Tuesday, May 26, 2015

ANALYSIS: U.S. SEC Further Limits Confidential Submissions By Foreign Private Issuers

By Mark S. Bergman, Adam Givertz, and Patricia Vaz de Almeida, of Paul, Weiss, Rifkind, Wharton & Garrison LLP.

On December 8, 2011, the staff (the “Staff”) of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the “SEC”) announced a new policy that limits the ability of foreign private issuers to submit registration statements (and amendments) to the SEC on a confidential basis.

The new policy will have its most significant impact on issuers that go public via an initial public offering in the United States without listing concurrently on an exchange outside the United States.

Prior Policy

In contrast to U.S. issuers, foreign private issuers registering for the first time (i.e., on Form F-1 [for an initial public offering], on Form F-4 [for an exchange offer in connection with an acquisition or following an offering of debt securities under Rule144A] or on Form 20-F [for a listing with no accompanying public offering]) could generally submit registration statements to the Staff on a confidential basis. This policy was itself a modification of an earlier approach that allowed all registration statements filed with the SEC by foreign private issuers to be filed on a confidential basis.

The new policy will affect a number of Chinese companies, as well as companies in certain industries, such as shipping, that choose to go public only in the United States.

This confidential submission process allows the Staff to review the disclosure, and the issuer to respond to Staff comments and resolve any complicated issues, before a public filing is made. In effect, by submitting confidentially, foreign private issuers are able to prepare to access the U.S. public markets without publicly revealing their intentions until they are ready to launch the offering. However, confidential submissions do not constitute the filing of a registration statement under the U.S. Securities Act of 1933, and thus no offers of securities can be made in the United States until a registration statement is publicly filed with the SEC via its Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system…

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