SEC Limits Confidential Draft Filings by Non-US Issuers – Legal Roundup

The Securities and Exchange Commission’s Division of Corporation Finance recently announced that foreign private issuers considering accessing US capital markets will no longer be able to submit draft filings on a confidential basis. Historically, non-US issuers were allowed to seek out and respond to SEC staff comments on draft filings before publicly declaring their intentions and revealing financial and other information. As of December 8, 2011, they are no longer able to do so.

For your reference, a roundup of commentary and analysis on the change and what it means for foreign private issuers, from securities lawyers on JD Supra:

SEC Staff Limits Ability of Foreign Issuers to Submit Draft Filings on Confidential Basis (McDermott Will & Emery) 

“This represents a further curtailment of the staff’s confidential review policy for foreign private issuers. In March 2001, the staff revised its former policy of permitting foreign private issuers to submit all registration statements for staff review in draft form on a confidential basis and began only accepting for review on a confidential basis draft registration statements in connection with a registrant’s initial registration with the SEC.” Read more»

SEC Limits its Non-Public Review Policy for Non-U.S. Issuers (Schwell Wimpfheimer & Associates LLP)

“The policy had previously allowed many non-U.S. issuers to avoid the public scrutiny of a public filing of their initial registration statement (including Staff comments) that comes along with filing through the EDGAR system… The Staff also indicated that shell companies, blank check companies and issuers with no or substantially no business operations will not be eligible for non-public submission of their registration statements.” Read more»

SEC Modifies Its Non-Public Submission Policy for Foreign Private Issuers (White & Case LLP) 

“This change effectively means that [foreign private issuers] conducting an IPO only in the United States will now have to file their registration statements publicly via the EDGAR system. This requirement applies to future amendments to registration statements that are currently under review by the SEC, although the SEC will continue to review confidential submissions received prior to December 8, 2011. It should be noted that the December 8 statement does not change the other benefits that [foreign private issuers] receive as a result of that status.” Read more»

All Good Things Must Come to an End: The SEC Limits Confidential Submissions by Foreign Private Issuers (Morrison & Foerster LLP) 

“The SEC has stated that the new policy is intended to ‘promote transparency and investor protection.’ The SEC indicated that, when the confidential submission policy was initially developed, most foreign private issuers effecting a U.S. public offering also had or were having their securities traded on a non-U.S. securities exchange, and the non-U.S. market did not ordinarily have a practice of requiring public disclosure of the registration statement before the completion of its review.” Read more»

Confidential Filings Limited for Foreign Private Issuers (Steven Khadavi) 

“Given that a large number of foreign private issuers filing registration statements in the U.S. are either already listed in their home jurisdictions or intend to be concurrently listed, we do not expect the new Commission policy to have a significant impact on filings, other than for foreign private issuers undertaking a listing exclusively on a U.S. exchange.” Read more»

New SEC Policy Limits Non-Public Submissions from Foreign Private Issuers (Dechert LLP)

“A foreign issuer contemplating initial registration with the SEC should consider whether it will be eligible for the non-public submission process under the new policy. If it will not be eligible, the foreign issuer should review and discuss with its advisors the requirements and implications of the public filing process. A foreign issuer that appears to be eligible for the confidential review process under the new policy should remember that, as discussed above, the Staff may require a registration statement to be publicly filed even though it is eligible for confidential review.” Read more»


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