SEC Publishes New Guidance on Omission of Historical Financial Information from Registration Statements
On August 17, the SEC updated its compliance and disclosure interpretations (CDIs) to provide additional guidance on what historical financial information may be omitted from registration statements. As discussed in a previous Ticker report, in January 2016, the SEC adopted interim final rules implementing Section 71003 of the Fixing America’s Surface Transportation (FAST) Act of 2015, allowing “emerging growth companies” (EGCs) to omit certain historical financial information from registration statements submitted or filed prior to an offering so long as all required financial information is included at the time of the offering. A new CDI relating to the FAST Act (see Question 1) clarifies precisely what historical financial information may be omitted depending on the relative timing of an EGC’s initial registration statement and commencement of the EGC’s offering. Two new CDIs relating to Securities Act Forms also address the omission of historical financial information from registration statements. While Question 101.04 applies only to EGCs and is identical to the new CDI relating to the FAST Act, it is notable that Question 101.05 applies to companies that are not EGCs and are thus not eligible for the relief afforded by Section 71003 of the FAST Act. Despite the inapplicability of the FAST Act to non-EGCs, Question 101.05 extends similar relief to such companies pursuant to SEC “staff policy.”
For advice on how this new SEC guidance may affect your company, contact a member of Fredrikson & Byron’s Securities Group.