SEC Expands Confidential Filing Process

Effective today, July 10, 2017, the SEC’s Division of Corporate Finance will accept draft registration statements for review on a confidential basis from an expanded group of issuers. The confidential submission process, which was formerly limited to IPOs by emerging group companies, or EGCs, is now available to most issuers and also in conjunction with follow‑on offerings in the first year after the IPO or an initial listing on a stock exchange. The confidential submission process instituted by the JOBS Act in 2012, which is not affected by this guidance, has been widely adopted by EGCs preparing to go public.

Eligibility. Confidential submissions may be made with respect to registration statements covering IPOs for all issuers (excluding issuers of asset-backed securities), initial registrations of a class of securities for listing on a stock exchange, and registration statements for follow‑on offerings submitted by the end of the 12th month after the effective date of the registration statement for an IPO or an initial stock exchange listing.

Timing. A public filing must be made at least 15 days before an IPO road show or, if no road show is conducted or the filing is for an initial registration for a stock exchange listing, at least 15 days before the requested effective date of the registration statement. For follow‑on offerings, a public filing must be made at least 48 hours before the requested effective time. Consistent with the confidential submission process for EGCs, all confidential drafts must be filed at the same time as the first public filing.

Process. An issuer must include a cover letter confirming that it will publicly file its registration statement in accordance with the new guidance.

Follow‑On Offering Limitations. Non‑public review for follow‑on offerings is limited to the initial submission only. Any amendments must be filed publicly, and the initial confidential submission must be filed at the same time as the first amendment.

Other JOBs Act Accommodations Not Included.  The SEC clarified that the expanded availability of the confidential submission process does not carry with it the other benefits provided to EGCs under the JOBS Act. For example, non‑EGCs may not engage in testing‑the‑waters communications, and all financial information must generally be included in the initial public filing; however, the staff will still process a draft submission if it is substantially complete except for financial information that the issuer reasonably believes will not be required at the time of the initial public filing. In addition, the statutory confidentiality provisions applicable to EGCs do not apply to submissions made under this expanded guidance, so issuers should consider requesting confidential treatment under Rule 83 to preclude disclosure of the non-public submissions and related correspondence in response to any FOIA request.

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