SEC's 'Test The Waters' Expansion Could Spur More Offerings

Law360 (October 11, 2019, 12:03 PM EDT) -- The U.S. Securities and Exchange Commission’s decision to allow all companies to pursue “testing-the-waters” communications with institutional investors before registering their offerings is welcomed by corporate attorneys, who say the policy could spur more deal-making, though investor groups are skeptical that the public will benefit from the rule change.

How much of an impact the new SEC’s policy will have remains unclear, given that law already allows many companies to “test the waters” — meaning they can initiate preliminary discussions with select investors to gauge market interest before or after filing their registration statement.

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