Interpretive guidance released for confidential filing of IPO registration statements

The SEC published additional interpretive guidance on June 30, 2017, to explain its expansion of the confidential filing process for registration statements for initial public offerings (IPO).

The guidance in Frequently Asked Questions (FAQs) on Voluntary Submission of Draft Registration Statements explains the confidential filing process in Section 6(e)(2) of the Securities Act of 1933, which were added by the 2012 JOBS Act. Access to confidential filings was expanded to all companies on June 29 in a brief statement issued by the market regulator. The change did not require the agency to use the notice-and-comment period for rulemaking and is one of the first significant actions Chairman Jay Clayton has made since assuming leadership of the market regulator in May. Sec. 106 of pl112-106

In addition, the SEC described the expansion of the confidential filing process in Draft Registration Statement Processing Procedures Expanded.

According to Section 6(e)(2), the confidential filing process is available to companies that meet the JOBS Act definition of emerging growth company, which is a company with less than $1 billion in revenue that is within five years of its IPO date. The FAQs on Draft Registration Statements say that companies that do not satisfy the definition of an emerging growth company can make use the confidential filing process by using the DRS submission type in the SEC’s EDGAR system.

The FAQs also explain the steps companies should take to ensure that their IPO registrations remain confidential until they are ready for them to be made publicly available.

The SEC said the changes go into effect on July 10.

In a statement, Division of Corporation Finance Director Bill Hinman called the change “an important step in our efforts to foster capital formation, provide investment opportunities, and protect investors. This process makes it easier for more companies to enter and participate in our public company disclosure-based system.”

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