TheCorporateCounsel.net

As Dave has blogged, a SEC stop order under 1933 Act Section 8(d) is a rare bird – yet every law firm associate working on public offerings knows the seemingly pointless exercise of confirming that there are no stop orders on a registration statement being used for an offering. It seems so pointless because so few stop orders are issued. However, there occasionally is a stop order. In fact, there were 11 stop orders during 2015 and 8 during 2014, according to the SEC’s list. I bet those numbers are higher than most people would have guessed.

Given the SEC’s online list of stop orders, you might ask yourself whether it’s worth calling the Corp Fin Staff to confirm there isn’t a stop order for your offering that is about to go effective? In other words, can’t you merely rely on looking at the SEC’s online list rather than bothering the Staff? I suppose that depends partly on how quickly the SEC updates that list, something that I don’t know…

The Senate Banking Committee has announced that it will hold a hearing on the nominations of Lisa Fairfax and Hester Peirce to be SEC commissioners next Tuesday, March 15…

Stop Orders for Withdrawal Requests? You See Something New Once in a Blue Moon

As part of this job, I review the new stuff that the SEC posts each day. Occasionally, I spot things that are kinda strange. For example, I know the SEC sometimes needs a stop order to prevent a registration statement from going effective because they automatically go effective under the ’33 Act unless the registrant includes a “delaying amendment” under Rule 473. In other words, Section 8(a) of the ’33 Act provides that registration statements will become effective twenty days after the filing date automatically – and this will happen without the magic language of a delaying amendment being included in the registration statement.

Everyone filing a registration statement includes a delaying amendment – unless someone tries to pull a fast one. Corp Fin is pretty vigilant in looking for delaying amendment – when a Staffer screens registration statements to decide which level of review it will receive, that is the first thing they look for (and if it’s missing, you get a call and you need to file a pre-effective amendment immediately to add it). [Back in ’33 when the statute was enacted, there were far fewer registration statements and the SEC was able to process them within 20 days. In fact, the Commissioners themselves reviewed them – there was no Corp Fin.]

Anyways, I didn’t think the SEC needed a stop order to deny a withdrawal request. I thought Corp Fin could decide to just not act on a withdrawal request and that would effectively deny it. But then I came across this stop order for a withdrawal request. I can’t recall ever seeing one of those before. Rule 477 says a request for withdrawal is deemed granted after 15 calendar days unless the SEC notifies the registrant that the request won’t be granted, so I guess this is the context in which this comes up…

Speaking of arcane stuff, I’m always shocked by the high volume of FOIA requests that the SEC has to process each year. Here’s the latest tallies in this report. If I’m reading it correctly, over 16k requests were processed last year…

Poll: Checking for Stop Orders

Here’s a poll on your beliefs on checking for a stop order:

– Broc Romanek