On March 15, 2010, the staff of the Division of Corporation Finance issued Staff Legal Bulletin No. 18 (SLB 18), which describes the Division’s views regarding when issuers that have abandoned an initial public offering or have been acquired can use Rule 12h-3 under the Exchange Act to suspend their reporting obligations under Section 15(d) of the Exchange Act. In the following two situations, the Division has repeatedly expressed the view in no-action letters that Rule 12h-3(c) does not preclude an issuer from filing a Form 15 to suspend its Section 15(d) reporting obligation with respect to a class of securities, even though a Securities Act registration statement relating to that class became effective or was required to be updated by Section 10(a)(3) during the time period specified in Rule 12h-3(c).
- Abandoned Initial Public Offering: An issuer with no Exchange Act reporting obligations has a Securities Act registration statement become effective, but does not sell any securities pursuant to the registration statement. The issuer files an application to withdraw the registration statement pursuant to Securities Act Rule 477, and the staff consents to the withdrawal.
- Acquired Issuer: An issuer has been acquired by another entity, resulting in the class or classes of securities for which the issuer has a Section 15(d) reporting obligation being either: (1) extinguished; or (2) held or assumed by only one recordholder, the acquiring entity.
An issuer who meets the following conditions in SLB 18 will no longer need to seek no-action relief in these situations before filing a Form 15 to suspend its Section 15(d) reporting obligation in reliance on Rule 12h-3:
- The issuer must not have a class of securities registered under Section 12 of the Exchange Act.
- The issuer must comply with the other requirements of Rule 12h-3 (i.e., less than 300 stockholders of record and file Form 15).
- The issuer must deregister any unsold securities from Securities Act registration statements and withdraw any registration statements if there were no sales.
- The issuer must not otherwise file Exchange Act reports during the time period in which it seeks to avail itself of the suspension provided by Rule 12h-3.