2012 Procedures

Vol. 19, No. 3 • March 2012

Investment Company Act Status of Non-U.S. Issuers

Updated Commentary on Book-Entry Deposit Procedures under Section 3(c)(7) of the Investment Company Act

By Barry P. Barbash, John E. Baumgardner, Jr., Robin M. Bergen, William G. Farrar, Maria R. Gattuso and Nathan J. Greene, et al

focused on issuers for which earlier versions of the group’s published procedures were of limited applicability. This is

Nathan Greene chaired the authors’ committee for this article. Mr. Greene wishes to thank all the contributors. Mr. Greene and Mr. Schreiber are partners and Mr. Kanach is a counsel at Shearman & Sterling LLP; Ms. Bergen and Mr. Lincer are partners at Cleary Gottlieb Steen & Hamilton LLP; Ms. Jordan, Mr. Rowland and Mr. Townley are partners at Davis Polk & Wardwell; Mr. Kaplowitz, Mr. MacKinnon and Mr. Miller are partners at Sidley Austin LLP; Mr. Baumgardner and Mr. Farrar are partners at Sullivan & Cromwell LLP; Mr. Barbash, Ms. Gattuso and Ms. Neale are partners at Willkie Farr & Gallagher LLP.

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his group’s “2008 procedures” were designed to help certain non-US issuers relying on the Section 3(c)(7) exception under the Investment Company Act of 1940, as amended (Investment Company Act) to access the US capital markets more efficiently, and were especially

particularly important for those nonUS funds

and non-US inadvertent investment companies1 that have equity securities that are publicly traded and listed on securities exchanges outside the United States and that wish to include institutional US investors when conducting offerings of equity securities. The updated commentary below takes into account market experience with the procedures since

their publication and reflects our belief that any approach to these types of offerings should balance both the market benefits of a widely recognized procedural framework and commercial flexibility to tailor specific aspects of the framework to the higher or lower legal risks presented by...