Statement Summary
The Securities and Exchange Commission (SEC) has published a concept release seeking public comments on the definition of ‘foreign private issuer’. This category allows foreign companies to access U.S. markets with certain regulatory accommodations. Given the changes in foreign private issuers since 2003, the SEC is exploring whether to amend this definition.
SEC Chairman Paul S. Atkins stressed the importance of attracting foreign companies while ensuring that U.S. investors receive essential information and that domestic companies are not disadvantaged. The concept release invites input on the definition’s current state and assesses potential regulatory impacts. The public can contribute comments for 90 days after the official publication in the Federal Register.
Original Statement
The Securities and Exchange Commission today published a concept release soliciting public comment on the definition of foreign private issuer. Foreign private issuers benefit from certain accommodations and exemptions from the disclosure and filing requirements of the federal securities laws. The concept release solicits public input on whether the definition of foreign private issuer should be amended in light of significant changes in the population of foreign private issuers since 2003.
“Attracting foreign companies to U.S. markets and providing U.S. investors with the opportunity to trade in those companies under U.S. laws and regulations remains an objective. That objective must be balanced with other considerations, including providing investors with material information about these foreign companies, and ensuring that domestic companies are not competitively disadvantaged with respect to regulatory requirements.”
“The first step in striking this balance is to determine which foreign companies should qualify as foreign private issuers and be able to avail themselves to the accommodations that go with that status.” SEC concept releases are a means for the Commission to obtain public input in advance of making decisions about possible rulemaking. Concept releases typically outline a topic of concern, identify different potential approaches, and raise a series of questions for public commenters.
In this concept release, the Commission welcomes comments on the current foreign private issuer definition as well as on the costs, burdens, or benefits that may result from possible regulatory responses. The public comment period will remain open for 90 days following publication of the comment request in the Federal Register.
