U.S. watchdog proposes 'testing waters' before all public offerings
(Adds missing word "all" to headline)
By Katanga Johnson
WASHINGTON, Feb 19 (Reuters) - The U.S. Securities and
Exchange Commission proposed on Tuesday to expand a rule that
allows companies to sound out prospective investors privately
before going public.
The move forms part of a broader push by SEC Chairman Jay
Clayton to make it easier for companies to go public by relaxing
rules, amid worries that a 50 percent decline in U.S. listings
over the past two decades is hurting investors.
The so-called "testing-the-waters" proposal, currently
restricted to smaller firms preparing to go public, would be
extended to all prospective issuers hoping to gauge broader
market interest before filing registration statements for
initial public offerings, the SEC said.
Clayton said in a statement that the proposal, which is
subject to consultation and a final vote by the agency's
commissioners, would help companies to identify information that
is important to investors in advance of a public offering.
Clayton has floated other proposed changes to make life
easier for public companies, including overhauling rules
governing shareholder voting.
Tuesday's proposal would expand a provision first introduced
by the 2012 Jumpstart Our Business Startups Act, which currently
applies only to small growth companies.
"This will benefit issuers as it provides a realistic window
into the level of investor interest in an IPO, as well as more
accurately priced IPOs. Currently, the process is somewhat
opaque," said Dina Ellis Rochkind, a lawyer with Paul Hastings
LLP who helped draft the JOBS Act when she worked on Capitol
"Expanding these provisions to all potential issuers is
another step in the right direction."
(Reporting by Katanga Johnson;
Editing by Michelle Price, Susan Thomas and Dan Grebler)
First Published: 2019-02-19 23:30:35
Updated 2019-02-19 23:58:58
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