SEC relaxes final cornerstone investor rules

The Securities and Exchange Commission (SEC) dropped the proposed 30-day lockup rule for early initial public offering buyers, known as cornerstone investors, as it issued new guidelines to spur market activity.

Emilio Aquino

SEC chair 

Under the new rules, cornerstone investment agreements must be included as material contracts in the issuer’s registration statement for SEC submission. 

These agreements outline guaranteed allocations for cornerstone investors, who must commit to purchasing shares at a final offer price within a predetermined range, with detailed disclosures required in the final prospectus.

Notably, the SEC has removed the lockup period requirement for cornerstone investors, enhancing flexibility in IPO engagements.