* SEC says two companies already sent confidential docs
* Agency resorts to paper collection system for now
* Some sections of the new law go into effect right away
* Others require SEC to write new rules, seek comment
By Sarah N. Lynch
WASHINGTON, April 11 Two companies have rushed
to take advantage of a new law signed by President Barack Obama
last week that aims to help streamline the initial public
offering process by scaling back certain regulatory
Officials at the U.S. Securities and Exchange Commission
said on Wednesday that the agency has already received two
confidential draft registration statements.
They are the first time anyone has taken advantage of a
provision in the law that lets companies keep such IPO-related
filings private until just 21 days before they launch a road
show and start soliciting interest from investors.
Both filings came in last Thursday, the same day Obama
signed the bill into law.
Because the SEC has not yet set up a secure electronic
filing system to protect confidentiality, it cannot use its
standard electronic "Edgar" system and for now is forced to
receive the documents either on a computer disk, or on paper.
"Although a world without Edgar is hard for many of us to
imagine, we are up and running without Edgar in this process and
we're back to paper," said Shelley Parratt, a deputy director in
the SEC's Corporation Finance Division.
Parratt was among the SEC staff to speak about the bill in a
one-hour briefing sponsored by the Practising Law Institute. "We
prefer electronic. We are trying to avoid paper to the extent
that we can."
The enactment of the start-ups bill, dubbed the JOBS Act,
puts a whole new workload on the SEC even as the agency
struggles to finalize many of the most substantive rules
required by the 2010 Dodd-Frank Wall Street oversight law.
The JOBS Act aims to help make it easier and more affordable
for smaller companies to go public when they are ready, and also
to allow them to stay private longer if they feel the need to
raise more capital before taking the plunge with an IPO.
SEC staff explained on Wednesday that some aspects of the
bill take effect immediately, while others will not go into
effect until the SEC is able to write the required rules to
Even with the self-executing provisions, however, the SEC
still needs to be in a position to make sure everything runs
"We had already been working flat out when the JOBS Act came
up," said Meredith Cross, the director of corporation finance at
the SEC. "Everyone has rallied. Now that Congress has passed the
act, we are hard at work to get it implemented and make it a
Provisions already in effect include the so-called "IPO
onramp" which allows smaller companies with annual revenues
below $1 billion a five-year period to be exempt from certain
Other sections of the bill, however, require rulemaking
first. One such section would establish a new regulatory
framework to permit crowdfunding - a new capital-raising
strategy in which investors can buy small takes in a private
start-up over the Internet.
Also requiring rules is a provision that would lift a
general advertising ban for private offerings as long as the
offerings are made to certain accredited, more sophisticated
The law gives the SEC 90 days to complete those rules.
On Wednesday, even before any rule proposals have been
written, the SEC started soliciting comments from the public in
advance just as the agency did when it faced the daunting task
of writing nearly 100 new rules for Dodd-Frank.
The SEC also said it plans to publicly post meetings that
agency officials have with any lobbyists or other interested
players on the JOBS Act rules.