Confidential Submission Process for Emerging Growth Companies — December 21, 2015

These FAQs address questions relating to the confidential submission of registration statements for review pursuant to new Securities Act Section 6(e). Section 6(e) provides that an emerging growth company may confidentially submit to the Commission a draft registration statement for confidential, non-public review by the Commission staff prior to public filing, provided that the initial confidential submission and all amendments thereto shall be publicly filed not later than 15 days before the date on which the issuer conducts a road show, as such term is defined in Securities Act Rule 433(h)(4).

For information about the procedures for confidential submissions, please refer to Volume II of the EDGAR Filer Manual.

Which registration statements are eligible to be submitted on a confidential basis under Section 6(e)?

Section 6(e) provides that any emerging growth company, “prior to its initial public offering date,” may confidentially submit a draft registration statement for confidential, non-public review.

The term “initial public offering date” is defined in Section 101(c) of the JOBS Act as the “date of the first sale of common equity securities of an issuer pursuant to an effective registration statement under the Securities Act of 1933.” As a result, a company that comes within the definition of an emerging growth company may confidentially submit a registration statement so long as its initial public offering date has not occurred. The phrase “date of the first sale” in the definition of initial public offering date is not limited to the date of a company’s initial primary offering of common equity securities for cash. It could also include an offering of common equity pursuant to an employee benefit plan registered on a Form S-8 as well as a selling shareholder’s secondary offering registered on a resale registration statement.

In addition, a company that has had Securities Act-registered sales of securities other than common equity securities can qualify to use the confidential submission process as long as it otherwise qualifies as an emerging growth company.

Is the confidential submission process available for Form 10 or Form 20-F Exchange Act registration statements?

No. As the confidential submission process is required by Section 6(e) of the Securities Act, it applies only to the Securities Act registration process, so it would not be available for Exchange Act-only registration.

Can foreign private issuers use the confidential submission process in Section 6(e)?

If a foreign private issuer comes within the definition of an emerging growth company, it can use the confidential submission procedure to the same extent as a domestic company. A foreign private issuer that is not an emerging growth company may qualify to submit a draft registration statement on a non-public basis for staff review, if it meets the requirements for non-public submissions as set forth in the Division’s policy on Non-Public Submissions from Foreign Private Issuers. Foreign private issuers eligible to submit draft registration statements either as emerging growth companies or pursuant to the Division’s policy must submit their draft registration statements in the same manner and to the same address as domestic companies that are emerging growth companies (please see the Instructions for Submitting Draft Registration Statements for Confidential/Non-public Review). Please note that the email address previously available for submissions by foreign private issuers is no longer active.

Will an emerging growth company need to submit its draft registration statement under cover of a Rule 83 request to preserve confidentiality?

No.

When is the Securities Act registration filing fee due if an emerging growth company chooses to use the confidential submission process?

The filing fee is due when the registration statement is first filed publicly on EDGAR. The statutory provision requiring payment of a registration fee under the Securities Act, Section 6(b), applies at the “time of filing a registration statement.” The confidential submission of a draft registration statement under Section 6(e) is not a filing of a registration statement, so the filing fee is not due at that time.

Does the confidential submission of the draft registration statement constitute a filing for purposes of the prohibition in Section 5(c) against making offers of a security in advance of filing a registration statement?

No, since the confidential submission is not the filing of a registration statement, it would not count as the filing of a registration statement for purposes of Section 5(c).

Are there specific requirements for a “draft registration statement”?

Section 6(e) does not specify what needs to be included in a “draft registration statement.” As the confidential submission of the draft registration statement does not constitute a “filing” for purposes of Securities Act Sections 5(c) and 6(a), it is not required to be signed or to include the consent of auditors and other experts. In addition, as is the case with publicly filed registration statements, emerging growth companies may omit certain limited information from their initial submissions in reliance on existing rules and regulations relating to the content of filed registration statements, such as the public offering price or other offering-related information. We expect draft registration statements to be substantially complete at the time of initial submission, including a signed audit report of the registered public accounting firm covering the fiscal years presented in the registration statement and exhibits. Companies conducting an initial public offering are permitted to omit financial information for historical periods if they reasonably believe such omitted periods will not be required to be included in the filing at the time of the offering, so long as the registration statement is amended prior to distributing any preliminary prospectus so that it contains all financial information required at the time of amendment. See FAST Act Compliance and Disclosure Interpretations Question 1 for additional guidance.

How do you calculate the 15 days before the road show, and how does this interact with other communications, such as the test-the-waters communications permitted under Securities Act Section 5(d)?

The confidential submissions have to be publicly filed at least 15 days before the issuer conducts a “road show” as defined in Rule 433(h)(4). That rule defines “road show” as “an offer…that contains a presentation regarding an offering by one or more members of the issuer’s management…and includes discussion of one or more of the issuer, such management, and the securities being offered.”

In a traditional underwritten public offering that does not include communications made in reliance upon new Section 5(d), the road show should be easy to identify – it would be those meetings traditionally viewed as the road show when the emerging growth company and underwriters begin actively marketing the offering. In that case, the company should estimate when it expects to begin the road show and publicly file its confidential submissions at least 15 days before that date. As is the case now, it is helpful if the company keeps the staff that is reviewing the registration statement informed about the company’s expected schedule.

It is possible that there may be meetings with potential investors under the new test-the-waters communications provisions that could also be viewed as coming within the Rule 433(h)(4) definition of road show, which could theoretically trigger a requirement to file the registration statement 15 days before those meetings. New Section 5(d), however, specifically contemplates that test-the-waters communications may take place before filing a registration statement.

In order to read these various provisions in a consistent fashion so as to allow test-the-waters communications before a registration statement is filed and have the registration statement publicly filed at least 15 days before the commencement of the road show, we will not object if an emerging growth company does not treat test-the-waters communications conducted in reliance on new Section 5(d) as a road show for purposes of Section 6(e). Please note that Section 5(d) test-the-waters communications are limited to communications with QIBs and institutional accredited investors.

If an emerging growth company does not conduct a traditional road show, when must the confidential draft submissions be publicly filed? Does it matter if the company will conduct test-the-waters communications in reliance upon Section 5(d) or will engage in other activities that may come within the definition of “road show”?

If the emerging growth company does not conduct a traditional road show and does not engage in activities that would come within the definition of road show, other than test-the-waters communications that comply with Section 5(d), then its registration statement and confidential submissions should be filed publicly on EDGAR no later than 15 days before the anticipated date of effectiveness of the registration statement. If the emerging growth company does not conduct a traditional road show, but will have communications that would come within the definition of road show and do not meet the conditions for test-the-waters communications in Section 5(d) – for example, the company holds an investor meeting to market the offering that is not limited to QIBs or institutional accredited investors – then the registration statement would need to be filed at least 15 days before those communications.

What does the emerging growth company have to publicly file 15 days before its road show, and what form does that filing take?

Section 6(e) provides that the emerging growth company has to publicly file the initial confidential submission and all amendments thereto not later than 15 days before it conducts its road show. As is the case for all registration statements filed under the Securities Act, the first filed registration statement should be complete, including signatures, signed audit reports, consents, exhibits and filing fees.

An issuer that qualifies as an emerging growth company is in registration at the time of the enactment of the JOBS Act. Can the issuer switch to the confidential submission process for future amendments?

Yes. If an emerging growth company is eligible to submit its registration statement on a confidential basis, we will not object if a company that was in registration at the time of enactment of the JOBS Act switches to the confidential submission process for future amendments rather than withdrawing the registration statement and confidentially submitting a new draft registration statement for confidential, non-public review. A company should contact its review team to coordinate the process if it would like to make this switch.

An emerging growth company initially files its IPO registration statement on EDGAR, and then switches to the confidential submission process for subsequent amendments. Will the initial public filing, which preceded the confidential submissions, satisfy the requirement to publicly file the registration statement not later than 15 days before the road show?

No. All confidential submissions must be filed on EDGAR at least 15 days before the road show.

If an emerging growth company submits its draft registration statement on a confidential basis, may the company subsequently make a public communication about its offering in reliance on the Securities Act Rule 134 safe harbor?

No. The Rule 134 safe harbor is not available until the issuer files a registration statement that satisfies the requirements of Rule 134. The confidential submission of a draft registration statement does not constitute the filing of a registration statement.