Clifford Chance

The SEC's evolving integration doctrine: New guidance on combining offering methods

4 January 2016

In 2015, in a trilogy of releases on early-stage capital-raising, the U.S. Securities and Exchange Commission (SEC) took bold steps to clarify its integration guidance. The result changes the textbook on how various securities-based offering methods can be combined. A long-required five-factor test that often blunted the concurrent use of different offering methods has now been replaced in many contexts with a unitary framework. This focuses on whether advertising and solicitation in one offering is improperly conditioning the market for another. In addition, updated integration safe harbors permit (or propose to permit) the serial use of different offering methods without risk that two such offerings might be deemed to be a single offering (integrated). This new guidance gives companies more flexibility than they had before to conduct concurrent and serial offerings using different methods within the U.S. menu of early-stage capital-raising options.

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