Although Friday brought news of a funding deal and suggestions that the current shutdown isn’t *supposed to* continue past today or tomorrow, Corp Fin Staff posted pre-shutdown guidance late Friday afternoon. (The Staff has to wait for the green light from elsewhere in the government to be able to post that guidance.)
In terms of how this guidance compares to the last shutdown:
– It continues to reflect the helpful update Corp Fin released a week into the last shutdown regarding reliance on Rule 430A to omit your offering price when filing a registration statement that would become effective after 20 days pursuant to Section 8(a).
– It now addresses another pain point from the last shutdown relating to upsizing an offering using Rule 462(b). New Q&A 13 says:
Q: Can I rely on Rule 462(b) to file a registration statement that becomes effective upon filing to register additional securities of the same class(es) as were included in an earlier registration statement for the same offering if the earlier registration statement went effective by operation of law pursuant to Section 8(a) of the Securities Act?
A: Because the staff will not be available to review or accelerate the effectiveness of registration statements during the shutdown, as long as the other conditions of Rule 462(b) are met, we will not recommend enforcement action to the Commission if a company relies on Rule 462(b) when the earlier registration statement went effective by operation of law due to staff being unavailable to review or accelerate effectiveness during the shutdown.
– It also formalizes guidance that the Staff had informally shared earlier last week — that it was willing to accelerate registration statement effectiveness for IPO issuers that had cleared comments and flipped public but were still waiting for the 15 days to run if they requested effectiveness as of 4 pm ET or later on Friday, January 30, prior to the shutdown. New Q&A 8 reads:
Q: I originally submitted a draft registration statement for confidential review and subsequently filed the registration statement, and all non-public draft submissions, publicly. The 15-day waiting period referenced in Section 6(e)(1) of the Securities Act and the Division’s Enhanced Accommodations for Issuers Submitting Draft Registration Statements (March 3, 2025) will not expire prior to the shutdown. Will the Division consider an acceleration request?
A: Yes, if the company has publicly filed the registration statement and all non-public draft submissions, the Division will consider a request for acceleration as long as (1) there are no outstanding staff comments on the registration statement, (2) the company requests acceleration of effectiveness as of 4:00 p.m. or later on the final business day (Friday, January 30, 2026) prior to the shutdown, and (3) the company represents in its request for acceleration that it will not commence a road show or, in the absence of a road show, conduct any sales, until at least 15 days after it filed the registration statement publicly. A company considering this option should submit its acceleration request as soon as possible.
Hopefully, to the extent this was relevant to issuers, their counsel was in contact with the Staff before this guidance came out or was able to move quickly once it went live. While it seems this opportunity has expired, it’s something to keep in mind for the next shutdown. It’s also yet another example of Corp Fin Staff’s willingness to make reasonable accommodations so deals can get across the finish line despite shutdown roadblocks. (And evidence, more generally, of the Staff continuing to show its commitment to facilitating capital formation.)
* Senate Democrats and the White House reached an agreement late last week to fund most of the federal government until September 30 and fund the Department of Homeland Security for 2 weeks while discussions continue on immigration enforcement. Appropriations still lapsed as of 12:01 Saturday morning because the modified, Senate-approved spending package has to go back to the House, which is supposed to vote tonight or tomorrow. If it passes (it could go either way), it won’t be the shortest shutdown ever (which lasted a mere 6ish hours), but at least it will mean avoiding the challenges that come with the SEC being furloughed for weeks.
– Meredith Ervine
Last month, NYSE American filed a proposal with the SEC to amend its initial listing requirements (historically viewed as more flexible) to closely align with Nasdaq’s by adding a new minimum market value, focusing on unrestricted publicly held shares, and increasing the minimum listing price. This Morgan Lewis alert describes the changes. Here are two excerpts:
Under NYSE American’s proposal, each of the four initial listing standards in Section 101 would be amended to require a minimum market value of Unrestricted Publicly-Held shares at the $15 million level for standards 1, 2, and 3, and $20 million for standard 4. Any company listing in connection with an IPO or other underwritten public offering would be required to satisfy the Unrestricted Publicly-Held Shares requirement solely from offering proceeds. “Restricted Securities,” even if not held by insiders or 10% holders, would no longer count toward satisfaction of this requirement.
NYSE American’s proposal would also impose a uniform $4.00 minimum initial listing price across all initial listing standards. This represents an increase from current NYSE American requirements, which permit minimum initial listing prices of $2.00 or $3.00 per share depending on the applicable listing standard.
Once approved (the SEC hasn’t posted this proposal for notice & comment on its website yet), these changes will make it harder for companies to list on NYSE American, with broader implications for the market — and for the goal of getting more companies to go public.
Historically, issuers have chosen NYSE American in part because its initial listing standards offered greater flexibility than those of Nasdaq, particularly with respect to liquidity, public float composition, and the ability to rely on legacy or resale shares to satisfy listing requirements. Such flexibility has made NYSE American an attractive venue for smaller or earlier-stage companies, companies with significant insider or employee ownership, and issuers seeking to limit dilution by keeping primary offerings smaller at the time of listing.
The proposed changes would significantly narrow that flexibility. Employee equity and other outstanding shares would no longer support initial listing eligibility as shares issued under employee equity plans, shares subject to lockups, or other restricted securities would not count toward initial listing liquidity thresholds.
Issuers listing in connection with an IPO would need to size their offerings to independently satisfy the $15 million market value of unrestricted publicly held shares requirement, potentially requiring larger primary offerings and resulting in increased dilution. Further, by requiring liquidity thresholds to be met using only unrestricted publicly held shares, the proposal would reduce the ability of issuers to structure listings around resale or legacy float and further narrow the practical differences between NYSE American and Nasdaq with respect to initial listing liquidity standards.
With Nasdaq’s many proposals to tighten listing standards and purge the exchange of stocks that maybe shouldn’t be listed on an exchange anymore — or ever have been listed in the first place, it seems to be getting dicey out there for microcap companies. I understand why the exchanges are pursuing these updates, but there’s also the SEC’s goal of bringing back small-cap IPOs to think about.
– Meredith Ervine
On Friday, the SEC announced the appointments of Demetrios (Jim) Logothetis as Chairman and Mark Calabria, Kyle Hauptman, and Steven Laughton as Board members of the PCAOB. The SEC stated that George Botic will continue to serve as a Board member and will remain Acting Chairman until Mr. Logothetis is sworn in.
Demetrios (Jim) Logothetis serves on the board of The Republic Bank of Chicago and on the advisory council of a privately owned consultancy firm. He previously spent 40 years at E&Y.
Mark Calabria is currently an Associate Director and Chief Statistician with the U.S. Office of Management and Budget and a Senior Advisor to the Office of the Director of the Consumer Financial Protection Bureau.
Kyle Hauptman is currently the Chairman of the National Credit Union Administration. He previously served on the Senate Banking Committee staff, as a staff director and as Economic Policy Counselor to a senator.
Steven Laughton is currently Board Counsel to PCAOB Board Member Christina Ho. He spent more than thirty years with the U.S. Department of the Treasury, including as Senior Counsel to the General Counsel.
In Chairman Atkins’s statement, he thanked the current board members and noted that the transition to the new board will occur very quickly over the next few weeks.
– Meredith Ervine
