Key takeaways:
- The Securities and Exchange
Commission adopted new Rule 163B to permit all issuers to engage in
oral or written "testing-the-waters" communications prior
to or following the issuer's filing of a registration statement
with respect to its securities.
- Rule 163B communications are
permitted to be made to potential investors who are, or who the
issuer reasonably believes to be, qualified institutional buyers or
institutional accredited investors.
- Rule 163B communications do not need
to be filed with the Securities and Exchange Commission or include
any specified legend.
Background. On September 25, 2019, the
Securities and Exchange Commission (the “SEC”) adopted
new Rule 163B under the Securities Act of 1933, as amended (the
“Securities Act”), which permits oral and written
communications between prospective issuers and certain potential
investors prior to or following the filing of a registration
statement, to determine whether such potential
