Publications

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The Staff of the Division of Corporation Finance of the Securities and Exchange Commission has announced that, effective immediately, it has changed its procedures relating to the ability of foreign private issuers and foreign governments (Foreign Entities) to submit to the Staff registration statements and amendments on a confidential basis in connection with their first-time registration with the SEC.  

Historically, the Staff has taken into account that Foreign Entities often face unique circumstances when accessing US public markets.  The Staff has allowed Foreign Entities to submit to the Staff registration statements and amendments on a non-public basis in connection with the first-time registration of their securities under the Securities Act of 1933 or the Securities Exchange Act of 1934.  The Staff reviewed and commented on the disclosure, and the Foreign Entity responded to such comments, before the Foreign Entity was required to make the filing public through the EDGAR system.  In its discussion of the historical policy, the Staff notes that the majority of foreign private issuers registering securities with the SEC also had or were having their securities traded on a foreign securities exchange, and the foreign market ordinarily did not have a practice of requiring public disclosure of the registration statement before completion of review.  More recently, the Staff notes, the vast majority of foreign private issuers using the Staff’s confidential review procedure were not contemplating listing securities outside the United States.

Under the new policy, announced December 8, 2011, confidential Staff review of initial registration statements of Foreign Entities will be available only where the registrant is:

 

(1) a foreign government registering its debt securities

(2) a foreign private issuer that is listed or is concurrently listing its securities on a non-US securities exchange

(3) a foreign private issuer that is being privatized by a foreign government or

(4) a foreign private issuer that can demonstrate that the public filing of an initial registration statement would conflict with the law of an applicable foreign jurisdiction

In addition, registration statements of shell companies, blank check companies and issuers with no or substantially no business operations will no longer be eligible for confidential Staff review.

The Staff cautioned that there may be instances where it may request a Foreign Entity to publicly file its registration statement even though it comes within the general parameters of the revised policy.  Examples of such circumstances include a competing bid in an acquisition transaction or publicity about a proposed offering or listing.  Thus a foreign private issuer engaging in pre-marketing publicity in its home market in connection with a global offering may, unless it takes appropriate precautions to keep that publicity offshore, become obligated to publicly file its registration statement relating to the US portion of the offering at the same time as it engages in that publicity if the Staff so requests.

The Staff noted that non-public submissions of Foreign Entities not falling within one of the above categories and received by the Staff before December 8, 2011 will continue to be reviewed by Staff without a public filing.  However, these issuers will have to publicly file the next draft of the registration statement, whether in response to comments issued by the Staff or otherwise, on the EDGAR system.

In an additional development, the Staff announced that the Division has established a dedicated e-mail box for the receipt of all registration statements and other submitted materials under its revised policy. Effective immediately, those submissions may be made by email to: .

As was the case under the historical policy, Foreign Entities should contact the Division’s Office of International Corporate Finance before making any non-public submission under the revised policy. Moreover, counsel for Foreign Entities should take note that in its announcement of the revised policy, the Staff cautioned that it will continue to assess use of the revised policy and may make changes in the future.

For the full text of the Staff's announcement of the revised policy, visit this page.

Questions regarding the matters discussed here may be directed to the following or to your DLA Piper lawyer:

 

Christopher C. Paci                  

Chair, Capital Markets (US)

 

Marjorie Sybul Adams

 

George Barboutis

 

Peter V. Darrow

 

John F. Haley

 

Jack I. Kantrowitz                       

 

Stephen Peepels           

Chair, US Capital Markets (Asia)          

 

Steven D. Pidgeon

 

Sanjay M. Shirodkar