|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
To Market, To Market Practice Focus As SEC Steps Back, New Pressure Falls On Private Counsel For Offerings
Staff Writer – Legal Times
Securities Mosaic. November 21, 2005
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EXCERPT: A quiet revolution has been taking place in the regulation of registered securities offerings. Since the 1980s, the Securities and Exchange Commission has implemented many far-reaching changes that have diminished the role of the SEC and increased the role of securities lawyers as the gatekeepers to the capital markets. In the late 1990s, the SEC, in a release nicknamed the "Aircraft Carrier" because of the breadth of its proposed changes and its size, embarked on one of the most significant proposed reforms to the offering process since 1933. These reforms would have greatly accelerated that shift in the traditional roles played by the SEC and securities lawyers. But the reforms were so momentous that the Aircraft Carrier sunk under its own weight. Last November, the SEC tried again and was able to adopt rules to liberalize the offering process this past July. These rules, contained in a 400-plus-page release titled "Securities Offering Reform," are built on the current system and implement some of the more workable aspects of the Aircraft Carrier. Yet they still continue the quiet revolution in the regulation of registered offerings. The Securities Offering Reform streamlines the offering process by eliminating unnecessary procedural hurdles. It facilitates communications between investors, issuers, underwriters, and other participants; removes the possibility of certain issuers undergoing SEC review (and, thus, permits these issuers to access the capital markets in a more timely manner); and reduces incentives to raise capital through exempt offerings. It also clarifies how liability provisions operate in registered offerings. The reform becomes effective next week, on Dec. 1. The big question for securities lawyers is how the reform will change the way they do deals. The most significant change is that securities lawyers will have greater control over the speed at which an offering comes to the market. With the removal of the SEC from the offering process, due diligence investigations conducted by private counsel will be the only regulatory hurdle that companies and underwriters will have to clear in issuing securities. |
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