Introduction

On March 3, 2025, the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”) announced significant enhancements to the ability of issuers to submit draft registration statements (“DRSs”) for non-public review with the Staff. Confidential DRS review benefits eligible companies by providing them the ability to work through the often lengthy registration process outside of the public eye.

This alert provides an overview of the changes, practical implications for issuers, and key considerations for compliance.

Background

The DRS concept was originally introduced by the Jumpstart Our Business Startups Act in 2012. The SEC’s process for confidential DRS submissions was initially available primarily to Emerging Growth Companies (“EGCs”) and qualifying foreign private issuers (“FPIs”) and was intended to facilitate initial public offerings (“IPOs”). In 2017, the SEC broadened the process to allow all first-time issuers, regardless of company size, to benefit from confidential review in the IPO context and any follow-on offerings within the first year following the effective date of the issuer’s IPO registration statement or Exchange Act Section 12(b) registration statement.

Key Updates

1. Broadened Form Eligibility for Initial Exchange Act Registrations

• What’s New: Issuers may now submit the initial registration of a class of securities on Forms 10, 20-F, or 40-F for nonpublic review under Exchange Act Section 12(g). Previously, only initial registration statements under the Securities Act or Exchange Act Section 12(b) (i.e., for listings on a national securities exchange) were permitted.
• Implication: This change expands the registration routes that may receive the benefit of confidential review, providing issuers with increased flexibility in structuring their offerings.

2. Extended Eligibility Period for Subsequent Submissions

• What’s New: Under the previous regime, additional confidential submissions were limited to a 12 month window following the effective date of the issuer’s initial Securities Act registration statement or Exchange Act Section 12(b) registration statement. For both private and public issuers, the new rule removes this time constraint, including for shelf offerings on Form S-3/F-3 and business combinations and exchange offers on Form S-4/F-4.
• Implication: Issuers that have been subject to reporting requirements in excess of one year can now benefit from the confidential review process for subsequent offerings. This can be particularly advantageous for non-WKSI issuers that do not have the benefit of automatically effective registration statements. Note that in such subsequent offerings, the Staff’s confidential review is limited to the initial DRS submission and responses to any Staff comments will need to be made with a public filing, not a revised DRS.

3. Accommodations in De-SPAC Transactions

• What’s New: For de-SPAC transactions in situations where the SPAC is the surviving entity (i.e., SPAC-on-top structure), the process now allows issuers to submit a DRS on Form S-4/F-4 for nonpublic review as if it were an initial Securities Act registration statement (i.e., an initial public offering), so long as the co-registrant target is otherwise eligible to submit a DRS.
• Implication: This change provides enhanced clarity and predictability for sponsors and target companies involved in SPAC transactions. Combined with the broadened form eligibility, companies engaging in de-SPAC transactions can better align their filing strategy with their broader business objectives.

4. Flexibility on Underwriter Disclosures and Certain Financial Information

• What’s New: Issuers are permitted to omit underwriter names that would otherwise be required by Items 501 and 508 of Regulation S-K from the initial DRS submission. However, the information must be included in subsequent submissions and public filings. The Staff also noted that an issuer may omit any financial information that it reasonably believes will not be required at the time the registration statement is publicly filed.
• Implication: This flexibility enables issuers to initiate the review process without finalizing underwriting arrangements and certain financial disclosures, potentially expediting the overall process.

Compliance Considerations for Issuers

1. Cover Letters: Consistent with existing practice, issuers must confirm in a cover letter accompanying confidential submissions that public filings of the registration statement and nonpublic DRS submissions will occur within the required timeframes (at least 15 days before a road show or two business days prior to any requested effective date). The SEC’s announcement notes that the Staff will consider reasonable requests to expedite this two business-day period and encourages issuers and their advisors to review their transaction timing with the Staff assigned to review the filing.
2. Public Filings: At the time of the public filing, issuers must ensure that any omitted information (e.g., underwriter names or financial information) is properly disclosed, and that all regulatory timelines (such as automatic effectiveness periods for Exchange Act registrations) are met.
3. Timing Considerations: Issuers submitting Exchange Act registration statements on Forms 10, 20-F, or 40-F must also consider timing factors, as applicable 30-day or 60-day filing periods must run prior to effectiveness. Under Exchange Act Section 12(b), a registration statement on Forms 10, 20-F, or 40-F goes effective automatically 30 calendar days after the SEC receives approval of the issuer’s listing from a national securities exchange. Under Exchange Act Section 12(g), a registration statement on Forms 10, 20-F, or 40-F goes effective automatically 60 calendar days after the issuer files its registration statement.
4. Monitoring and Feedback: The Staff will monitor the process and may adjust procedures based on market practices. Issuers should plan for potential follow-up and be prepared to respond to Staff comments promptly. In addition, the Staff has published a dedicated email address for further questions about the new policy: [email protected].
5. EGC and FPI Compliance: Issuers that qualify as EGCs may choose to continue submitting DRSs for confidential review under the current EGC process, as detailed in previous Staff FAQs. Similarly, FPIs can either follow the EGC procedures (if eligible) or adhere to the guidance set forth in the Staff’s statement regarding non-public submissions by FPIs issued on May 30, 2012.

Conclusion

The SEC’s enhanced accommodations represent a significant development in the confidential review process for public offerings. By broadening form eligibility, extending the timing for subsequent confidential submissions, accommodating de-SPAC transactions, and allowing flexibility on underwriter disclosures, the SEC has taken a concrete step in its aims to facilitate capital formation without compromising the integrity of the registration process. Issuers should consider these changes in the context of their overall transaction timelines and compliance strategies. We recommend consulting with counsel to fully leverage these accommodations while ensuring adherence to SEC requirements.

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