Menu Close

What is Rule 163A?

What is Rule 163A?

Rule 163A provides all issuers (whether or not already public filers) with a non-exclusive safe harbor from Section 5(c)’s prohibition on pre-filing offers for certain communications made more than 30 days before the public filing of a registration statement, even if those communications might otherwise have been …

What is test the waters communications?

In the context of Regulation A offerings, subject to certain conditions, issuers may communicate with potential investors to determine their interest in a contemplated securities offering in reliance on Regulation A. These communications are also informally referred to as test-the-waters communications.

What happens if you violate the Securities Act of 1933?

Penalties. Section 24 of the Securities Act of 1933 provides for fines not to exceed $10,000 and a prison term not to exceed five years, or both, for willful violations of any provisions of the act.

What is a 425 filing?

Form 425 is a document prepared by companies and filed with the SEC disclosing information related to their business combinations, whether that is through a merger or an acquisition.

Is testing the waters an offer?

Since 2012, federal law has allowed EGCs to “test the waters,” communicating with institutional investors ahead of a public offering—indeed, ahead of a registration filing—to determine if there is sufficient investor interest in their securities.

What is testing the waters IPO?

Broadly speaking, Testing the Waters (TTW) meetings are designed to help inform a management team about whether they should endeavor to raise capital from the public equity markets. Following a successful series of TTW meetings, a company will have a more informed view of the likely success of an IPO.

What is a 506 offering?

Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that: all purchasers in the offering are accredited investors. the issuer takes reasonable steps to verify purchasers’ accredited investor status and.

What is a Reg A+ offering?

Regulation A+ is the colloquial name given to the SEC rules that amended and expanded a rarely used offering exemption named Regulation A. As amended, Regulation A+ provides an exemption for U.S. and Canadian companies to raise up to $50 million in a 12-month period.

What is Section 5 of the Securities Act?

Under Section 5 of the Securities Act, all issuers must register non-exempt securities with the Securities and Exchange Commission (SEC). Section 5 regulates the timeline and distribution process for issuers who offer securities for sale.

What is Section 5 (d) of the Corporate Governance Act?

Section 5 (d) permits an emerging growth company (“EGC”) and any person acting on its behalf to engage in oral or written communications with potential investors that are QIBs and IAIs before or after filing a registration statement to gauge such investors’ interest in a contemplated securities offering.

Are these communications exempt from Section 5 of the Securities Act?

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.

What is Section 3 (a) (6) of the SEC Act?

Securities Act Section 3 (a) (6) 222.01 A company issued securities under Section 3 (a) (6) but has lost its eligibility to use that exemption in the future.

Posted in Advice