On August 17, 2017, the Securities and Exchange Commission (SEC) updated its June 29, 2017 guidance on the confidential review process for draft registration statements and financial information that may be omitted from draft registration statements.
Under the new guidance, any issuer may omit interim financial information from a draft registration statement to the extent the issuer reasonably believes that the interim financial information would not need to be included in the registration statement when it is publicly filed, or for Emerging Growth Companies (EGCs), at the time of the offering. Under earlier guidance, only EGCs were entitled to exclude financial information for periods that would not need to be included in the registration statement at the time of the offering. The relief extends to all draft registration statements by EGCs and non-EGCs using the confidential review process. The guidance does not alter the financial statement requirements for registration statements that are publicly filed.
The new guidance also allows issuers that have filed a registration statement to switch to a non-public review process for its pre-effective amendments, provided the issuer is otherwise able to participate in the confidential review process and agrees to publicly file all draft amendments in accordance with the confidential review process requirements.
The SEC’s new guidance provides issuers with more flexibility in submitting registration statements for confidential review and eliminates the additional burden and expense related to financial statements (and related MD&A) that will not be used in the publicly filed disclosure.
The SEC guidance is effective immediately. The SEC is also making available to issuers an e-mail address where issuers may submit questions about their eligibility to use the expanded processing procedures.
To access the SEC’s new guidance, follow this link (see questions 101.04 and 101.05).