For foreign private issuers (FPIs) with a calendar year-end, now is the time of year to conduct the annual assessment to determine whether the company still qualifies as an FPI. Goodwin’s Public Company Advisory Practice has prepared the following memo on assessing FPI status.
SEC rules generally require that a company assess its FPI status annually as of the last business day of its second fiscal quarter to determine whether the company can continue to avail itself of the accommodations in the SEC’s forms and rules applicable to FPIs. An FPI with a calendar year-end should therefore perform its annual assessment as of June 30, 2022, to determine whether it still qualifies as an FPI.
Testing FPI status as of the last business day of an issuer’s second fiscal quarter is part of a web of annual status tests required by SEC rules that depend at least in part on facts that existed as of that date. The SEC intended that requiring issuers to perform these status tests as of the last business day of the issuer’s second fiscal quarter would provide issuers whose status would change at the end of their fiscal year a period of six months to prepare for transitions that can require significant effort and expense so now is the time to perform the FPI status test to make sure a company is ready for such transition.