|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
New SEC Rules May Boost Block Trades But Streamlining Of Deal Process Could Prove Two-Edged Sword On Several Fronts
Staff Writer – Investment Dealers' Digest
Securities Mosaic. November 28, 2005
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EXCERPT: New Securities and Exchange Commission rules slated to take effect on Dec. 1 should allow companies easier access to the capital markets, and may lead to an uptick in equity deals in December, especially in "quick to market" or block trades, some top underwriters believe. However, a rise in quick-turnaround transactions could prove a double-edged sword and wind up shrinking the underwriter fee pool. Unveiled several months ago, the new rules incorporate SEC-mandated changes to the Securities Act of 1933 aimed at eliminating unnecessary and "outmoded" restrictions on offerings, as well as changes for integrating disclosure under the Securities Exchange Act of 1934. One of the most noticeable changes assigns issuers to one of four different categories, which, in many cases, loosens restrictions on what can be communicated to investors during the capital-raising process. For example, well-known seasoned issuers, or WKSIs-pronounced "wick-sees" in market parlance-is a new category in which issuers' registration statements won't be reviewed by the SEC before their offerings are executed. A WKSI is defined as a corporation that either has a market valuation of $700 million or has issued over the past three years at least $1 billion in nonconvertible securities, other than common equity, in primary offerings. Obviously, judging by the statutes in place, WKSI-designated issuers will not be smaller, growth-oriented types of companies. And that means not every market constituent is impressed. "Certainly, I think it's a good turn for issuers and investment banks, generally speaking," said James Satloff, CEO of CE Unterberg Towbin, a New York City-based boutique investment bank. "However, for smaller growth companies, [these new rules] don't really help them with the cost burden of accessing the equity markets." |
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