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New SEC Rules Permit All Issuers to "Test the Waters"

Alert
09.30.2019
By Steve Quinlivan, Bryan Pitko and Jaclyn Schroeder

Stinson LLP has prepared an analysis of new SEC rules in a release captioned "Solicitations of Interest Prior to a Registered Public Offering." New Rule 163B enables all issuers to engage in test-the-waters communications with qualified institutional buyers and institutional accredited investors regarding a contemplated registered securities offering.

The communications permitted by the new rules will be exempt from restrictions imposed by Section 5 of the Securities Act on written and oral offers prior to or after filing a registration statement. The expanded test-the-waters provision will also provide all issuers with flexibility in determining whether to proceed with a registered public offering while maintaining appropriate investor protections.

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