Periodic Reporting for Foreign Issuers – Going Public Lawyers

Periodic Reporting for Foreign Issuers
A foreign private issuer seeking to go public  in the U.S. can file a registration statement covering a public offering of securities under the Securities Act of 1933, as amended (“Securities Act”), register a class of equity securities under the Securities Exchange Act or it may do both.  Foreign issuers can conduct direct public offerings or an initial public offering by filing a registration statement under the Securities Act. A Securities Act registration statement contains a prospectus, along with other information required by the securities laws. Under both the Securities Act and the Exchange Act, a registration statement filed by a foreign issuer must be declared effective by the SEC.

Foreign private issuers use the “F” series registration statements and Form 20-F and Form 6-K reports for their annual and current reports. The SEC disclosure forms available to foreign issuers are designed with reference to international disclosure standards, both in scope and timing requirements for filing.

Most foreign private issuers elect to use these forms instead of the forms available to U.S. issuers. Foreign issuers can voluntarily choose to register and report using the same forms as U.S. issuers (e.g. Form S-1, Form S-4 and Form S-8 registration statements and Forms 10-K, 10-Q, and 8-K). If they do so they must comply with the earlier filing deadline of Form 10-K, file Form 10-Q quarterly reports, and file Form 8-K current reports.

Form 20-F is the primary disclosure document for foreign issuers under both the Securities Act and the Exchange Act. Form 20-F is most often filed as an annual report under the Exchange Act. Form 20-F can also be used to register classes of securities under the Exchange Act.  Securities Act registration statement forms cross-references the disclosure requirements of Form 20-F.

The disclosure requirements of Form 20-F are, in a large part, very similar to those required of domestic issuers. There are significant differences between financial statement and executive compensation disclosures for U.S. issuers and foreign private issuers including:

  • Foreign private issuers may provide financial statements prepared in accordance with U.S. GAAP, IFRS as issued by the IASB, or home country accounting standards that comprise a comprehensive basis of accounting. If a foreign private issuer prepares financial statements pursuant to its home jurisdiction accounting requirements or non-IASB IFRS, it must also provide a reconciliation to U.S. GAAP. The reconciliation must consist of a discussion and quantification of the material differences between the financial statements presented and the requirements of U.S. GAAP.
  • Foreign private issuers are permitted to disclose executive compensation on an aggregate basis and are not required to provide a Compensation Discussion & Analysis, as it is required for U.S. companies. To the extent a foreign private issuer provides more extensive executive compensation disclosures in accordance with the requirements of its home jurisdiction or voluntarily, such information must also be disclosed under Form 20-F.

After a foreign private issuer has completed a going public transaction that included an offering registered under the Securities Act or registered as a class of securities under the Exchange Act, it is required to file periodic reports with the SEC on an ongoing basis. In a broad outline, these reporting obligations are as follows:

Annual Reports — foreign private issuers file annual reports on Form 20-F. Foreign private issuers are required to file Form 20-F within four months of the end of the fiscal year.

Foreign private issuers can comply with their other reporting obligations under the Exchange Act by filing reports on Form 6-K. Unlike domestic issuers, foreign issuers are not required to file quarterly reports. Foreign private issuers must disclose on Form 6-K the material information that the foreign private issuer (i) makes or is required to make public pursuant to the law of its domicile, incorporation, or organization, (ii) files or is required to file with a stock exchange on which its securities are traded and which was made public by that exchange, or (iii) distributes or is required to distribute to its security holders. Form 6-K refers to general areas of disclosure, including:

  • changes in business;
  • changes in management or control;
  • acquisitions or dispositions of assets;
  • bankruptcy or receivership;
  • changes in registrant’s certifying accountants;
  • the financial condition and results of operations;
  • material legal proceedings;
  • changes in securities or in the security for registered securities;
  • defaults upon senior securities;
  • material increases or decreases in the amount outstanding of securities or indebtedness;
  • the results of the submission of matters to a vote of security holders;
  • transactions with directors, officers or principal security holders;
  • the granting of options or payment of other compensation to directors or officers; and
  • any other information which the foreign private issuer deems of material importance to security holders.

Form 6-K must be filed promptly after the material contained in the report is made public. Under the Form 6-K reporting regime, interim reporting for foreign private issuers parallels the requirements of the issuer’s home country regulatory and stock exchange practices.

For further information, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real South, Suite 202 North, Boca Raton, FL, (561) 416-8956, or by email at [email protected].  This securities law Q & A is provided as a general or informational service to clients and friends of Hamilton & Associates Law Group, P.A. and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Going Public Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855