The Ins And Outs Of SEC's Expanded 'Test The Waters' Rule

Law360 (October 7, 2019, 3:50 PM EDT) -- On Sept. 25, the U.S. Securities and Exchange Commission adopted new Rule 163B under 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 investors might have an interest in a contemplated registered securities offering.

Historically, the gun-jumping provisions of Section 5 of the Securities Act restricted oral and written communications with investors prior to the filing of a registration statement. In 2012, Congress passed the Jumpstart Our Business Startups Act, which, pursuant to Section 5(d) of the Securities Act,...

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