SEC-Pulse-blog-masthead

SEC Allows "Test the Waters" Communications for All Companies

Posted by Howard Berkenblit on September 26, 2019 at 3:25 PM
Find me on:

Yesterday the SEC adopted a new rule 163B (Final rule release can be found here) that extends a “test-the-waters” accommodation—currently a tool available to emerging growth companies or “EGCs”—to all issuers.

Under the new rule, all issuers will be allowed to engage in test-the-waters communications with qualified institutional buyers and institutional accredited investors regarding a contemplated registered securities offering prior to, or following, the filing of a registration statement related to such offering. These communications 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. Under the rule there are no filing or legending requirements; the communications are deemed “offers”; and issuers subject to Regulation FD will need to consider whether any information in a test-the-waters communication would trigger disclosure obligations under Regulation FD or whether an exemption under Regulation FD would apply.

Topics: SEC Filings

Sullivan 4c

About the Blog


The SEC Pulse provides updates and commentary from our Capital Markets Group on issues affecting publicly traded and privately owned businesses, investment banks and foreign companies who trade or raise capital in the United States, and boards of directors and company officers in securities transactions and corporate governance matters.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

Subscribe to Blog

Recent Posts

Posts by Topic

see all