SEC Draft Registration Statement Accommodations
SEC staff expands nonpublic draft registration statement review to facilitate capital formation for all issuers.
Topic Tags
Background
On March 3, 2025, the SEC's Division of Corporation Finance (the "Staff") issued an announcement immediately expanding the accommodations available for issuers submitting draft registration statements ("DRS") for nonpublic review. These enhancements are intended to facilitate capital formation without diminishing investor protection.
Takeaways
- 1.Expansion to All Reporting Companies (Follow-on Offerings): Previously, non-EGC issuers could only use the DRS process for subsequent offerings within the 12-month period following their IPO or Section 12(b) registration. The new accommodations eliminate this 12-month time constraint. Any company subject to reporting requirements under Exchange Act Section 13(a) or 15(d) may now submit a DRS for subsequent Securities Act offerings (e.g., on Forms S-1 or S-3). For subsequent offerings, the Staff's nonpublic review will be limited to the initial draft submission; the issuer's response to Staff comments must be made in a public filing. The issuer must publicly file its DRS and registration statement at least two business days prior to the requested effective time.
Reference
- [1]Expansion to All Reporting Companies (Follow-on Offerings): Previously, non-EGC issuers could only use the DRS process for subsequent offerings within the 12-month period following their IPO or Section 12(b) registration. The new accommodations eliminate this 12-month time constraint. Any company subject to reporting requirements under Exchange Act Section 13(a) or 15(d) may now submit a DRS for subsequent Securities Act offerings (e.g., on Forms S-1 or S-3). For subsequent offerings, the Staff's nonpublic review will be limited to the initial draft submission; the issuer's response to Staff comments must be made in a public filing. The issuer must publicly file its DRS and registration statement at least two business days prior to the requested effective time.
Executive Summary
Key changes include
(1) expanding nonpublic review to initial registrations under Exchange Act Section 12(g) (e.g., Forms 10, 20-F); (2) permitting all reporting companies to submit subsequent DRSs regardless of how long they have been public (removing the 12-month limit); (3) expanding DRS review for certain de-SPAC transactions (SPAC-on-top structures); and (4) allowing issuers to omit underwriter names from their initial DRS submission.
Legal Analysis and Impact
On March 3, 2025, the SEC's Division of Corporation Finance (the "Staff") issued an announcement immediately expanding the accommodations available for issuers submitting draft registration statements ("DRS") for nonpublic review. These enhancements are intended to facilitate capital formation without diminishing investor protection.
Background
The 2012 JOBS Act first permitted Emerging Growth Companies (EGCs) to nonpublicly submit draft registration statements for IPOs. The SEC expanded this accommodation in 2017 to all issuers for initial public offerings (IPOs) and initial registrations under Section 12(b) of the Securities Exchange Act ("Exchange Act"). The March 3, 2025 announcement represents a further extension of this policy.
Expansion to All Reporting Companies (Follow-on Offerings)
Previously, non-EGC issuers could only use the DRS process for subsequent offerings within the 12-month period following their IPO or Section 12(b) registration. The new accommodations eliminate this 12-month time constraint. Any company subject to reporting requirements under Exchange Act Section 13(a) or 15(d) may now submit a DRS for subsequent Securities Act offerings (e.g., on Forms S-1 or S-3). For subsequent offerings, the Staff's nonpublic review will be limited to the initial draft submission; the issuer's response to Staff comments must be made in a public filing. The issuer must publicly file its DRS and registration statement at least two business days prior to the requested effective time.
Expansion to Exchange Act Section 12(g) Registrations
The nonpublic review process is now extended to the initial registration of a class of securities under Exchange Act Section 12(g) (on Forms 10, 20-F, or 40-F). This applies to companies that must register their securities because they triggered the asset and record holder thresholds. Issuers should note that the nonpublic DRS submission does not satisfy the statutory deadline under Section 12(g) to file the registration statement within 120 days after their fiscal year-end.
Clarification for De-SPAC Transactions
Consistent with the final SPAC rules effective in July 2024, the new accommodations permit the DRS process for de-SPAC transactions where the SPAC is the surviving entity ("SPAC-on-top" structure), provided the target company would otherwise be independently eligible to submit a DRS.
Omission of Underwriter Information in Initial Draft
The SEC Staff will now permit issuers to omit the name of the underwriter(s), as required by Items 501 and 508 of Regulation S-K, from their initial DRS submission. Issuers must include this information in subsequent draft submissions and in the public filing.
Implications for Foreign Private Issuers
FPIs may elect to use these enhanced accommodations; if an FPI also qualifies as an EGC, it may continue to use the EGC procedures. An FPI may also elect to follow the guidance in the SEC's May 30, 2012 statement for specific situations (e.g., existing non-U.S. exchange listing or privatization transactions).
Legal Analysis and Outlook: This set of procedural updates removes unnecessary friction for issuers, especially existing public companies, seeking to access the registered capital markets. The removal of the 12-month limit is particularly beneficial for non-WKSI issuers contemplating a follow-on offering who are sensitive to market volatility. Allowing the review to begin without a finalized underwriter provides valuable timing and flexibility.
Summary of Relevant Regulations and Rules
Regulatory references are integrated in the legal analysis section above.
