IPO Process: Permitted Communications

Summary

This practice note covers permitted communications in an initial public offering (IPO). A company must ensure that its communications during an IPO comply with Section 5 (15 U.S.C. § 77e) of the Securities Act of 1933, as amended (Securities Act). Section 5 prohibits the offer of securities unless by means of a prospectus meeting the requirements of Section 10 (15 U.S.C. § 77j) of the Securities Act, and certain common communications (e.g., with customers, the media, and investors) may be deemed to be an offer. The U.S. Securities and Exchange Commission (SEC) provides safe harbors (with certain restrictions) for some communications in each of the three periods of the offering process: the pre-filing period (or quiet period), the waiting period, and the post-effective period. Whether a communication is permitted depends on a number of factors, including whether the communication is oral or written, whom it is disseminated to, and the stage or period of the offering process.