QUIET PERIOD

The federal securities laws do not define the term “quiet period.” However, that term is used to refer to the period of time surrounding the filing of a registration statement during which an issuer of securities must ensure that its offering-related communications comply with the federal securities laws. This period lasts, at a minimum, from the time an issuer files a registration statement with the SEC to the time that SEC staff declare the registration statement “effective.” During that period, issuers and other participants in the registered offering must be careful that any “offer” of the registered securities is made in accordance with the federal securities laws. The failure to comply with applicable restrictions on making “offers” is referred to as “gun-jumping.” Because the SEC and courts have broadly construed the term “offer” to include communications that might generate public interest in an issuer or its securities, the scope of communications that are potentially subject to restriction is quite broad.

To ensure that the flow of information about issuers and securities offerings is not unduly limited, the SEC has adopted a number of rules to permit issuers to communicate during this period about matters other than the registered securities offering (including the release of factual business information), as well as rules that permit issuers to provide limited public information about their plans to engage in, or the status of, a registered securities offering.