What’s New on the SEC’s new RegFlex Agenda?

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2019-06-12

Posted by Cydney Posner, Cooley LLP, on Wednesday, June 12, 2019
Editor's Note: Cydney S. Posner is special counsel at Cooley LLP. This post is based on a Cooley memorandum by Ms. Posner.

SEC Chair Jay Clayton has repeatedly made a point of his intent to take the Regulatory Flexibility Act Agenda “seriously,” streamlining it to show what the SEC actually expected to take up in the subsequent period. (Clayton has previously said that the short-term agenda signifies rulemakings that the SEC actually planned to pursue in the following twelve months. See this PubCo post and this PubCo post.) The SEC’s Spring 2019 short-term and long-term agendas have now been posted, reflecting the Chair’s priorities as of March 18, when the agenda was compiled. What stands out is not so much the matters that show up on the short-term agenda—although there are plenty of significant proposals to keep us all busy—but rather the legislatively mandated items that have taken up protracted residency on the long-term (i.e., the maybe never) agenda.

On the short-term agenda:

Extending the Testing the Waters Provision to Non-Emerging Growth Companies—Corp Fin is considering recommending that the SEC adopt amendments to extend the test-the-waters provision to non-emerging growth companies. These amendments were proposed in February and are now considered to be in the final rule stage. New Rule 163B would allow a company (and its authorized representatives, including underwriters) to engage in oral or written communications, either prior to or following the filing of a registration statement, with potential investors that are, or are reasonably believed to be, qualified institutional buyers (QIBs) or institutional accredited investors to determine whether they might be interested in the contemplated registered offering. The proposed new rule was designed to allow the company to gauge market interest in the deal before committing to the time-consuming prospectus drafting and SEC review process or incurring many of the costs associated with an offering. (See this PubCo post.)