The US Securities and Exchange Commission (SEC) has adopted
a new rule that extends its test-the-waters accommodation to
include all companies, not only emerging growth companies
(EGCs) as had previously been the case.
In doing so it has made a number of clarifications to the
wording of rule 163B as it was proposed in February, following
a 60-day comment period. The rule will allow all issuers to
engage in oral or written communications with potential
investors to determine interest.
"It is a very positive change as far as making it easier for
companies on the capital-raising front," said
Anna Pinedo, partner at Mayer Brown. "What was adopted was
virtually identical to what was proposed; the only things that
were different were clarifications, which were very
One reference that, according to Pinedo, raised some
concerns for the market was that the test-the-waters material
that was filed had to be the...