SEC Division of Corporate Finance Issues Revised Statement on Well-Known Seasoned Issuer Waivers

The SEC's Division of Corporate Finance (the "Division") issued a revised statement updating its policy on granting waivers of ineligible issuer status for issuers seeking to qualify as well-known seasoned issuers ("WKSIs") under Securities Act Rule 405. In the absence of a waiver, an "ineligible issuer," as defined in Rule 405 of the Securities Act, is not able to qualify as a WKSI. The Division's procedure in determining whether to grant a waiver is to consider how the misconduct that gave rise to the ineligible issuer status relates to the reliability of the issuer's current and future disclosure, and whether the issuer has taken steps to remediate any deficiencies. The Division stated that it would focus on: (i) the duration of, and who was responsible for, the misconduct; (ii) whether remedial steps were taken, and (iii) the impact on the issuer if the waiver request were to be denied. The Division noted that, where criminal convictions or scienter-based violations gave rise to the ineligibility, the issuer's burden to show good cause that a waiver is justified is significantly greater.

See: SEC Statement.