Key Takeaways:
- SEC expands nonpublic review to include Section 12(g) registrations and de-SPAC transactions, increasing flexibility for issuers.
- Issuers can now submit draft registration statements any time after an IPO, removing the previous one-year restriction.
- Underwriters’ names can be omitted from initial draft filings, but disclosure is required in later public submissions.
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Key Changes to SEC’s Nonpublic Review Process You Need to Know
The SEC’s Division of Corporation Finance has introduced expanded accommodations for issuers submitting draft registration statements for nonpublic review. These updates provide greater flexibility for you, while still maintaining regulatory oversight. Key changes include:
- Broader eligibility: Nonpublic review now extends to initial registrations under Section 12(g) of the Exchange Act and de-SPAC transactions.
- Extended timing: Issuers can submit draft registration statements at any time after their IPO, removing prior restrictions.
- Underwriter disclosure flexibility: Issuers may initially omit underwriter names, with disclosure required in later filings.
These changes are striving to streamline the capital formation process while maintaining investor protection.
Expanded Nonpublic Review Accommodations
The Jumpstart Our Business Startups (JOBS) Act of 2012 first allowed Emerging Growth Companies (EGCs) to submit draft registration statements for initial public offerings (IPOs) through a confidential review process. This year, the SEC expanded this process to include non-EGCs, certain Exchange Act registration statements, and other draft filings submitted within one year of an IPO.
With these latest updates, the SEC has further broadened the scope of the nonpublic review process, offering you as the issuer more flexibility regarding your submission timing and initial disclosure requirements.
Expanded Nonpublic Review: Key Updates for You to Know
Initial Registration of Securities Under the Exchange Act
The SEC has broadened the nonpublic review process to include initial registrations under Section 12(g) of the Exchange Act. Now, you can confidentially submit an initial registration of a class of securities using Forms 10, 20-F, or 40-F under Exchange Act Sections 12(b) and 12(g).
To comply with SEC requirements, if you’re submitting draft initial registration statements for nonpublic review, you have to confirm in a cover letter that you will publicly file the following:
- The registration statement and draft submissions are at least 15 days before any roadshow.
- If no roadshow is planned, the public filing must occur at least 15 days before the requested effective date.
Additionally, SEC staff comment letters and issuer responses will be released no earlier than 20 business days after the registration statement’s effective date.
Draft Registration Statements Post-IPO
Under the new SEC accommodation, you can now submit draft registration statements at any time after your IPO for any:
- Securities Act offering
- Exchange Act registration of a class of securities under Sections 12(b) or 12(g)
This removes the previous one-year restriction following an IPO’s effective date.
Key filing requirements include:
- You must confirm in your cover letter that you will publicly file the registration statement at least two business days before the requested effective date.
- Exchange Act registration statements (Forms 10, 20-F, or 40-F) must be publicly available for 30 or 60 days (as applicable) before effectiveness.
- Only the initial submission qualifies for nonpublic review. Subsequent amendments, including responses to SEC staff comments, must be publicly filed.
De-SPAC Transactions: Nonpublic Review Eligibility
With the SEC’s SPAC rules effective July 2024, target companies in de-SPAC transactions are now treated as co-registrants since the de-SPAC functions as the target’s IPO equivalent.
Under the expanded rules, your registration statements for de-SPAC transactions (when the SPAC is the surviving entity) may now qualify for nonpublic review, provided the co-registrant target also meets the eligibility criteria for a draft submission.
Omitted Information
You may now omit the name of the underwriter(s) from initial draft registration statement submissions. However, keep in mind that the underwriter(s) must be disclosed in subsequent submissions and public filings.
While draft registration statements must be substantially complete when submitted, you can continue to omit financial information that you reasonably believe will not be required when the registration statement is publicly filed.
Additionally, you may omit certain historical financial information from your IPO draft registration statements:
- Emerging Growth Companies (EGCs) may omit annual and interim periods that will not be required separately at the time of the offering.
- Non-EGCs may omit annual and interim periods that will not be required separately at the time of public filing.
Additional accommodation may be available. For more guidance, refer to A Guide to Going Public.
Foreign Private Issuers
Foreign Private Issuers (FPIs) may take advantage of these expanded accommodations or utilize the procedures available to EGCs if you qualify. Alternatively, FPIs can follow the guidance outlined in the SEC staff’s 2012 statement.
Guidance for SEC Filings and Compliance
MGO’s Public Company Services team has a strong history of guiding companies through SEC filings, IPOs, SPAC transactions, and public company compliance. With deep industry knowledge, MGO helps companies navigate the registration process, meet SEC requirements, and improve financial disclosures while adapting to regulatory changes. Contact us to learn more.