In the three weeks since President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”), the SEC has issued five sets of guidance, primarily in the form of Frequently Asked Questions (FAQs). A substantial majority of this guidance has related to emerging growth companies, a new category of issuer defined in the JOBS Act, and in particular to the ability of such companies to submit draft IPO registration statements for confidential review by the SEC Staff. The following memorandum summarizes some of the more interesting and important provisions of the Staff’s guidance to date.
Emerging Growth Companies
Confidential Review of IPO Registration Statements
The JOBS Act provides that an emerging growth company whose common equity securities have not been previously sold pursuant to an effective registration statement under the Securities Act of 1933 may confidentially submit a registration statement and subsequent amendments to the SEC for confidential nonpublic review. A company that has sold registered securities other than common equity securities may use the confidential submission process so long as it otherwise qualifies as an emerging growth company. Conversely, a company that previously has offered common equity securities pursuant to an employee benefit plan registration statement or a company that previously has registered common equity securities for sale by selling stockholders in a secondary offering may not use this confidential process. The confidential submission process applies only to Securities Act registration statements and is not available for Forms 10 or 20F. A foreign private issuer that qualifies as an emerging growth company can use the confidential submission process to the same extent as a domestic company. A foreign private issuer that does not qualify as an emerging growth company may still qualify to submit a registration statement on a confidential basis if it meets the separate requirements for nonpublic submissions by foreign private issuers set forth in the SEC’s policy on this matter.
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