By Douglas Gillison WASHINGTON (Reuters) -Wall Street’s top regulator on Thursday eased the way for companies to proceed with initial public offerings during the federal government’s shutdown, according to an announcement on its website. Companies are normally prevented from debuting on Wall Street during periods when Congress has not approved funding for government operations, because […]
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Wall Street regulator eases IPO path during government shutdown
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By Douglas Gillison
WASHINGTON (Reuters) -Wall Street’s top regulator on Thursday eased the way for companies to proceed with initial public offerings during the federal government’s shutdown, according to an announcement on its website.
Companies are normally prevented from debuting on Wall Street during periods when Congress has not approved funding for government operations, because officials are unable to review and approve registration statements. That has prompted investor concerns that partisan gridlock in Washington could dent the IPO market.
However, companies can allow their statements to become effective automatically, which involves setting their IPO pricing 20 days before the listing instead of finalizing it the night before after a U.S. Securities and Exchange Commission review.
In an announcement posted on its website on Thursday, the SEC said because officials were unavailable to review registration statements, the regulator would not seek to punish companies that omit pricing information from prospectuses filed during the shutdown and then go public either during the shutdown or afterwards.
An SEC spokesperson declined to comment.
In a client alert, law firm Davis Polk said the change had occurred following “discussions” the firm and others had held with the agency. The firm did not immediately respond to a request for comment on Thursday.
(Reporting by Douglas Gillison in Washington; Editing by Jamie Freed)