SEC Proposes Securities Act Reform

Originally published October 28, 2004

On October 26, 2004, the Securities and Exchange Commission voted to propose modifications to the securities registration and offering processes under the Securities Act of 1933. The proposals will address communications related to registered securities offerings, facilitate delivery of information to investors and make other changes in procedures in the offering and capital formation process. This SEC initiative is aimed at modernizing the current restrictions on communications during the offering process. For example, under the current "gun-jumping rules," issuers and underwriters of securities in public offerings can face significant liability and regulatory delay if they, among other things, distribute, or participate in the distribution of, written information other than a customary prospectus prior to the effectiveness of the related registration statement. Accordingly, this initiative promises to be critically important to any company