On July 10, 2017, the SEC’s Division of Corporate Finance started accepting confidential submissions for draft registration statements for all initial public offerings (IPOs) for non-public review. Previously, in connection with the enactment of the Jumpstart Our Business Startups Act (the “JOBS Act”) in 2012, only issuers that qualified as Emerging Growth Companies (generally, companies with annual revenues less than $1 billion) were afforded the ability to submit a draft registration statement for an IPO for non-public review. The Division announced the policy change on June 29, 2017 as part of its “efforts to facilitate capital formation.”
The June 29, 2017 announcement explained that it will not affect the current review regime for Emerging Growth Companies and foreign private issuers.
Key Dates
The Division announced that it will review the draft registration statement on a non-public basis as long as the issuer confirms that it will publicly file its registration statement and non-public draft submissions at least 15 days prior to (i) any road show or, in the absence of a road show, at least 15 days prior to the requested effectiveness of the registration statement, and (ii) the anticipated date of listing on a national securities exchange.
Follow-on Registration
The Division will also review draft registration statements submitted within 12 months following the effectiveness of the issuer’s initial Securities Act registration statement or an issuer’s Exchange Act Section 12(b) registration statement on a non-public basis. Similar to the above, the Division will review the draft registration statement on a non-public basis if the issuer confirms that it will publicly file its registration statement and non-public draft submissions at least 48 hours prior to the effectiveness of the registration statement. The non-public follow-on registration review is limited to only the initial submission. Amendments/follow-on responses are not granted confidential review under the announcement.
Content and Processing
The Division confirmed that a registration statement filed confidentially must conform to the applicable rules and forms in effect on the initial filing date. The relief from disclosure of certain historical financial information provided by Section 71003 of the FAST Act is not available to issuers other than Emerging Growth Companies. However, the Division confirmed that it would not delay the review of the registration statement due to financial information being omitted from the statement if the issuer reasonably believes such information will not be required when the registration statement is publicly filed. The Division will also consider reasonable requests to expedite review of the draft registration statement.
The Division further clarified the process by which issuers file the draft registration statement for non-public review with the SEC in a preliminary FAQ.
