SEC Flash Report - July 2017

July 2017

SEC Extends Voluntary Submission of Draft Registration Statements to All Companies

The SEC’s Division of Corporation Finance (the “Division”) announced on June 29, 2017 that it will make the confidential submission process (i.e. submission of draft registration statement for nonpublic review) available to an expanded class of issuers and transactions beginning July 10, 2017 as follows: 
Securities Act - Initial public offerings (IPOs) and initial registrations
All companies may now submit an initial registration statement confidentially, provided the Securities Act registration statement (e.g. Form S-1), as well as the initial confidential submission and all amendments, is publicly filed with the SEC no later than 15 days prior to any road show or if there is no road show, the requested effective date of the registration statement.  Prior to this new policy, the confidential submission process for IPOs was only available to emerging growth companies (EGCs) and certain foreign private issuers.
Exchange Act Section 12(b) - Initial registration of a class of securities
Companies may now submit a draft Exchange Act registration statement when listing a new class of securities on a national exchange (for example, for its initial listing or registration in connection with spin-offs).  Companies must publicly file the Exchange Act registration statement (e.g. Form 10) and prior confidential submissions no later than 15 days before the anticipated effective date of the registration statement.  Prior to this new policy, the confidential submission process was only available to Securities Act IPO registration statements (e.g. Form S-1).
Follow-on Offerings - within one year of an IPO or Exchange Act Section 12(b) registration
Registration statements for follow-on offerings within one year of an IPO or Exchange Act 12(b) registration may also be submitted for confidential review, provided the registration statement and the initial draft submission are publicly filed at least 48 hours prior to any requested effective time and date.  The confidential review is limited to the initial submission, meaning any amendments, including changes made in response to staff comments, must be done in a public filing.
Other important things to note on the confidential submission process:
  • The draft registration statement must be substantially complete when submitted.  However, a company that is not an EGC may omit financial information that it reasonably believes will not be required when the registration statement is initially filed publicly. This accommodation is different from the relief provided by the FAST Act, which allows an EGC to omit information it reasonably believes will not be required at the time the registration statement becomes effective.
  • Draft registration statements are “submitted” and not “filed” with the SEC and therefore do not require signatures by officers and directors and consent of auditors and other experts.  While filed public registration statements require signatures and consents, companies do not need to go back and obtain the signatures and consents for the nonpublic submissions when those submissions are filed.
  • Companies must convey their agreement with the public filing guidelines of this announcement in a cover letter to its draft registration statement.
  • Foreign Private Issuers may elect to proceed in accordance with the new policy or those available to EGCs (if the issuer qualifies as an EGC) or follow the staff guidance in its May 30, 2012 statement.
The new policy is part of the Division’s ongoing efforts to facilitate capital formation. The confidential submission program addresses concerns some companies may have about publicly disclosing sensitive or proprietary information early in the IPO process.   It also allows companies to start its IPO process away from public attention while considering other alternatives.   
The copy of the staff’s announcement and FAQs can be found on the SEC’s website. 

For questions related to matters discussed above, please contact:
Jeff Jaramillo
National Partner
SEC Services Practice
Paula Hamric
National Assurance Partner