In this Lexis Practice Advisor Practice Note, we discuss new Rule 163B adopted by the US Securities and Exchange Commission (SEC). On September 26, 2019, the SEC extended the ability to test the waters to all issuers by adopting the highly anticipated new Rule 163B under the Securities Act of 1933, as amended (the Securities Act). The new rule allows any issuer, or any person acting on the issuer’s behalf, to engage in test the waters communications with potential investors that are reasonably believed to be institutional accredited investors or qualified institutional buyers, either prior to or following the date of filing of a registration statement relating to the offering, without violating the Securities Act’s “gun jumping” rules. Prior to Rule 163B, the ability to test the waters was limited to emerging growth companies only.

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