Last month, the Staff of the SEC’s Division of Corporation Finance announced that, as part of the Division’s ongoing efforts to facilitate capital formation, all issuers are now permitted to submit draft registration statements relating to IPOs and Exchange Act Section 12(b) registration (e.g., spin-offs) to the Staff for nonpublic (i.e., confidential) review.
Previously, nonpublic review was available only to emerging growth companies (EGCs), as authorized by the JOBS Act, and in certain circumstances to foreign private issuers. Nonpublic submission of registration statements makes it possible for companies to avoid alerting the market of offering plans before the company is certain that it will move forward with any offering.
Summary of the SEC’s Division of Corporation Finance Revised Review Policies
- Securities Act IPOs and initial registrations: For initial Securities Act registration statements, the Staff will confidentially review the applicable registration statement (e.g., Form S-1 and S-11 for REITs) provided the issuer confirms in a cover letter that it will publicly file the registration statement and nonpublic draft submissions at least 15 days prior to any road show. If there is no road show, the issuer must confirm that it will make such public filings at least 15 days prior to the effective date of the registration statement.
- Initial registration of a class of securities under Exchange Act 12(b): The Staff will confidentially review draft registration statements in connection with an issuer’s initial registration under Section 12(b) of the Exchange Act for listing on a national securities exchange (e.g., Form 10 in connection with a spin-off), provided the issuer confirms in a cover letter that it will publicly file its registration statement and nonpublic draft submissions at least 15 days prior to the anticipated effective date of the registration statement for the listing of its securities on a national exchange.
- Securities Act offerings within one year of an IPO or Section 12(b) registration: The nonpublic submission process is also now available for draft registration statements filed within one year after an IPO or Section 12(b) Exchange Act registration. Any of these submissions are conditioned upon the confirmation by the issuer in its cover letter that the issuer will publicly file its registration statement and nonpublic draft submissions such that the registration statement is publicly available on the EDGAR system at least 48 hours prior to any requested effective time and date. Unlike an initial registration, this confidential review by the Staff is limited to the initial submission of a registration statement and does not extend to any revisions.
- Although an issuer should ensure the substantial completeness of any submitted registration statement, it will not delay processing if the issuer omits financial information that it reasonably believes will not be required at the time the registration statement is publicly filed. (Note EGCs are granted further accommodation in this regard as the JOBS Act provides that the EGC may omit financial information that it reasonably believes will not be required to be included in the registration statement at the time of the contemplated offering.)
- This policy change does not limit the confidential submission process for EGCs provided under the JOBS Act, nor does it prevent foreign private issuers from utilizing procedures available to EGCs, if applicable, or following the process set out in the guidance issued by the SEC on May 30, 2012.
Confidential Review Process Resources
- A copy of the SEC’s press release relating to confidential review of certain registration statements.
- The SEC’s more detailed announcement.
- The SEC’s FAQs relating to the confidential review process.
Please contact the author for more information on registration statements or visit our Capital Markets webpage.
Special thanks to Patrick Huston, a Bass, Berry & Sims summer associate based in our Nashville, Tennessee, office, for his assistance in drafting this post.