octobre 24 2024
IPO Prospectuses Avoiding and Responding to Common SEC Comments
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Source: LexisNexis
This practice note examines some issues most commonly raised by the staff (Staff) of the U.S. Securities and Exchange Commission's (SEC) Division of Corporation Finance Staff in their comment letters (SEC comment letters) on registration statements filed for initial public offerings (IPOs). It is intended to guide you, as counsel to an IPO company, in assisting your client to adequately respond to some frequently issued comments from the Staff (SEC comments) and efficiently navigate the Staff review process.
This practice note covers SEC comments relevant to IPO prospectuses, addressing general topics like plain English principles and expert consent requirements, as well as specific sections such as the risk factors and management's discussion and analysis of financial condition and results of operations. It includes excerpts from typical SEC comment letters and offers advice to help issuers either avoid these comments or effectively anticipate and respond to SEC concerns.
This practice note does not offer an exhaustive list of the types of comments the Staff may issue. It also does not cover comments on executive compensation disclosure, which have become less relevant since the Jumpstart Our Business Startups Act of 2012 (JOBS Act) allowed emerging growth companies (EGCs) to include less detailed executive compensation disclosures in their registration statements, a practice most EGCs pursuing IPOs have adopted. Additionally, it does not address financial statement and related accounting issues, which are typically handled by the issuer's chief financial officer and independent auditor. The nature of SEC comments can differ significantly between offerings, influenced by factors such as the issuer's industry, the maturity of the business and its financial health. Accordingly, each issuer needs to tailor its IPO prospectus disclosures to accurately reflect its specific facts and circumstances.
Read a preview below, and the full piece here (subscription required).
This practice note covers SEC comments relevant to IPO prospectuses, addressing general topics like plain English principles and expert consent requirements, as well as specific sections such as the risk factors and management's discussion and analysis of financial condition and results of operations. It includes excerpts from typical SEC comment letters and offers advice to help issuers either avoid these comments or effectively anticipate and respond to SEC concerns.
This practice note does not offer an exhaustive list of the types of comments the Staff may issue. It also does not cover comments on executive compensation disclosure, which have become less relevant since the Jumpstart Our Business Startups Act of 2012 (JOBS Act) allowed emerging growth companies (EGCs) to include less detailed executive compensation disclosures in their registration statements, a practice most EGCs pursuing IPOs have adopted. Additionally, it does not address financial statement and related accounting issues, which are typically handled by the issuer's chief financial officer and independent auditor. The nature of SEC comments can differ significantly between offerings, influenced by factors such as the issuer's industry, the maturity of the business and its financial health. Accordingly, each issuer needs to tailor its IPO prospectus disclosures to accurately reflect its specific facts and circumstances.
Read a preview below, and the full piece here (subscription required).
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