6 Jan 2010

SEC Proposes Rule Change to Allow Underwriters to Offer Securities of WKSIs Before a Registration Statement is on File With the SEC

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The U.S. Securities and Exchange Commission (SEC) has recently proposed amendments to Rule 163 under the Securities Act of 1933, as amended (SEC Release No. 33-9098), to allow underwriters or dealers who have been authorized in writing by a “well known seasoned issuer” (WKSI) to offer securities to prospective investors prior to filing a registration statement, subject to certain conditions. Currently, Rule 163 exempts WKSIs and their authorized agents and representatives (other than an offering participant who is an underwriter or dealer) from the restrictions on making oral and written offers prior to filing a registration statement. The proposed amendments are a further liberalization of the communication rules for WKSIs and are intended to facilitate “wall crossings” or pre-marketed offerings by the largest issuers.

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