SEC wants firms to issue bonds faster
Companies may soon be able to raise funds from the bond market more quickly under a proposed framework from the Securities and Exchange Commission (SEC), which would allow eligible issuers to register a bond program once and conduct multiple offerings over several years.
The proposal is part of a broader package of reforms to the public offering regime for debt securities, which the SEC released for public comment until July 9 through a draft memorandum circular. It amends the 2015 Implementing Rules and Regulations of the Securities Regulation Code.
At the center of the proposal is the introduction of a Medium-Term Note Program, described as a “register once, issue many times” facility.
Under the proposed framework, an eligible company would submit its principal disclosure document for SEC review and approval only once. It could then issue multiple bond offerings over a period of up to five years by filing only a short notice containing the specific terms of each issuance, without undergoing a separate SEC review every time.
The SEC said the mechanism would enable companies to access long-term funding more efficiently, respond faster to favorable market conditions and reduce transaction costs associated with repeated bond offerings.
SEC Chair Francis Lim said the reforms recognize that the existing public offering framework has largely evolved around equity issuances and may not always reflect the realities of debt fundraising.
“These reforms seek to establish a more fit-for-purpose framework for debt securities …,” Lim said.
