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

Chapter 4 – Restrictions on publicity during securities offeringsNotwithstanding the prohibitions imposed by theSecurities Act during the quiet period, a foreign privateissuer may:• continue to advertise products and services and toissue press releases regarding factual business andfinancial developments in accordance with pastpractice (ordinary course advertising and pressactivity); 174• release a limited notice regarding the offering withinthe United States under Securities Act Rule 135; and• conduct certain press activities outside the UnitedStates under Securities Act Rule 135e.(a) Rule 135Rule 135 provides a safe harbour for publicannouncements of a planned registered offering duringthe quiet period if the announcement:• contains a legend to the effect that it does notconstitute an offer of any securities for sale; 175 and• contains only limited information, including: 176- the name of the issuer;- the title, amount and basic terms of thesecurities offered;- the anticipated timing of the offering; and- a brief statement of the manner and purpose ofthe offering, without naming the prospectiveunderwriters for the offering.(b) Rule 135eRule 135e provides a general safe harbour for offshorepress activity. Under Rule 135e, a foreign private issuerthat will not be conducting its offering solely in theUnited States – that is, which has a bona fide intent tomake an offering offshore in addition to the US offering– may hold press conferences or give interviews tojournalists (including US journalists) outside the UnitedStates at which the issuer discusses its intention toundertake a public offering. The issuer must provideaccess to both US and non-US journalists and ensurethat any written press releases or other press-relatedmaterials it uses meet the following requirements: 177• the materials must be distributed to journalists(including US journalists) outside the United States;and• the materials must contain a legend stating that:- they are not an offer of securities for sale in theUnited States;- securities may not be offered or sold in theUnited States absent registration or anexemption from registration;- any public offering in the United States may bemade only by means of a prospectus that maybe obtained from the issuer and that willcontain detailed information about the issuerand management, as well as financial statements;and- whether the issuer intends to register theoffering in the United States.These materials also must not include any purchaseorder or coupon that could be used to indicate interestin the proposed offering.Practice point:Although Rule 135e does not limit the content of offshorepress announcements, other restrictions of theUS federal securities laws – such as the anti-fraudprohibitions of Exchange Act Rule 10b-5 – continueto apply. Some caution is therefore warranted inrelying on the rule.www.iflr.comUS SECURITIES OFFERINGS: A GUIDE FOR NON-US ISSUERS27