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| SEC expands confidential review process for draft registration statements, now available for all Securities Act and Exchange Act registrations.New policy removes “initial filing” limitation, allowing both private and public companies to submit draft registration statements confidentially.The policy clarifies accommodation for de-SPAC transactions.Underwriter details may now be omitted from initial draft submissions, but must be included in later drafts and public filings. |
On March 3, 2025, the Securities and Exchange Commission’s Division of Corporation Finance issued new guidance expanding the availability of confidential (nonpublic) review of draft registration statements (DRS).
Background
A DRS is a confidential draft of a registration statement submitted to the SEC for review before a public filing is made, granting issuers flexibility to avoid alerting the public market of the planned offering and sharing sensitive information until a more advanced stage of the offering process, if at all.
The confidential submission process was originally established only for foreign private issuers but was introduced in 2012 under the Jumpstart Our Business Startups Act (JOBS Act) for emerging growth companies (EGCs), allowing them to submit draft registration statements for nonpublic SEC review under Section 6(e) of the Securities Act of 1933, as amended (Securities Act), in order to encourage smaller companies to enter the public markets and streamline the initial public offering (IPO) process.
In 2017, the SEC extended this benefit to all companies—whether or not they qualified as EGCs—when filing:
- an IPO registration statement under the Securities Act;
- an initial registration statement under Section 12(b) of the Securities Exchange Act of 1934, as amended (Exchange Act), when seeking to list securities on a national securities exchange for the first time; or
- an initial submission of a registration statement under the Securities Act during the twelve-month period following the effective date of the IPO registration statement or an issuer’s Exchange Act Section 12(b) registration statement.
The March 2025 guidance extends the benefits of non-public review to all issuers by removing the “initial filing” limitation. Now, both private and public companies can submit a DRS for confidential SEC review in connection with any Securities Act or Exchange Act registration—regardless of whether they are first-time registrants. Affected companies may now forestall market scrutiny of contemplated capital markets transactions triggered by a public SEC filing and, in some cases, during the pendency of the SEC review process, which may offer an advantage for planning and marketing the transaction.
Read the full Alert.