As part of the SEC’s broader “Make IPOs Great Again” agenda to modernize the U.S. capital markets and facilitate capital formation, the Commission recently proposed sweeping reforms to the registered offering framework. Simpson Thacher has submitted a comment letter in response to the proposal, offering recommendations to ensure the reforms appropriately address the unique characteristics of registered funds, business development companies (BDCs) and real estate investment trusts (REITs), while preserving strong investor protections. The proposed rules would, among other things, preempt state securities law registration and qualification requirements for all offerings registered under the Securities Act of 1933, as amended, revise Form S-3 eligibility requirements and modify the registration and offering process significantly for issuers with a class of equity securities listed on a national securities exchange.
The comment letter strongly supports the proposed state preemption and urges the SEC to extend short-form shelf registration eligibility and the streamlined registration benefits to all affected funds, regardless of exchange-listing status. The comment letter also recommends that the SEC preserve the existing debt threshold pathways available to qualify for the streamlined registration—including Short-Form N-2 and the Enhanced Registration and Communication Benefits currently available to WKSIs—or that the SEC otherwise propose rules that would permit those that already qualify and would lose these benefits under the proposed rules to retain those benefits. The letter advocates for parity between affected funds and operating companies in the registered offering process, consistent with congressional directives and also takes the opportunity to recommend that the SEC expand and permit confidential submissions of Form N-2 and Form N-14 registration statements.
The Simpson Thacher team responsible for preparing the comment letter includes Partners Rajib Chanda, Benjamin Wells, Kenneth Burdon, Steven Grigoriou and Jonathan Pacheco and Associates Justin Adamson, Joseph Goldman, Sally Nicholas and Menachem Shmalo (Registered Funds); Partners Edgar Lewandowski and Lesley Peng (Capital Markets) also provided invaluable assistance.
To read the full letter, please click here.