The SEC's Division of Corporation Finance has issued a set of frequently asked questions on the Jumpstart Our Business Startups (JOBS) Act. Corp Fin had previously announced procedures for emerging growth companies to confidentially submit registrations under the JOBS Act. The FAQs provide additional information about how the division and emerging growth companies should handle confidential submissions under Securities Act Section 6(e), as added by the JOBS Act, which was signed into law April 5, 2012.
A key question was which registration statements are eligible for confidential review. Corp Fin stated that under the definition of “initial public offering date” contained in JOBS Act Section 101(c), a company may confidentially submit its registration statement if it is an emerging growth company and its initial public offering date has not occurred. Similarly, a company that has had registered sales of securities under the Securities Act other than for common equity securities also may confidentially submit its registration statement if it is an emerging growth company. Foreign private issuers that are emerging growth companies may use the same confidential submission process as domestic companies.
Although a confidential submission must be filed 21 days before a road show, Corp Fin said it would not object if an emerging growth company elects not to treat test-the-waters communications done in reliance on Securities Act Section 5(d) as a road show in the Section 6(e) context. The FAQs reiterate that these communications are restricted to interactions between an emerging growth company and QIBs or institutional accredited investors.
Corp Fin further stated that it would not object if a company that qualifies as an emerging growth company, and was already in registration at the time the JOBS Act was enacted, switched to the confidential submission process to make future amendments without withdrawing its registration statement and submitting a new confidential draft registration. Corp Fin advised these companies to contact SEC staff to coordinate the switch.
An emerging growth company need not invoke Rule 83 to ensure confidentiality. No filing fee is due upon making a confidential submission under Section 6(e) because the draft registration is not a filing of a registration statement. Corp Fin also cautioned that the FAQs are neither rules nor have they been approved by the Commission.
Corp Fin previously announced procedures for emerging growth companies to confidentially submit registrations under the JOBS Act. Specifically, an emerging growth company that has not sold its common equity securities pursuant to an effective registration statement under the Securities Act may submit a confidential draft registration to the SEC for review. The Commission stated its plan to establish an electronic system for handling these requests. But until the system is in place, the division asked that eligible companies submit draft registrations in text searchable PDF files on CD or DVD. Paper submissions must not be stapled or bound together. Submissions also should include a transmittal letter that confirms the company’s status as an emerging growth company.