SEC Expands "Testing the Waters" Communications

On September 26, the SEC announced a welcome, broad expansion of “testing the waters” flexibility for all companies. Under new Rule 163B, all companies, and persons authorized to act on their behalf (such as underwriters), will be able to gauge market interest in a possible offering with qualified institutional buyers and institutional accredited investors prior to or after the filing of a registration statement. The new rule is welcome relief for all non-emerging growth companies and for companies without a registration statement on file.