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Appointing a Process Agent in SEC Registration Statements

By: Colleen A. DeVries, COGENCY GLOBAL on Thu, Apr 18, 2019

[Image] Business Man Offering Papers | Appointing a Process Agent on SEC Filings

As the economies and business conditions in emerging markets go through inevitable ups and downs, demand for global stock offerings also rises and falls. During times of growth and favorable conditions, foreign companies – attracted by flexible exchange rules and liquid stock exchanges – frequently turn to the U.S. as a source of raising capital.

Pursuant to the regulations of the Securities Act of 1933, as amended (‘Securities Act’), and the Securities Exchange Act of 1934, as amended (‘Exchange Act’), foreign private companies seeking a public offering in the U.S. market are required to name an agent for service of process (also referred to as process agent or contract agent). In this type of securities offering, the process agent serves as the point of contact upon which legal process may be served in any action arising out of the securities offering against the foreign issuer.

Securities Act and Exchange Act Disclosure Requirements

Generally, the Securities Act requires companies wishing to offer and sell securities in the U.S. to file one of a series of registration statements with the Securities and Exchange Commission (SEC) for the issuance, or comply with certain requirements that deem the issuance exempt from such registration.

The Exchange Act requires companies to register classes of equity securities in order to list these securities on a national securities exchange in the U.S. The Exchange Act also requires companies to make periodic filings with the SEC to disclose information about their business operations, financial condition and management.

As a result of these acts, foreign private issuers registering to sell securities in the U.S. are required to file a detailed disclosure form with the SEC. Depending on the nature of the issuance and to whom the securities will be offered, the level of disclosure will vary.

SEC Registration Statements Requiring Designation of ‘Agent for Service’

As defined in Section 230.100 of the Securities Act, the name, U.S.-based address and phone number of an ‘agent for service’ (a.k.a process agent) are required on the cover page of the following SEC registration statements:

  • SEC Form F-1: Foreign private issuers publicly selling securities for the first time in the U.S. register the securities on SEC Form F-1. This registration form requires a higher level of disclosure than some of the other SEC registration forms.
  • SEC Form F-3: Short form registration statement used by foreign private issuers that have previously completed registered offerings in the U.S.
  • SEC Form F-4: Registration statement filed in connection with business combinations and exchange offers.
  • SEC Form F-6: Registration of depositary shares evidenced by American Depositary Receipts.
  • SEC Form S-8: Registration of securities issued to employees under an employee benefit plan.

Note: You can access these registration forms from the SEC website.

In addition to receipt of legal proceedings, the agent for service listed on these registration forms is then authorized (and required) to receive notices and communications from the SEC.

Unlike a contractual transaction, which is likely to identify a fixed term of an agreement and term for the process agent, a foreign issuer is required to retain the process agent for an indefinite period of time – as long as the securities are registered.

Timing of Process Agent Appointment is Critical

Coordinating the timing of the process agent appointment is critical and must be done in advance of the electronic filing the registration statement via EDGAR (Electronic Data Gathering, Analysis, and Retrieval system) with the SEC. While the process agent’s acceptance is one of the smaller matters on a pre-filing conditions precedent list, its importance should not be overlooked. Not having the consent of the process agent in advance of the scheduled submission date may cause a delay in the filing with the SEC, resulting in serious consequences to all parties. Confirming the process agent at least a day in advance of the filing is prudent.

In addition to naming an agent for service in an SEC registration statement, foreign private issuers may be required, in some cases, to name a U.S. Duly Authorized Representative (USDAR). The roles of the agent for service and the USDAR are distinct but equally important to be in place prior to filing with the SEC.



This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Process Agent