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SEC Registration Statements Requiring a U.S. Duly Authorized Representative

By: Colleen DeVries, COGENCY GLOBAL INC. on Wed, Apr 03, 2019

[Image] SEC Filing Word Cloud | Appointing a Duly Authorized Representative on SEC Registration StatementsPer the Securities Act of 1933 and the Securities Exchange Act of 1934, foreign private issuers of securities in the United States’ market are required to appoint a process agent in the United States, a contact upon whom court papers may be served.

Another requirement for foreign private issuers under the Securities Act is to appoint a Duly Authorized Representative in the United States (USDAR) and include that representative’s signature on their SEC registration statements.

Appointment and Signature of a U.S. Duly Authorized Representative

According to Section 6(a) of the Securities Act, any securities registration statements filed with the SEC must bear the signature of the issuer, its principal executive officer(s), its principal financial officer(s), its principal accounting officer(s) and the majority of its board of directors.

Foreign private issuers (including those located in U.S. territories) filing SEC registration statements are required to affix the signature of their USDAR on the form, along with the above signature requirements. These signature obligations extend to any subsequent amendments made to the registration statement.

Note: If the issuer is a foreign government or related political subdivision, the statement need only be signed by the underwriter.1

The following SEC registration statement forms used to register foreign private issuer securities all require the designation and signature of a USDAR.

  • 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.

Timing is Critical for USDAR Appointments

Appointing a USDAR is both a necessary and time-sensitive step for foreign private issuers registering to issue securities in the United States. Not having the signature of a USDAR in advance of filing the registration statement via EDGAR (Electronic Data Gathering, Analysis, and Retrieval system) can cause delays with the SEC filing resulting in serious consequences, e.g. missing a target filing date may cause a change in pricing of the securities due to interest rate fluctuations that may not be favorable to investors.

USDAR and Agent for Service of Process

Unlike the role of an agent for service or process agent, the point of contact upon which legal process may be served, the role of a USDAR is unclear. The Securities Act does not define it, nor has there been a court decision setting forth the responsibility or liability of a USDAR. In 2008, Vivian Oh vs. Max Chan brought this ambiguity before the Central District Court of California but ultimately, the court declined to offer any definition to the role of a USDAR.

This lack of clarity could lead one to assume that the role of the USDAR and process agent are distinct. In fact, a single service company can provide both USDAR and process agent services and may be a more efficient option for completing these appointments as required by the Securities Act.

Foreign private issuers that engage one service company to serve in both capacities should consider obtaining an acceptance letter for both the USDAR and process agent appointments, along with a signature from the USDAR on the registration statement, to be held in escrow while the SEC filing is pending.

 


1 Notably, one court has recognized in dicta that a foreign government might satisfy this provision by having its duly authorized representative execute the registration. See SEC v. Chinese Consol. Benevolent Ass’n, 39 F. Supp. 85, 89 (S.D.N.Y. 1940), rev’d on other grounds, 120 F.2d 738 (2d Cir. 1941), cert. denied, 314 U.S. 618 (1941).

 

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

Topics: Process Agent