A confidential draft buys time, not permanent secrecy

The record

Section 106(a) of the JOBS Act, enacted 5 April 2012, added subsection (e) to Section 6 of the Securities Act of 1933, letting any emerging growth company, before its initial public offering date, confidentially submit a draft registration statement to the SEC for nonpublic staff review. The statute's original text required the initial confidential submission and all amendments to be publicly filed no later than 21 days before the issuer's road show. The SEC states in its own Enhanced Accommodations for Issuers Submitting Draft Registration Statements page that in 2017 it began accepting voluntary confidential draft submissions from all issuers, not only emerging growth companies.

What the documents establish

Two changes separate the statute's original text from current practice. First, the Fixing America's Surface Transportation Act, effective 4 December 2015, amended Section 6(e) itself; the SEC's own JOBS Act FAQs on the confidential submission process confirm this shortened the public-filing deadline from 21 days to 15 days before a road show, or before the requested effective date if there is no road show. Second, the 2017 accommodation the Enhanced Accommodations page describes is SEC policy, not a statutory amendment; it extends the voluntary nonpublic review practice to companies that do not qualify as emerging growth companies, while Section 6(e) itself still applies by its terms only to emerging growth companies.

The operating read

As an editorial matter, a company weighing confidential submission should not assume its draft stays private indefinitely: both the statutory route and the 2017 policy route require public EDGAR filing well before marketing begins, and the FAQs make clear that submitting confidentially does not exempt the company from eventually filing publicly, only from disclosing early comment letters and mistakes worked out with SEC staff before investors ever see them.

What to check before you decide

Before relying on confidential review timing, check the following against the SEC's current guidance and counsel:

• Does the company qualify as an emerging growth company under the statute, or is it relying on the 2017 policy accommodation instead?
• Is the 15-day, not 21-day, public-filing deadline being used to plan the road show timeline?
• Are all amendments to the draft, not just the initial submission, being tracked for the same public-filing deadline?

Confidentiality here is a scheduling tool tied to a road show, not a permanent exemption from public disclosure before a company markets its offering.