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The staff of the SEC’s Division of Corporation Finance issued a notice today stating that it has changed its policy regarding which foreign issuers may continue to submit initial registration statements on a non-public basis. Under the new policy, the staff will review initial registration statements of foreign issuers that are submitted on a non-public basis only where the registrant is:
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a foreign government registering its debt securities;
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a foreign private issuer that is listed or is concurrently listing its securities on a non-U.S. securities exchange;
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a foreign private issuer that is being privatized by a foreign government; or
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a foreign private issuer which can demonstrate that the public filing of an initial registration statement would conflict with the law of an applicable foreign jurisdiction.
The staff policy also noted that shell companies, blank-check companies and issuers with no, or substantially no business operations will not be permitted to use the non-public submission procedure. Finally, the staff reserved the right to request that a foreign issuer publicly file its registration statement when certain circumstances arise, even when the statement was originally submitted on a non-public basis based on the new policy. The possible circumstances cited by the staff for when it may override the policy included competing bids in an acquisition transaction and publicity about a proposed offering or listing.
It is important to note that this new policy takes effect immediately. The policy notes that non-public submissions that do not come within one of the above categories and that were received by the staff before December 8, 2011, will continue to be reviewed by staff without a public filing. However, the next draft of the registration statement, whether in response to comments issued by the staff or otherwise, must be filed publicly on the EDGAR system. We have confirmed with the staff that it intends to strictly enforce this view.
A copy of the new policy is available here.
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