SEC Expands Access to Nonpublic Review of OfferingsBy
A reduction in the number of private companies filing to go public has been cited for several policy initiatives this year, including a quiet extension of one provision in the Jumpstart Our Business Startups (JOBS) Act.
In June, the Securities & Exchange Commission (SEC) Division of Corporation Finance announced that all companies—not just the emerging growth companies created by the JOBS Act—could submit draft registration statements relating to initial public offerings for review on a nonpublic basis. This process will be available for initial public offerings (IPOs) as well as most offerings made in the first year after a company has entered the public reporting system.
The nonpublic review in these cases will be limited to the initial submission; an issuer responding to staff comments on such a draft registration statement will have to provide a public filing, not a revised draft registration statement. “This is an important step in our efforts to foster capital formation, provide investment opportunities, and protect investors,” Bill Hinman, director of the Division of Corporation Finance, said. “This process makes it easier for more companies to enter and participate in our public company disclosure-based system.”