SEC Proposes to Amend Rule 163

The Securities and Exchange Commission has proposed amendments to Rule 163 under the Securities Act of 1933.  If adopted, the amended rule would facilitate the ability of large public companies to communicate with broader groups of potential investors.  Currently, Rule 163(c) of the Securities Act of 1933 allows only well-known seasoned issuers ("WKSIs") to correspond with prospective investors in advance of filing a registration statement.  The proposed amendments would liberalize the rule to allow WKSIs to authorize an underwriter or dealer to communicate with potential investors on their behalf about potential securities offerings before the WKSI files the related registration statement.  According to the proposal, liability would continue to rest with the issuer.  The goal of the proposed rule is to facilitate communications between WKSIs and potential investors. The proposal said that, “If adopted, the proposed amendments will enable WKSIs to better gauge the level of interest in the market for an offering and explore possible terms for such an offering before filing a registration statement.”  The other provisions of Rule 163 would remain unchanged.  For further information on the proposed rule, click here.