SEC Proposes to Expand “Test-the-Waters” Modernization Reform to All Issuers

The Securities and Exchange Commission voted to propose an expansion of a popular modernization reform that would permit investor views about potential offerings to be taken into account at an earlier stage in the process than is the case today. The new rule and related amendments would expand the "test-the-waters" accommodation—currently available to emerging growth companies or "EGCs"—to all issuers, including investment company issuers. This proposal would allow all prospective issuers, not just EGCs, to gauge market interest in a possible initial public offering or other proposed registered securities offering by permitting discussions with certain investors prior to the filing of a registration statement.