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The U.S. Securities and Exchange
Commission said on Thursday it was expanding the Jumpstart Our
Business Startups (JOBS) Act, by allowing all public companies
to file confidentially prior to initial public offerings, in a
move designed to revitalize the IPO market.
This is the first major policy announcement by new SEC
Chairman Jay Clayton, in an effort to help companies raise money
more readily.
Under current law, all publicly-traded companies with annual
gross revenues of $1 billion or less can already file
confidential draft IPO paperwork with the SEC.
These companies, known as emerging growth companies (EGCs),
won this perk in the 2012 JOBS Act, as part of an effort to
lower regulatory burdens and give them time to work out kinks
with the SEC before unveiling IPO paperwork publicly and
pitching to investors.
The new rule, which will take effect from Saturday, July 10,
would be available for IPOs as well as most offerings made in
the first year after a company has entered the public reporting
system, the SEC said. (bit.ly/2sWW212)
The confidential review process after the IPO reduces the
potential for lengthy exposure to market fluctuations, the SEC
said.
Clayton has said he wants to reverse the steep decline in
IPOs and give individual investors more access to smaller,
successful companies.
(Reporting by Sarah N. Lynch in Washington, Arunima Banerjee
and Sangameswaran S in Bengaluru; editing by Sandra Maler, G
Crosse)