The Securities and Exchange Commission announced recently that
it is adopting new Rule 163B to allow all issuers to
"Test-the-Waters" with potential investors whom they
reasonably believe are Qualified Institutional Buyers (QIBs) and/or
Institutional Accredited Investors (IAIs). In 2012, the JOBS Act
allowed Emerging Growth Companies (EGCs) to engage in
Testing-the-Waters discussions, but companies either too large or
too seasoned to qualify as EGCs did not receive this benefit.
Rule 163B will afford non-EGCs, or persons authorized on their
behalf, the same flexibility currently granted to EGCs. As such,
they can soon engage in oral or written communications with
potential large institutional investors either prior to or
following the filing of a registration statement. The new rule can
be used by issuers contemplating an IPO as well as reporting
issuers, though reporting issuers should keep in mind Regulation FD
and other concerns regarding the selective disclosure
