SEC Facilitates Smaller Company Access to Capital Markets
The US Securities and Exchange Commission has this week unanimously approved changes
that will give smaller companies faster and easier access to capital when they
need it, or market conditions are favorable.
Specifically, the Commission adopted amendments to the eligibility requirements
of Form S-3 and Form F-3 of the Securities Act, to allow companies that do not
meet the current public float requirements of the forms to nevertheless register
primary offerings of their securities, subject to certain restrictions, including
the amount of securities those companies may sell pursuant to the expanded eligibility
standard in any one-year period. These changes to Forms S-3 and F-3 are intended to allow a larger number of
public companies to benefit from the greater flexibility and efficiency in accessing
the public securities markets afforded by Forms S-3 and F-3, in a manner that
is consistent with investor protection. "By extending the benefits of the Form S-3 and F-3 streamlined registration
statements to approximately 1,400 smaller reporting companies, the Commission
has significantly enhanced the ease and efficiency with which these companies
can access the public securities markets," explained John White, Director
of the SEC's Division of Corporation Finance. The amendments to Forms S-3 and F-3 will allow companies with less than $75
million in public float to register primary offerings of their securities on
these forms, provided they meet the other registrant eligibility conditions
for the use of the respective form; are not shell companies and have not been
shell companies for at least 12 calendar months before filing the registration
statement; have a class of common equity securities listed and registered on
a national securities exchange; and do not sell more than the equivalent of
one-third of their public float in primary offerings pursuant to the new instructions
in any period of 12 calendar months. The effective date for these amendments will be 30 days after their publication
in the Federal Register. In a separate action the Commission voted unanimously to adopt provisions that
will mandate electronic filing of Form D information after a phase-in period,
during which electronic filing will be voluntary. "The Commission's launch of online filing of Form D is a very positive
development," said John White, Director of the SEC's Division of Corporation
Finance. "We hope that this will eventually facilitate one-stop filing
of both federal and state Form D notices and substantially reduce filing burdens
of smaller companies." The phase-in period for Form D electronic filing will begin on Sept. 15, 2008.
Electronic filing will become mandatory on March 16, 2009.
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