The SEC (Sort of) extends EGC benefits to all issuers

On June 29, 2017, the Securities and Exchange Commission (SEC) extended to all issuers some of the benefits that Congress granted to emerging growth companies (EGCs)1 in 2012 under the Jumpstart Our Business Startups Act (JOBS Act).2 By way of background, the JOBS Act effectively created a two-tiered system for US IPOs, easing the path for EGCs to become public companies while maintaining restrictions for non-EGCs. Furthermore, a submission of a draft registration statement is not required to be signed by the registrant or by any of its officers or directors, nor is it required to include the consent of auditors and other experts, as it is not filed with the SEC.6 In addition, an issuer submitting a draft registration statement for non-public review may not make a public announcement about its offering in reliance on the Rule 134 safe harbor but may use the Rule 135 safe harbor instead.7 Non-Required Financial Statements The SEC will accept and review a registration statement that omits financial statements and related information that the issuer reasonably believes will not be required at the time the registration statement is publicly filed. The ability to submit a registration statement confidentiality for the 12 months following effectiveness of an initial registration statement is a welcome development for issuers, but the limitation to only the first submission of a registration statement may result in issuers seeking to avoid filing an amendment to a registration statement selected for review and, instead, they may try to respond to SEC comments via correspondence filings only. [...]the SEC relief results in disparate treatment for a company whose registration statement is selected for review and one that is not-something that is not within an issuer's control. [...]the SEC will have to do additional work to the extent its goal is to ease capital formation by non-EGCs as well as EGCs.