By Cydney Posner
Corp Fin has posted a statement announcing a change in its policy regarding the confidentiality of IPO registration statements filed by foreign private issuers. Until now, foreign private issuers and foreign governments have been able to submit to the staff IPO registration statements and amendments on a non-public basis, allowing the company and the staff to resolve all comments before the filing is made public. The reason given is that, historically, most foreign private issuers were also traded on foreign exchanges that typically did not require public disclosure before completion of the review process. More recently, however, most foreign private issuers are not also listing outside the United States. Accordingly, Corp Fin is changing its policy, beginning immediately, to limit the confidential review process to the following registrants: (1) a foreign government registering its debt securities; (2) a foreign private issuer that is listed or is concurrently listing its securities on a non-U.S. securities exchange; (3) a foreign private issuer that is being privatized by a foreign government; or (4) a foreign private issuer that can demonstrate that the public filing of an initial registration statement would conflict with the law of an applicable foreign jurisdiction. In addition, shell companies, blank check companies and issuers with no or substantially no business operations will not be permitted to use the non-public submission procedure. The Division also cautions that the staff could still request a foreign issuer to publicly file under some circumstances even though the company falls within the general parameters of the policy. (Examples given are when there is a competing bid in an acquisition transaction or publicity about a proposed offering or listing.) Ironically, S. 1933, just introduced in the Senate, proposes to extend the confidential IPO process to emerging growth companies. See my article of 12/1/11.