By Liz Dunshee
My colleague Broc Romanek – who, as a former staffer, is familiar with the Securities and Exchange Commission’s inner workings – blogged late last week on The Governance Beat about how the government shutdown could affect the SEC and public companies. Since a shutdown can delay capital-raising activities, it’s also a huge issue for anyone with a transaction on the horizon – especially private companies considering an initial public offering.
Even though the stock market stays open during a shutdown, and you can continue to submit filings on the SEC’s electronic site, companies that need the Commission to act on their registration statements or interpretive questions are up against a big logistical problem. That’s the case not just while the staff is furloughed, but also afterward, since they will be facing a backlog of submissions. As Broc pointed out in his blog, we don’t know how long a potential shutdown would last, or whether the SEC workforce would further shrink, causing longer-term processing delays.
The good news is that this isn’t our first rodeo. The Cooley team has helped companies work through other government shutdowns – and successful offerings are still possible. From handling complexities with filings and communications to understanding risks and contingency plans, this experience goes a long way.
Here are a few of the issues we can help with:
- Communicating with SEC staff before and after the shutdown.
- Understanding and monitoring affected SEC functions and deadlines.
- Analyzing whether a company could pursue an “emergency relief” exception.
- Timing and compliance issues for registration statement submissions, road shows, offering size and pricing.
- What can be done to keep your IPO on track during the shutdown, and how to use the timing to your advantage.
- How to approach acceleration requests and delaying amendments.
- Whether and how to supplement or amend existing filings.
- Addressing the interplay of Financial Industry Regulatory Authority-related issues with SEC operations.
- Considering unresolved SEC staff comments on filing reviews.
- Readiness for the resumption of normal government activity.
- Alternative capital-raising and exit opportunities.
- Employee and stockholder communications.
- Balancing liability risks and market opportunities.
- Perspectives on market reactions and investor sentiment.
If your company is conducting a public offering this year or early next year, contact a member of our Capital Markets team for real-time guidance on what the shutdown means for your specific situation and timing. We’re well-versed in the SEC’s operations plan and related FAQs – and we have deep experience in helping companies navigate shutdown-related challenges and keep their offerings on track.
