SEC Updates Securities Act Forms Guidance

The Division of Corporation Finance updated its Securities Act Forms document on February 27, covering a wide-range of topics. The 61 pages included questions and answers of general applicability as well as interpretive responses regarding particular situations.

Requests for a waiver from the form eligibility requirements are granted only under very limited circumstances and are handled by the Division of Corporation Finance’s office of chief counsel. Graphic presentations are permitted in the prospectus, and the staff refers registrants to Rule 304 of Regulation S-T for more information. According to the staff, graphic presentations should not be limited to only the most favorable aspects of the business, and also should not include testimonials that are out of context or identify specific customers who are not representative of the registrant’s overall customer base. The text accompanying the graphics needs to be in plain English and not in technical jargon unfamiliar to the average investor.

If a company appoints a new principal financial officer immediately after filing a 1933 Act registration statement, that new officer must sign any amendments to the registration statement, according to staff.

The guidance covers F forms generally, with specifics on F-1, F-6, F-7, F-8, F-9, F-10 and F-80. The staff discussed the requirement that an authorized U.S. representative sign an F-series registration statement, and who qualifies. 1933 Act. Release No. 6360 (November 20, 1981) provides details, and the staff added that the Commission generally has refused to accept the appointment of a newly formed or shell corporation in the U.S. as the authorized representative. In the case of dual governing boards, it may be necessary to get the signature of members of both. The staff provided specific language that Canadian issuers may substitute for the current language in Item 2 of Forms F-7, F-8, F-9 and F-80, and Item 3 of Form F-10. Foreign issuers may register with the Commission only the portion of a worldwide equity or debt offering so long as the registration includes the securities sold in the U.S. and any possible flow-back of securities into the U.S.

For Form F-1, an issuer may use a United Kingdom or other foreign style document as a prospectus in the U.S., as long as the information required under the Commission’s rules is included. Some modifications may be needed to reflect the Commission’s plain English requirements. A foreign issuer making a U.S. equity initial public offering and that has an existing trading market for its equity securities outside the U.S. generally does not have to include a risk factor addressing possible illiquidity of the securities in the U.S.

Form S-1 topics include post-effective amendments, continuous offerings and EDGAR links. The new document also provides information on the use of Form S-1 by limited partnerships. For Form S-3, issuers must evaluate their eligibility to use that form at the time of a Form 10-K filing. Other S-3 topics include automatic shelf registration and the succession of a domestic company to a foreign company’s reporting requirements.

Form S-4 topics include annual shareholder reports, post-merger issuances of securities and proxy statements. Form S-8 issues include options, stock appreciation rights, Rule 405 and the definition of employee, acquisitions, 401(k) plans and incorporation by reference of Form 10-K information. For acquisitions, instruction F to Form S-4, which allows a U.S. acquirer to include Form F-4 type financial disclosure with respect to a target that is a foreign private issuer, is not applicable to the domestication of a non-U.S. entity as a Delaware corporation pursuant to Delaware General Corporation Law Section 388. Regarding the incorporation by reference of Form 10-K information, if a registrant incorporates financial statements from different years that were done by different accounting firms, then the consent of all the accounting firms is required by Rule 436 for purposes of the Form S-8 registration statement.

Form D information includes multiple issuers, such as master and feeder funds, minimum investments, commissions and fees and foreign currency translations. For Form 144, the de minimus exemption of Rule 144(h) is discussed in regard to each individual seller, the waiting period between an order and the time the broker executes the order and a change in broker.