On January 23, 2026, the SEC withdrew, revised and issued new C&DI on lock-up agreements in business combinations.
Business Combinations
The SEC issued two new Compliance & Disclosure Interpretations — Questions 139.29 and 139.30 — addressing when an issuer or acquiror may execute lock-up agreements (or agreements to tender) before filing a Form S-4 or Form F-4 in connection with a registered exchange offer.
These interpretations address a recurring practical issue in negotiated transactions: can you secure tender commitments before filing the registration statement, or does doing so create Securities Act problems?
The short answer is yes — but only within carefully defined guardrails.
As always, the analysis turns on when a “contract of sale” arises under the Securities Act and whether the staff views the early lock-up as an impermissible pre-registration offer or sale.
The Core Issue: When Does a Lock-Up Become a Contract of Sale?
Both new C&DIs begin with the same premise: the execution of a lock-up agreement (or agreement to tender) may constitute a contract of sale under the Securities Act.
If that is the case, then the issuer or acquiror may have effectively offered or sold securities before the exchange offer is made to other holders — raising Section 5 concerns.
However, the staff expressly acknowledges the legitimate business reasons for seeking lock-ups in registered exchange offers. That acknowledgment is important. The staff is not attempting to prohibit pre-filing commitments; it is attempting to control how they are structured.
These new interpretations build directly on existing guidance in C&DI 239.13, which addresses lock-up agreements in Rule 145(a) transactions. There, the staff similarly recognized that obtaining commitments from management and principal holders may constitute an investment decision for Securities Act purposes, potentially triggering a pre-registration offer and sale.
Under C&DI 239.13, the staff has historically not objected to registration where:
- The lock-ups involve only executive officers, directors, affiliates, founders and their family members, and holders of 5% or more of the voting securities of the target;
- Those insiders collectively own less than 100% of the voting securities;
- Votes are solicited from non-signing holders if required; and
- A prospectus is delivered to all security holders entitled to vote.
If those conditions are not satisfied, the staff has generally taken the position that subsequent registration is not permitted — unless the insiders receive their securities pursuant to a valid exemption and the registered offering is limited to non-signing holders.
Questions 139.29 and 139.30 extend this analytical framework beyond Rule 145(a) merger votes to registered exchange offers and third-party tender offers.
C&DI 139.29 – Issuer Exchange Offers
Question 139.29 addresses situations where an issuer is contemplating a registered exchange offer and seeks lock-up agreements from security holders before filing its Form S-4 or Form F-4.
The staff will not object to registration if:
- The lock-ups are executed only by accredited investors or qualified institutional investors;
- The signatories collectively own less than 100% of the subject securities;
- The exchange offer will be made to all holders; and
- All eligible holders are offered the same amount and form of consideration.
If these conditions are not satisfied, registration is generally not permitted.
However, consistent with C&DI 239.13, the staff provides an alternative structure. If the accredited investors or QIBs who executed the lock-ups receive securities only pursuant to a valid Securities Act exemption, and the securities registered on Form S-4 or F-4 are offered only to those holders who did not execute lock-ups, the staff will not object.
The uniform consideration requirement is critical. If early signatories receive differentiated economics, the structure quickly becomes problematic.
C&DI 139.30 – Negotiated Third-Party Exchange Offers
Question 139.30 addresses negotiated third-party exchange offers where an acquiror seeks commitments from management and principal holders of a target company before filing its S-4 or F-4.
Here, the staff aligns the permitted signatory group with the Rule 145 insider framework in 239.13. Lock-ups may involve only:
- Executive officers, directors, affiliates, founders and their family members; and
- Holders of 5% or more of the target’s securities (“target company insiders”).
Again, the conditions include:
- Less than 100% ownership by signatories;
- The exchange offer being made to all holders; and
- Uniform consideration.
If those requirements are not satisfied, registration is generally not permitted unless the insiders receive securities pursuant to a valid exemption and the registered offer is limited to non-signing holders.
This is a consistent theme across 239.13, 139.29 and 139.30: if early commitments cross the line into a Securities Act sale, the staff expects the transaction to be bifurcated between exempt and registered components.
Tender Offer Considerations Remain Separate
Importantly, both new C&DIs close with a reminder that issuers and acquirors must separately analyze whether seeking lock-ups represents the commencement of a tender offer.
This is not a throwaway line. It reflects the SEC’s longstanding focus on the totality-of-the-circumstances analysis under Regulation 14D and 14E.
I discussed similar issues in my prior blog on SEC guidance relating to mergers and acquisitions, Forms S-4 and tender offers, which can be found HERE. Also for more on tender offers, see HERE.
Even if the Securities Act structure works, parties must consider whether communications, timing, and scope of solicitation could trigger early tender offer obligations.
What This Means in Practice
From a deal planning perspective, these new interpretations are helpful because they provide clarity and predictability.
They confirm:
- Pre-filing lock-ups are not per se prohibited;
- The SEC recognizes legitimate business needs for deal certainty;
- The analysis turns on who signs, how much they own, and whether uniform consideration is preserved; and
- Where necessary, exempt offerings can be structured alongside registered offerings.
Where practitioners encounter difficulty is when lock-ups expand beyond accredited investors, QIBs, or defined insider groups, or when the signatories collectively represent all or substantially all of the outstanding securities. At that point, the registered exchange offer begins to resemble a completed sale rather than a broad-based offer.
As always, the key is planning early. Once commitments are signed, flexibility narrows quickly.
Bottom Line
Questions 139.29 and 139.30 do not change the law, but they clarify how the staff expects practitioners to navigate pre-filing lock-ups in registered exchange offers and third-party transactions.
The guardrails are clear:
- Limit the signatory universe;
- Preserve uniform consideration;
- Avoid 100% lock-ups;
- Consider exemption strategies where appropriate; and
- Independently analyze tender offer implications.
The time to structure this correctly is before the first lock-up agreement is circulated — not after the Form S-4 has already been drafted.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firms reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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