SEC broadens confidential review process for draft registration statements.

The Securities and Exchange Commission (SEC) announced an expansion to its confidential submission process for draft registration statements to support capital formation while upholding investor protections. Acting Chair Mark Uyeda emphasized this initiative during a recent speech before the Florida Bar, signaling a commitment to enhancing capital formation practices.

The modifications implemented by the SEC offer greater flexibility to companies preparing for public markets entry, streamlining disclosure requirements in the initial stages while ensuring investor safeguards are maintained. These changes took effect immediately after the announcement.

Key updates include allowing companies to submit confidential draft registration statements for any offering under the Securities Act of 1933, eliminating the previous restriction to disclosures within twelve months of an initial public offering (IPO) or registration under the Securities Exchange Act of 1934. Additionally, companies can now confidentially submit initial registration filings for equity securities under Section 12(g) of the Exchange Act using various forms. Previously, only Section 12(b) filings were allowed to be submitted confidentially. Special purpose acquisition companies (SPACs) and companies undergoing de-SPAC transactions also benefit from additional accommodations under the revised policy, enabling the use of draft registration statements for confidential review.

Importantly, companies are now permitted to exclude underwriters’ names from initial draft submissions, as long as this information is included in subsequent submissions and public filings. Foreign private issuers (FPIs) have also been granted the same expanded confidential submission options, facilitating cross-border capital raises. The dedicated email address provided by the SEC serves as a resource for inquiries on eligibility for utilizing the expanded procedures.

The SEC emphasizes that these expanded accommodations will promote capital formation while protecting investor interests. Eligible issuers stand to benefit from this process through increased flexibility, reduced market impact, and enhanced strategic timing. All registrants can now refine their filings before public disclosure, minimizing premature market reactions and competitive concerns. The removal of the twelve-month limitation on confidential draft registration statements encourages better alignment of offering plans with market conditions before public announcements, allowing more time for underwriter selection.

Companies contemplating an IPO, follow-on offering, securities registration, or De-SPAC transaction should evaluate their eligibility to benefit from the SEC’s expanded guidelines. Our team is available to provide guidance on eligibility and the utilization of these enhanced accommodations. As the SEC plans to monitor practices under these expanded procedures, potential modifications, limitations, or terminations could be implemented in the future.