "offer, offer to sell, offer for sale, or sale" of securities occurs, thereby triggering the registration requirements, when "pursuant to statutory provisions of the jurisdiction under which [a] corporation . . . is organized, or pursuant to provisions contained in its certificate of incorporation or similar controlling instruments, or otherwise, there is submitted for the vote or consent of [the] security holders a plan or agreement for" a reclassification.
While Constellium intended to register the Transfer under the Securities Act, it sought no-action relief that the Conversion would not require Securities Act registration, on the basis that Securities Act Rule 145(a)(2) provides that registration is not required when "the sole purpose of the transaction is to change an issuer's domicile solely within the United States." Constellium pointed to a 2006 no-action letter, wherein the Staff found that the Rule 145(a)(2) exception applied when a German stock corporation organized under the laws of the Federal Republic of Germany converted to an SE.
The Staff agreed with Constellium's argument that the Conversion falls within the Rule 145(a)(2) exception and therefore does not require Securities Act registration. The Staff pointed to the following four facts in explaining its decision:
- after the Conversion, Constellium will remain a public limited company, and its registered office will remain in the Netherlands;
- the laws of the Netherlands will continue to apply to Constellium;
- the Conversion does not effect a change in national jurisdiction or a change of Constellium's registered office or seat from one EU Member State to another; and
- Constellium will register the Transfer on Form F-4.
The no-action letter is available at:
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