SEC Staff Signals Limited Pre-Shutdown Accommodation for Certain IPO Issuers

In anticipation of a potential federal government shutdown, companies preparing for initial public offerings should be aware of a time-sensitive accommodation that has been informally communicated by the staff of the Securities and Exchange Commission’s Division of Corporation Finance, as reported in market publications and law firm alerts..

During the narrow pre-shutdown window of Thursday and Friday, January 29 and 30, the Division of Corporation Finance has informally indicated that it will consider accelerating the effectiveness of registration statements for eligible IPO issuers that have already cleared SEC comments and have publicly filed their registration statements, but have not yet completed the customary fifteen-day waiting period.

This accommodation was not available during the most recent government shutdown and is limited in scope and duration.

Eligibility Criteria

To qualify for this accommodation, all of the following conditions must be satisfied:

• The issuer’s registration statement must have fully cleared SEC staff comments.

• The issuer must have converted its confidential registration statement to a public filing on or after January 16, such that the standard fifteen-day waiting period would not otherwise expire before the shutdown begins.

• The issuer must request effectiveness on the eve of the shutdown, such as, late in the afternoon on Friday, January 30. Issuers cannot request effectiveness on Thursday, January 29 under this accommodation.

• The issuer must submit an undertaking to the SEC staff via EDGAR correspondence confirming that it will not commence its road show until fifteen days after the public filing date, notwithstanding the accelerated effectiveness.

Planning Considerations

As observed during prior shutdowns, a lapse in government funding does not automatically foreclose access to the capital markets. IPOs and other offerings may still proceed under limited circumstances, making advance planning critical.

Issuers that publicly filed their registration statements before January 16 and had planned to request effectiveness after January 30 may wish to reassess their timing in light of this accommodation and consider accelerating effectiveness before a shutdown occurs.

For questions regarding this accommodation or IPO planning in advance of a potential government shutdown, our team is ready to assist.

Authors: Nick L. Torres, Esq. and Weiwei Lu

Contact Person: Nick L. Torres, Esq. and Zhiqi Zheng, Esq.