Securities offerings and listings in the US: an ... - Latham & Watkins

Chapter 2– The registration process• a report or other document submitted on Form 6-Kthat the issuer is required to furnish and make publicunder the laws of its home country or the issuer’shome country exchange, that (i) is not a press release,(ii) is not required to be and has not been distributedto the holders of the foreign private issuer’s securities,and (iii) if discussing a material event, has alreadybeen the subject of a Form 6-K filing or other SECfiling via EDGAR; 49 and• material submitted under Rule 12g3-2(b). 50As a general matter, all filings in EDGAR must be madein the English language. 51 Non-English documentsmust be fairly and accurately translated into English forfiling in accordance with the SEC’s rules on foreignlanguagedocuments, 52 including most documentssubmitted to the SEC under cover of Form 6-K. 53Alternatively, a summary of certain documents filedwith the SEC as exhibits may be provided, 54 althoughthe SEC’s rules require specified significant documents(for example, articles of incorporation, instrumentsdefining the rights of security holders and contracts onwhich an issuer’s business is substantially dependent) tobe provided in full translation. 55 Similarly, certaindocuments provided to the SEC on Form 6-K may beprovided in English summary, including a reportrequired to be furnished and made public under the lawsof the issuer’s home country or the rules of the issuer’shome country stock exchange, as long as it is not a pressrelease and is not required to be and has not beendistributed to the issuer’s security holders. 56 Anypermitted summary must fairly and accuratelysummarize the terms of each material provision of theoriginal text and fairly and accurately describe the termsthat have been omitted or abridged. 57NASD reviewUnderwritten public offerings in the United States are,in most cases, subject to the review and approval of theNational Association of Securities Dealers, Inc. (theNASD), a self-regulatory organization that, amongother things, monitors the terms of public offeringsunderwritten by US investment banks. The NASDreview will primarily focus on any pre-existingrelationships between the underwriters and the issuerand whether the underwriters’ proposed compensationis fair and not excessive (from the issuer’s perspective).The NASD compensation review will look at theunderwriting commission to be paid in connection withthe offering as well as any other compensation receivedby the underwriters from the issuer and any of itsaffiliates in any capacity. The NASD will also reviewthe terms of any securities transactions (includingpurchases of equity and warrants) between theunderwriters and their affiliates and the issuer and itsaffiliates. The SEC will not declare a registrationstatement effective until the NASD has formally clearedthe underwriting arrangements.NYSE and Nasdaq listingrequirementsIn order to be eligible for listing on the NYSE or forquotation on Nasdaq, a foreign private issuer must meetcertain quantitative listing requirements and corporategovernance standards. Once listed, foreign privateissuers must meet certain requirements relating toongoing shareholder communication and disclosure.We summarize the quantitative NYSE and Nasdaqlisting criteria in Annex B below.NYSE and Nasdaq have proposed wide-rangingchanges in corporate governance requirements for listedcompanies (certain of which have been approved by theSEC) in response to recent corporate scandals andSarbanes-Oxley. The proposals include, among otherthings, heightened requirements of independence forboard and audit committee members and enhancedaudit committee powers and functions. However, boththe NYSE and Nasdaq have provided foreign privateissuers with certain exemptions to the proposedrequirements, to the extent consistent with Sarbanes-Oxley’s requirements:• Under the NYSE proposals, foreign private issuersmay follow home-country practice in lieu of certainof the new corporate governance requirements, butmust publicly disclose any significant ways in whichwww.iflr.comUS SECURITIES OFFERINGS: A GUIDE FOR NON-US ISSUERS13