The U.S. Securities and Exchange Commission (SEC) has recently implemented a significant change that broadens the scope for companies to file confidential registration statements. What was once a privilege limited primarily to emerging growth companies (EGCs) has now become available to all companies preparing for public offerings, including initial public offerings (IPOs), secondary or follow-on offerings within the first year of becoming publicly reporting entities, and Section 12(b) Exchange Act registrations. This development offers a strategic advantage, enhancing privacy and flexibility for firms navigating the complex journey of public capital markets.

What Are Confidential Registration Statements?

A confidential registration statement is essentially a draft registration document submitted to the SEC that is not immediately made public. Traditionally, companies would file registration statements publicly from the outset, exposing sensitive business and financial details to competitors, customers, and the general public. The confidential filing process allows companies to keep these documents under wraps during the SEC’s review phase, only disclosing them once the offering becomes imminent or a public filing is required.

Previously, only EGCs under the Jumpstart Our Business Startups (JOBS) Act enjoyed this confidential filing right, along with certain first-time Regulation A+ filers. But with the SEC’s recent expansion, this confidentiality feature is now accessible to all companies regardless of size or stage, opening the door for greater control over information flow.

How Does Confidential Filing Work?

Companies may select a confidential setting in the SEC’s EDGAR system—a digital platform used for filing registration statements and other disclosure documents. By choosing this setting, a company can submit draft registration statements privately, limiting early public exposure. The process follows detailed filing instructions already outlined in the EDGAR Filing Manual, initially created for EGCs but now applicable universally.

Once a company is ready to proceed publicly, it must satisfy the requirement to disclose all previously confidential information. This can be done by:

Filing all prior confidential materials as exhibits to the public (non-confidential) registration statement, or
Simply changing the EDGAR filing status of prior documents from confidential to public, without the need for refiling the documents themselves.

This flexibility simplifies managing disclosure requirements and mitigates the risk of inadvertent information leaks.

What Are the Benefits for Companies?

Enhanced Privacy During Review: Companies can protect sensitive corporate and financial details from early public scrutiny, reducing competitive risks and safeguarding strategic plans until closer to the offering date.

Streamlined Compliance: Because confidential filings carry the same content and financial statement requirements as public ones, companies maintain rigorous disclosure standards while benefiting from controlled information release.

Delayed Public Filing Fees: Filing fees, which are associated with the registration process, only become due when the registration statement is publicly filed. This adjustment can help companies with cash flow management during early stages of the public offering process.

No Mandatory Signatures Initially: Unlike public filings, confidential registrations do not require the signatures of corporate officers or directors, simplifying execution in the preliminary stages.

Greater Strategic Flexibility: Companies planning follow-on offerings or newly public firms can use confidential filings to prepare documentation without alerting market participants prematurely, enabling better timing and execution strategies.

Practical Considerations

While confidential filings offer many advantages, companies must remain mindful of still meeting all SEC disclosure and financial reporting standards. For instance, companies can exercise provisions, such as those allowing omission of historical financial statements under certain legislative acts (e.g., Section 71003 of the FAST Act), equally in confidential filings.

Moreover, transitioning confidential documents to public status is straightforward, giving companies the ability to decide when, and how much, information becomes publicly accessible without redundant paperwork.

Conclusion

The SEC’s expanded rules permitting confidential registration statements for all companies mark a substantial progression toward more adaptable and company-friendly securities regulation. By unlocking secrecy in the initial phases of public filings, firms gain a critical tool to manage information sensitivity, optimize timing, and reduce administrative burdens.

As the SEC updates the EDGAR manuals to officially reflect these changes, companies should consider incorporating confidential filing strategies into their public offering plans—leveraging this regulatory flexibility to protect their interests as they seek capital from public markets.

For legal counsel and companies looking to understand and navigate these new rules, consulting experienced securities attorneys can ensure compliance and maximize the benefits offered by confidential registration statements.

Author: Laura Anthony, founding partner of Legal & Compliance, specializing in corporate, securities, and business transactions law.