Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

SEC Now Allowing All Companies to Make Confidential IPO Filings

Author: Scarinci Hollenbeck, LLC

Date: July 27, 2017

Key Contacts

Back

In effort to boost capital formation, SEC now allowing all companies to make confidential IPO filings

In an effort to boost capital formation, the Securities and Exchange Commission (SEC) recently announced that it will accept voluntary draft registration statement submissions from all issuers for nonpublic review. The change went into effect on July 10, 2017.

SEC Allows All Companies To Make Confidential IPO FIlings
Photo courtesy of Stocksnap.io

The ability to keep filings confidential in the early stages of an initial public offering (IPO) was previously limited to emerging growth companies. Snap and Twitter are two well-known examples of companies that previously relied on the JOBS (Jumpstart Our Business Start-Ups) Act provision. According to the SEC, 1,350 confidential IPO filings have been submitted, as of March 31, 2017.

The SEC is hopeful that expanding the opportunity to all companies will encourage more companies to take the IPO plunge, given that the market has lagged in recent years. “We are striving for efficiency in our processes to encourage more companies to consider going public, which can result in more choices for investors, job creation and a stronger U.S. economy,” said new SEC Chair Walter J. Clayton.

SEC Filings that Can Be Made Confidentially

For companies planning an IPO, the SEC advised that it will review a draft initial Securities Act registration statement and related revisions on a nonpublic basis provided that the issuer confirms in a cover letter to the nonpublic draft submission that it will publicly file its registration statement and nonpublic draft submissions at least 15 days prior to any road show or, in the absence of a road show, at least 15 days prior to the requested effective date of the registration statement. Moreover, the submitter of the information must comply with SEC’s Confidential Treatment Procedure under Rule 83.

The confidential submission process will be available for businesses pursuing a direct listing on a stock exchange without conducting an IPO. In those cases, the SEC will review a draft registration statement and related revisions on a nonpublic basis provided that the issuer confirms in a cover letter to the nonpublic draft submission that it will publicly file its registration statement and nonpublic draft submissions at least 15 days prior to the anticipated effective date of the registration statement for its listing on a national securities exchange.

Finally, the SEC will also accept draft registration statements submitted prior to the end of the twelfth month following the effective date of an issuer’s initial Securities Act registration statement or an issuer’s Exchange Act Section 12(b) registration statement for nonpublic review. The agency advises that an issuer submitting a draft registration statement for nonpublic review in these circumstances should confirm in its cover letter that it will publicly file its registration statement and nonpublic draft submission such that it is publicly available on the EDGAR system at least 48 hours prior to any requested effective time and date.

SEC staff comments may ultimately become public.

Benefits of the Non-Public Review Process

Filing initial draft registration statements confidentially allows companies to work out any issues with the SEC outside of the public spotlight. As highlighted by the SEC, the non-public review process also “reduces the potential for lengthy exposure to market fluctuations that can adversely affect the offering process and harm existing public shareholders.”

The ability to opt into the initial non-public review requires meeting certain technical requirements when filing and potential issuers should consult with legal counsel in seeking to do so.

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Jeffrey Cassin, at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Tariff Response Options for Small Businesses Facing Financial Distress post image

Tariff Response Options for Small Businesses Facing Financial Distress

The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]

Author: Brian D. Spector

Link to post with title - "Tariff Response Options for Small Businesses Facing Financial Distress"
Common Causes of Partnership Disputes and How to Resolve Them post image

Common Causes of Partnership Disputes and How to Resolve Them

Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]

Author: Christopher D. Warren

Link to post with title - "Common Causes of Partnership Disputes and How to Resolve Them"
President Trump's Termination of Member Gwynne Wilcox post image

President Trump's Termination of Member Gwynne Wilcox

On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]

Author: Matthew F. Mimnaugh

Link to post with title - "President Trump's Termination of Member Gwynne Wilcox"
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide post image

How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide

Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]

Author: Christopher D. Warren

Link to post with title - "How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!