SEC Expands Accommodations for Draft Registration Statements
Client Alert | March 10, 2025
The accommodations provide more flexibility for certain companies to initiate registration of their securities, spin-offs, and other offering processes without making the process initially public.
On March 3, 2025, the Division of Corporation Finance of the Securities and Exchange Commission (SEC) announced that it is further expanding existing accommodations to allow more companies to confidentially submit draft registration statements for nonpublic review. These accommodations provide more flexibility for certain companies to initiate registration of their securities, spin-offs, and other offering processes without making the process initially public.
Expanded Accommodations
As discussed in greater detail below, new accommodations include the following:
- Confidential submission is available for initial registration statements under both Section 12(b) of the Exchange Act of 1934, as amended (the Exchange Act), in connection with a spin-off and Section 12(g) of the Exchange Act in connection with securities registrations upon triggering shareholder and asset value thresholds;
- Foreign private issuers now have expanded options for submitting draft registration statements, including electing to be treated as an emerging growth company (EGC) if so qualified or following earlier SEC guidance issued in May 2012;
- Issuers are able to confidentially submit registration statements regardless of how long they have been public, which would benefit non-WKSIs (well-known seasoned issuers) in the context of follow-on offerings;
- Public targets of de-SPAC transactions may now confidentially submit registration statements as if they were conducting an IPO; and
- Issuers are permitted to omit underwriter names in the initial submission of the draft registration statements, allowing the SEC review process to begin earlier.
Exchange Act Registrations
The accommodations expand the availability of nonpublic review to classes of securities registered on Forms 10, 20-F, or 40-F under both Section 12(b) and Section 12(g) of the Exchange Act (as opposed to only Section 12(b) of the Exchange Act under the prior accommodation). Section 12(b) registration is used when a company intends to list securities on a national securities exchange, often in connection with a spin-off. In addition, when a company has total assets of more than $10 million and 2,000 record holders of its equity securities (or 500 non-accredited investors) as of the last day of its fiscal year, it must register its securities under Section 12(g) of the Exchange Act.
Issuers registering under Section 12(g) of the Exchange Act should note, however, that submitting a draft for nonpublic review does not satisfy the requirement that a registration statement be filed within 120 days of the end of the issuer’s fiscal year.
In addition, issuers must continue to publicly file the registration statement and draft submissions no later than 15 days prior to a road show or, in the absence of a road show, the requested effective date. Note, however, that issuers will need to publicly file Exchange Act registration statements on Forms 10, 20-F, and 40-F so that the full 30- or 60-day period, as applicable, will run prior to effectiveness.
Foreign Private Issuers
Where desired, instead of submitting draft registration statements under these new accommodations and the prior accommodations in 2017, foreign private issuers may elect to proceed in accordance with the procedures available to EGCs (if they so qualify) or follow the guidance in the SEC’s May 30, 2012 statement (the May 2012 guidance). The May 2012 guidance applies to (a) foreign governments listing their debt securities, (b) foreign private issuers that are already listed on non-U.S. exchanges, (c) foreign private issuers being privatized by foreign governments, or (d) foreign private issuers which can show that a public filing of an initial registration statement would conflict with the law of an applicable foreign jurisdiction.
Follow-on Securities Act Offerings and Exchange Act Registrations
The accommodations also remove the requirement that draft registration statements could only be submitted confidentially within a 12-month period following the date the issuer became subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act.
Under the prior accommodation, due to the time limit, companies that were public for more than one year were not eligible to submit draft registration statements for nonpublic review. The new guidance now permits nonpublic review regardless of how long a company has been a public company, which would be particularly useful for non-WKSI issuers. Such issuers (whose registration statements are not automatically effective upon filing) can initially submit their registration statements, including shelf registration statements, for nonpublic review when they conduct follow-on offerings.
The SEC will continue to limit its nonpublic review to the initial submission. Accordingly, amendments to registration statements responding to staff comment must be publicly filed.
An issuer submitting an initial draft registration statement for nonpublic review should confirm in its cover letter that it will file publicly its registration statement and draft submission at least two business days prior to any requested effective time and date, which is a change from the previous 48-hour requirement. The SEC noted that it will consider reasonable requests to expedite this two business-day period and encourages issuers and their advisors to review their transaction timing with the staff of the SEC.
De-SPAC Transactions
The expanded accommodations also apply to de-SPAC transactions. Previously, a SPAC usually had to file its de-SPAC registration statement publicly if the filing occurred more than one year after the SPAC’s IPO. Under the new guidance, the target company of a de-SPAC transaction may confidentially submit a registration statement as if it were conducting an initial public offering, provided that the SPAC survives as the public company and the target company is otherwise independently eligible to submit a draft registration statement. This approach reflects the SEC’s view that a de-SPAC transaction is the functional equivalent of the target company’s IPO.
Certain Omissions and Staff Processing
In a return to a prior accepted practice, the SEC will again permit issuers to omit the names of underwriters from initial draft submissions (despite the requirements under Regulation S-K Items 501 and 508), as long as the underwriters are disclosed in subsequent submissions and public filings, which would enable the registration process to start sooner.
In addition, the SEC has indicated that it will not delay its review process if an issuer omits certain financial information, so long as such issuer reasonably believes that such omitted financial information will not be required at the time the registration statement becomes publicly available.
In any of these circumstances, issuers must continue to take all steps to ensure that their draft registration statements are substantially complete when submitted.
Additional Information
The SEC will address any questions related to the use of such expanded processing procedures sent to [email protected].
For additional information, please see the following documents:
- Voluntary Submission of Draft Registration Statements – FAQs
- Fixing America’s Surface Transportation (FAST) Act – C&DIs
- Securities Act Forms – C&DIs
- Jumpstart Our Business Startups Act Frequently Asked Questions – Generally Applicable Questions on Title I of the JOBS Act
- Jumpstart Our Business Startups Act Frequently Asked Questions – Confidential Submission Process for Emerging Growth Companies
Conclusion
The key effect of these accommodations is to expand the pool of issuers that can utilize the nonpublic review process, reflecting the SEC’s willingness to expedite the registration process and facilitate capital formation, as stated in the release.
Please view additional information on Gibson Dunn’s Securities Regulation and Corporate Governance Monitor Blog:
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Andrew L. Fabens – New York (+1 212.351.4034, [email protected])
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Peter W. Wardle – Los Angeles (+1 213.229.7242, [email protected])
Securities Regulation and Corporate Governance:
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Thomas J. Kim – Washington, D.C. (+1 202.887.3550, [email protected])
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