Joint Letter to the SEC on the Registered Offering Reform Proposal

Ladies and Gentlemen:

The Bank Policy Institute, the American Bankers Association, and the ABA Securities Association appreciate the opportunity to comment on the Securities and Exchange Commission's proposal regarding Registered Offering Reform. We support the SEC's objective of enhancing capital formation in the public securities markets. We are submitting comments to specifically highlight the negative implications of one aspect of the proposal for banks.

Executive summary

The proposed elimination of Form S-3 eligibility for certain "ineligible issuers" would represent a significant departure from the SEC's longstanding regulatory approach, under which "ineligible issuer" status, in particular under paragraphs (v) and (vi) of the definition, has limited certain offering-related accommodations, but has not restricted access to Form S-3 itself or precluded registered shelf offerings. The proposal would significantly expand the consequences of being an "ineligible issuer" by disqualifying certain "ineligible issuers" from using Form S-3 and conducting shelf offerings. This change would disproportionately and adversely affect public U.S. bank holding companies and savings and loan holding companies ("Bank Issuers"), which are among the largest and most frequent issuers in the U.S. public capital markets through shelf offerings on Form S-3. To avoid a final rule that harms the ability of issuers, including Bank Issuers, to efficiently access the U.S. public capital markets, we urge the SEC to revise the proposal so that "ineligible issuer" status restricts eligibility for only automatically effective shelf registration statements and not for Form S-3 and the shelf registration framework itself.

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