TheCorporateCounsel.net

Yesterday, the Office of Chief Counsel in the SEC’s Division of Corporation Finance issued a no-action letter to Sumisho Air Lease Corporation, revisiting the Lamar Advertising no-action letter from 30 years ago by addressing the Form S-3 eligibility of a company that was subject to reporting requirements of Exchange Act Section 15(d), but had its Section 15(d) obligation suspended for a brief period of three months, thereby making the issuer not “subject to” the reporting requirements of Exchange Act Section 13(a) or 15(d) for a portion of the 12-month period specified in General Instruction I.A.3 of Form S-3. In its response, the Staff notes:

Based on the facts and representations in your letter, the Division will not object if Sumisho Air Lease Corporation (the “Company”) determines that its Exchange Act reporting complies with General Instruction I.A.3 of Form S-3, notwithstanding that it may not have been “subject to” the reporting requirements of Exchange Act Section 13(a) or 15(d) for a portion of the 12-month period specified in the instruction. In reaching this position, we note in particular your representation that, during the Voluntary Reporting Period (as defined in your letter), the Company will file all Exchange Act reports that otherwise would be required to be filed pursuant to Exchange Act Section 15(d).

In Lamar Advertising, the Staff had previously addressed Form S-3 eligibility where an issuer maintained a continuous Exchange Act reporting record, but was not subject to mandatory reporting for a portion of the preceding twelve months, in the circumstances where: (i) the Section 15(d) suspension arose automatically by operation of Section 15(d), not through any affirmative act by the issuer; (ii) no Form 15 was filed; (iii) the issuer was contractually obligated throughout the voluntary reporting period to file all Exchange Act reports that would otherwise have been required under Section 15(d), and in fact filed those reports; and (iv) upon the effectiveness of its IPO registration statement and its concurrent Section 12(g) registration, the issuer once again became subject to the requirements of Section 13(a) or 15(d) and timely filed all required reports. In its no-action request, Sumisho Air Lease Corporation argued that it’s circumstances were substantially similar to the facts and circumstances identified in Lamar Advertising.

Concurrent with the issuance of the no-action letter, the Staff revised Securities Act Forms Corporation Finance Interpretations Question 115.05 to clarify the Staff’s position and reference the Sumisho Air Lease Corporation no-action letter.

– Dave Lynn