Bipartisan congressional legislation introduced aimed at increasing IPO activity

On October 2, 2017, Congressmen Ted Budd (R-NC) and Gregory Meeks (D-NY) introduced a bipartisan bill, H.R. 3903, in the U.S. House of Representatives. The bill proposes amendments to the Securities Act of 1933, as amended, to increase initial public offering ("IPO") and follow-on activity. The proposed legislation extends three JOBS Act provisions currently available to emerging growth companies to all issuers: (1) submission of a draft registration statement for confidential nonpublic review by the SEC prior to the public filing of the IPO registration statement; (2) within the one-year period following an IPO, confidential submission of a draft registration statement for an offering; and (3) the ability to test-the-waters with institutional investors. The SEC's Division of Corporation Finance's policy changes earlier in the year already have addressed confidential submissions for IPOs as well as follow-on offerings undertaken within twelve months of an IPO; however, the bill would ostensibly extend the confidentiality provisions contained in Securities Act Section 6(e)(2) for these draft registration statements. Currently, those confidentiality provisions are available only for EGCs and confidential submissions made under the new SEC policy must be the subject of a Rule 83 confidential treatment request. Also, the bill would address the ability to test the waters, which was not addressed by the Division of Corporation Finance.

The text of the bill is available here.

For further information on this topic please contact David LIchtstein at Morrison & Foerster LLP by telephone (+1 212 468 8000) or email ([email protected]). The Morrison & Foerster LLP website can be accessed at www.mofo.com.