On September 26, 2019, the Securities and Exchange Commission (SEC) adopted Rule 163B under the Securities Act of 1933 (Securities Act), which extends the use of “test-the-waters” communications (TTW communications) to all issuers, including fund issuers, as well as persons authorized to act on their behalf (including underwriters). Rule 163B expands the reach of the provisions originally established for emerging growth companies (EGCs) under the 2012 JOBS Act and permits oral or written communications with certain potential institutional investors, either prior to or following the filing of a registration statement, to determine whether those investors might have an interest in a contemplated registered securities offering. The permitted recipients of communications are investors that are, or are reasonably believed to be, qualified institutional buyers (QIBs) (as that term is defined in paragraph (a) of Rule 144A under the Securities Act) or institutional accredited investors (IAIs) (i.e., “accredited investors” as defined in Rule 501(a) of Regulation D under the Securities Act, other than natural persons).
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