6220.1 Financial statements of a foreign private issuer must be as of a date within nine months of the effective date of a registration statement. Audited financial statements for the most recently completed fiscal year must be included in registration statements declared effective three months or more after fiscal year-end. Under the rule, a registration statement of a foreign private issuer may become effective with audited financial statements as old as 15 months, with the most recent interim statements as old as nine months. If interim statements are required, they must cover a period of at least six months.
NOTE: Foreign private issuers use Form 20-F as both an Exchange Act registration statement and an annual report form. The age of financial statement requirements under Item 8 of Form 20-F applies when Form 20-F is used as a registration statement.
6220.2 The 15-month period for audited statements is extended to 18 months, and the nine month period for interim statements is extended to 12 months, for the following offerings:
a. Exercise of outstanding rights granted pro rata to all existing security holders;
b. Dividend or interest reinvestment plan; or
c. Conversion of outstanding convertible securities or exercise of outstanding transferable warrants. [Item 8 of Form 20-F]
6220.3 Special Rule for Foreign Private Issuer IPOs - Audited financial statements in initial public offerings must be no more than 12 months old at the time of filing and upon the effectiveness of the registration statement. However, this rule applies only where the registrant is not public in any jurisdiction. The registrant may comply with the 15-month requirement if the registrant is able to represent adequately that compliance with the 12-month requirement is not required in any other jurisdiction and it is impracticable or involves undue hardship. The representation must be filed as an exhibit to the registration statement. [Item 8 of Form 20-F] (Last updated: 10/30/2020)
6220.4 The age requirements in Item 8 of Form 20-F also apply to financial statements of (Last updated: 12/31/2022):
a. Foreign businesses acquired by both foreign and domestic registrants under S-X 3-05, including filings by domestic registrants under Items 2.01 and 9.01 of Form 8-K (see Sections 2045.14 and 2045.15);
b. Foreign target businesses required in Form S-4 or Form F-4;
c. Foreign equity investees of both foreign and domestic registrants under S-X 3-09; and
d. Foreign businesses that are acquired real estate operations under S-X 3-14.
6220.5 A foreign private issuer that has been in existence less than a year must include an audited balance sheet that is no more than nine months old. If the foreign private issuer has commenced operations, audited statements of comprehensive income, stockholders' equity and cash flows for the period from the date of inception to the date of the audited balance sheet also are required.
6220.6 More Current Published Information
a. If financial information reporting revenues and income for an annual or interim period more current than otherwise required by Item 8 of Form 20-F is made available to shareholders, exchanges, or others in any jurisdiction, that information should be included in the registration statement. The more current information is not required to be reconciled to U.S. GAAP. However, a narrative explanation of differences in accounting principles should be provided, and material new reconciling items should be quantified. Differences between foreign and U.S. GAAP can be identified by cross-reference to U.S. GAAP reconciliation footnotes elsewhere in the filing. Note that the reconciliation requirements do not apply to issuers filing audited financial statements prepared under IFRS as issued by the IASB. See Section 6300.
b. Occasionally, the interim information that is publicly distributed in the issuer's home country will be prepared using accounting standards that are different from those used in the U.S. registration statement. For example, a foreign issuer may use U.S. GAAP in its primary financial statements in filings with the SEC, but reports in a foreign GAAP in its home country. The company releases more recent earnings information in its home country in foreign GAAP. Item 8.A.5 requires that information to be included in the prospectus. In this instance, the U.S. investor has not had the benefit of knowing the reconciling items between home-country GAAP and U.S. GAAP. Therefore, the information disclosed pursuant to Item 8.A.5 would need to be supplemented with a description and quantification of differences in accounting principles. In this situation, an issuer may either (a) reconcile the Item 8.A.5 information to U.S. GAAP or (b) provide a reconciliation from U.S. GAAP to foreign GAAP (reverse reconciliation) for at least the most recent fiscal year required in the registration statement. (Last updated: 9/30/2009)
c. Inclusion of published information under Item 8.A.5 does not ordinarily trigger a requirement to include full interim financial statements more recent than otherwise required. For example, if complete financial statements related to the most recent quarter (but not the comparative period) are distributed in a foreign issuer's home country, that information must be included in the U.S. registration statement. Comparative prior period information is not required because the information provided is included only because of Item 8.A.5. In order to avoid confusing U.S. readers, the registrant should include disclosure explaining why the information is provided particularly when the information is placed with other financial statements and may look incomplete. (Last updated: 12/31/2009)
d. However, if the information provided contains a reconciliation to U.S. GAAP, the staff believes that inclusion of reconciled information for the comparative prior periods generally will also be necessary to prevent the current period information from being misleading. A foreign private issuer is not ordinarily required to provide U.S. GAAP information in its home jurisdiction. Accordingly, when a foreign private issuer presents more current U.S. GAAP information, it effectively has decided to present interim financial statements, and is also required to present comparatives as required by Item 8.A.5 of Form 20-F. In these circumstances, the current and comparative interim period would need to be covered by MD&A and pro forma information would need to be updated to that date. (Last updated: 12/31/2009)
6220.7 Acquired and to be Acquired Foreign Businesses under S-X 3-05
a. Financial statements of acquired and to be acquired foreign businesses required under S-X 3-05 must comply with the age of financial statement requirements at the time the registration statement is declared effective. For a calendar year-end entity, this means that if a registration statement were to become effective prior to October 1, 20XX, financial statements for any interim period would not be required under S-X 3-05 for a foreign business.
b. However, interim financial statements for the period preceding the acquisition date may not be omitted solely on the basis that the acquisition occurred during the first nine months of the current year; consideration must be given to the requirements of Item 8.A.5. of Form 20-F. The financial statements generally need not be updated if the omitted period is less than six months, and the acquired business does not prepare quarterly financial statements under its home-country reporting requirements.
6220.8 Age of Pro Formas in Cross-border Business Combinations
NOTE: See Section 6360 for additional guidance on preparation of pro forma financial information.
a. The age of the pro forma financial information included in a registration statement is based on the age of financial statements requirement applicable to the registrant. If a foreign private issuer files a Form F-4 and the target company is a U.S. domestic registrant, the age of the pro forma information may be determined by reference to Item 8 of Form 20-F. By contrast, if a U.S. domestic registrant files a Form S-4 and the target company is a foreign private issuer, the age of the pro forma information must be determined by reference to S-X 3-12.
b. Application of the age of financial statement rules may require the foreign target company to include in a Form S-4 a period in the pro forma information that would be more current than its separate historical financial statements. However, S-X Article 11 permits the ending date of the periods included for the target company to differ from those of the registrant by up to 93 days. Registrants are permitted to use combinations of periods that involve overlaps or gaps in the information of the target company of up to 93 days, provided that the resulting annual and interim periods are of the same length required for the registrant, and there are no overlaps or gaps in the registrant's information. However, registrants are not permitted to omit an interim pro forma presentation because of different fiscal periods.
6220.9 In certain circumstances, the staff will consider special processing needs for cross-border offerings which involve special problems of coordination among several national jurisdictions. Foreign issuers should direct requests for special processing to the Division's Office of International Corporate Finance in advance of filing.
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