U.S. SEC Expands Accommodations for Confidential Draft Registration Statements

On March 3, 2025, the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the SEC) issued new guidance, effective immediately, expanding the accommodations available for companies that submit draft registration statements (DRS) for non-public review with the Staff.

The updated guidance significantly expands the availability of the confidential DRS review program and represents a step taken by the SEC under the leadership of Acting Chair Mark Uyeda to remove regulatory burdens on public companies and those looking to go public.

Among other things, the updated guidance:

• Expands the types of forms eligible to be submitted for confidential review;
• Removes the one-year time-based limitation on the use of DRS submissions for offerings following an IPO;
• Provides accommodations for certain de-SPAC transactions; and
• Allows for the omission of underwriter names in an initial submission to the Staff.

A more in-depth review of the changes is provided below.

Read the guidance.

Background on the DRS Program

In 2012, the JOBS Act introduced the DRS concept, permitting Emerging Growth Companies (EGCs) to submit registration statements to the Staff for confidential, non-public review. Consistent with the JOBS Act’s overarching goal of facilitating public offerings by removing regulatory hurdles, the DRS program was intended to make it easier for EGCs to conduct initial public offerings (IPOs) by shielding from public view potentially sensitive information during the early stages of the IPO process.

In 2017, the Staff expanded the availability of the DRS program for non-EGC issuers. Through informal guidance, the Staff announced that it would accept DRS submissions from all issuers in connection with IPOs under the Securities Act and Section 12(b) of the Exchange Act, as well as subsequent offerings (“follow-on offerings”) within the first year after a company entered the SEC reporting system.[1] The Staff also adopted a policy that it would process DRS submissions that omit financial information the issuer “reasonably believes . . . will not be required at the time the registration statement is publicly filed.”[2]

In recent months, Acting SEC Chair Mark Uyeda has made public statements about a desire to focus the SEC on “its narrow mission to facilitate capital formation, while protecting investors and maintaining fair, orderly, and efficient markets.”[3] In a statement accompanying the updated guidance, the Staff said, “These enhanced accommodations will further support capital formation while retaining investor protections available to purchasers in public offerings.”[4]

New DRS Guidance

As noted above, the new Staff guidance expands the accommodations available under the DRS review program.

Expansion of the DRS Program for Initial Registration Statements

Previously, any company could confidentially submit a DRS relating to an initial registration under either the Securities Act or Section 12(b) of the Exchange Act. Section 12(b) registration is required for any class of securities that is listed on a national securities exchange (e.g., NYSE or Nasdaq)).

The new guidance expands the availability of the DRS program to cover the initial registration of a class of securities under Exchange Act Section 12(g), which is generally required when private companies pass certain quantitative thresholds of assets and shareholders.[5]

As a result of this change, the DRS program will be available for initial registration statements under Section 12(g) of the Exchange Act on Forms 10, 20-F, or 40-F.

Consistent with historical practice, the Staff will conduct a confidential review of these submissions, provided the company confirms in a cover letter to the Staff that it will publicly file its registration statement and non-public draft submissions at least 15 days prior to any road show or, in the absence of a road show, at least 15 days prior to the requested effective date of the registration statement. The Staff will continue to publicly release Staff comment letters and issuer responses to those letters on EDGAR no earlier than 20 business days following the effective date of a registration statement.

Expansion of the DRS Program for Follow-On Offerings

Under the Staff’s prior guidance, the DRS program was available for follow-on offerings within 12 months following the effective date of company’s initial Securities Act registration statement or Exchange Act Section 12(b) registration statement.

In a significant change, going forward, the Staff will accept for non-public review a subsequent DRS for any offering under the Securities Act or registration of a class of securities under either Section 12(b) or Section 12(g) of the Exchange Act, regardless of how much time has passed since the company became public.

Notably, in these cases, the Staff’s confidential review will be limited to the initial submission. Any response to Staff comments and subsequent amendments should be filed publicly.

The guidance notes that any company submitting a subsequent DRS for non-public review should confirm in its cover letter that it will file its registration statement and non-public draft submission in a manner to ensure they are publicly available on the EDGAR system at least two business days prior to any requested effective time and date.[6]

In addition, companies will need to publicly file Exchange Act registration statements on Forms 10, 20-F, and 40-F so that the full 30- or 60-day period, as applicable, will run prior to effectiveness.

New Accommodations for De-SPAC Transactions

In a new development, the Staff will permit companies to submit a DRS (on Forms S-4 or F-4) for business combination transactions between special purpose acquisition companies (SPACs) and private operating companies (“de-SPAC transactions”). The Staff treats de-SPAC transactions as if they were IPO filings in cases where the target co-registrant would otherwise be independently eligible to submit a DRS. This development brings further clarity to prior SEC rulemaking and guidance, which required the private operating company in a de-SPAC transaction to be, in some instances, a co-registrant for purposes of the registration statement filed in connection with a de-SPAC transaction. The Staff noted that this is because a de‑SPAC transaction “is the functional equivalent of the target’s initial public offering.”

Omission of Underwriter Names in Initial Submissions

Items 501 and 508 of Regulation S-K require companies to provide the names of any underwriters on the cover page and “plan of distribution” section of a registration statement. Often, however, this requirement can delay the ability of a company to begin the SEC review process because this information may not be available in the early stages of a potential offering.

In the new guidance, the Staff states that companies may omit this identifying information in an initial submission, provided that companies include the name of any underwriters in subsequent submissions and public filings.

Updated Foreign Private Issuer (FPI) Guidance

Consistent with the historical approach to the DRS program, the new guidance provides the FPIs will be able to take advantage of both the statutory provisions, which afford EGCs with DRS accommodations, and the informal Staff-provided accommodations.

Conclusion

The DRS program has been a helpful tool for companies engaging in offers and sales of securities. It enables companies to begin the SEC registration process in a confidential manner, often protecting commercially sensitive information. This is especially useful in volatile equity markets or when companies are contemplating alternative tracks for capital raising. In the event a company abandons a public offering, the DRS submissions and correspondence with the SEC can remain private. This process has provided early-stage companies with significant protections in their path to going public. The Staff’s new guidance expands these protections to companies that may be testing markets and could significantly enhance companies’ ability to position themselves well to access capital markets.

[1] See Division of Corporation Finance Announcement, Draft Registration Statement Processing Procedures Expanded (August 17, 2017).

[2] See Id.

[3] SEC.gov | Remarks at the Florida Bar’s 41st Annual Federal Securities Institute and M&A Conference.

[4] SEC.gov | SEC Staff Facilitates Capital Formation for Companies Planning Public Offerings.

[5] Section 12(g) of the Exchange Act requires registration of any class of equity securities held by more than 2,000 record holders or more than 500 record holders who are not accredited investors, where the issuer has assets of at least $10 million as of the end of its most recent fiscal year, and for foreign private issuers, where at least 300 of the record holders are residents of the United States.

[6] This two-business-day period is consistent with the two business days in Rule 461 for requesting acceleration of the effective date. The guidance also notes that the Staff will consider reasonable requests to expedite this two-business-day period.