Time and technology often conspire to make our existing views and approaches seem dated. It's inevitable, and such is the case with the regulations that address permissible communications by issuers. The securities laws regulating communications by issuers have not undergone many revisions since Securities Offering Reform in 2005 despite the fact that the ways in which issuers communicate with investors and in which investors access information have undergone significant change. The Securities and Exchange Commission (SEC, or the Commission) now is required to propose rules relating to the application of the communications safe harbors under Securities Act Rules 138 and 139 in relation to certain funds. The dialogue relating to measures that may promote capital formation, without sacrificing investor protections, has prompted the Commission to consider extending the ability to "test the waters," made available by the Jumpstart Our Business Startups (JOBS) Act to emerging growth companies (EGCs), to all companies. While the Commission certainly could limit its rulemaking to acting on these specific matters, it would seem an opportune time for the Commission to undertake a more comprehensive review of all of the communications safe harbors contained in the Securities Act.
Partner Anna Pinedo discusses some of the communications safe harbors that may benefit from amendment in a recently published PLI Current article.
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