The Securities and Exchange Commission (SEC) is considering permitting private companies of all sizes to confidentially “test the waters” with potential investors before embarking on the initial public offering (IPO) process, according to The Wall Street Journal (link).
This is not a surprise given the other signs that the SEC appears to be trying to level the procedural playing field among companies using different forms of registration.
For example, the SEC announced last June that it permits companies of all sizes to use confidential filing, not just those companies which are subject to the new JOBS Act rules (Click to read article).
Boustead has found, in conversations with the SEC about specific offerings, that the SEC is attuned to the advantages afforded companies using the new forms of registration.
“While the rules are still the rules, we’ve seen an effort by the SEC to work with our clients to reduce some of the differences between forms of SEC registration, where possible.” said Keith Moore, CEO and Founder of Boustead Securities, LLC. a broker-dealer working with clients using Reg A+ and traditional forms of SEC registration.
Given this trend, the rules currently available to companies using the new JOBS Act rules, such as Regulation A, dubbed Reg A+, may eventually be afforded to companies using other forms of SEC registration.
Until then, a private company contemplating an IPO should at least consider using Reg A+ among its options.
For more on Boustead’s experience using Reg A+ for IPOs, click here.