[House Report 114-203]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-203
======================================================================
IMPROVING ACCESS TO CAPITAL FOR EMERGING GROWTH COMPANIES ACT
_______
July 14, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 2064]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2064) to amend certain provisions of the
securities laws relating to the treatment of emerging growth
companies, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improving Access to Capital for
Emerging Growth Companies Act''.
SEC. 2. FILING REQUIREMENT FOR PUBLIC FILING PRIOR TO PUBLIC OFFERING.
Section 6(e)(1) of the Securities Act of 1933 (15 U.S.C. 77f(e)(1))
is amended by striking ``21 days'' and inserting ``15 days''.
SEC. 3. GRACE PERIOD FOR CHANGE OF STATUS OF EMERGING GROWTH COMPANIES.
Section 6(e)(1) of the Securities Act of 1933 (15 U.S.C. 77f(e)(1))
is further amended by adding at the end the following: ``An issuer that
was an emerging growth company at the time it submitted a confidential
registration statement or, in lieu thereof, a publicly filed
registration statement for review under this subsection but ceases to
be an emerging growth company thereafter shall continue to be treated
as an emerging market growth company for the purposes of this
subsection through the earlier of the date on which the issuer
consummates its initial public offering pursuant to such registrations
statement or the end of the 1-year period beginning on the date the
company ceases to be an emerging growth company.''.
SEC. 4. SIMPLIFIED DISCLOSURE REQUIREMENTS FOR EMERGING GROWTH
COMPANIES.
Section 102 of the Jumpstart Our Business Startups Act (Public Law
112-106) is amended by adding at the end the following:
``(d) Simplified Disclosure Requirements.--With respect to an
emerging growth company (as such term is defined under section 2 of the
Securities Act of 1933):
``(1) Requirement to include notice on forms s-1 and f-1.--
Not later than 30 days after the date of enactment of this
subsection, the Securities and Exchange Commission shall revise
its general instructions on Forms S-1 and F-1 to indicate that
a registration statement filed (or submitted for confidential
review) by an issuer prior to an initial public offering may
omit financial information for historical periods otherwise
required by regulation S-X (17 C.F.R. 210.1-01 et seq.) as of
the time of filing (or confidential submission) of such
registration statement, provided that--
``(A) the omitted financial information relates to a
historical period that the issuer reasonably believes
will not be required to be included in the Form S-1 or
F-1 at the time of the contemplated offering; and
``(B) prior to the issuer distributing a preliminary
prospectus to investors, such registration statement is
amended to include all financial information required
by such regulation S-X at the date of such amendment.
``(2) Reliance by issuers.--Effective 30 days after the date
of enactment of this subsection, an issuer filing a
registration statement (or submitting the statement for
confidential review) on Form S-1 or Form F-1 may omit financial
information for historical periods otherwise required by
regulation S-X (17 C.F.R. 210.1-01 et seq.) as of the time of
filing (or confidential submission) of such registration
statement, provided that--
``(A) the omitted financial information relates to a
historical period that the issuer reasonably believes
will not be required to be included in the Form S-1 or
Form F-1 at the time of the contemplated offering; and
``(B) prior to the issuer distributing a preliminary
prospectus to investors, such registration statement is
amended to include all financial information required
by such regulation S-X at the date of such
amendment.''.
Purpose and Summary
H.R. 2064, the ``Improving Access to Capital for Emerging
Growth Companies Act,'' makes changes related to the treatment
of Emerging Growth Companies (EGCs), as defined by the
Jumpstart Our Business Startups Act. H.R. 2064 would reduce the
number of days an EGC must have a confidential registration
statement on file with the Securities and Exchange Commission
before it may conduct a ``road show'' to provide financial and
other information from 21 days to 15. H.R. 2064 also clarifies
that an issuer that was an EGC at the time it filed a
confidential registration statement but is no longer an EGC
will continue to be treated as an EGC through the date of its
IPO and requires the SEC to revise its general instructions on
Form S-1 regarding the financial information an issuer must
disclose prior to its IPO.
Background and Need for Legislation
H.R. 2064 makes changes related to the treatment of
Emerging Growth Companies (EGCs), which are a new category of
issuers established in Title I of the JOBS Act.\1\
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\1\EGCs are issuers with annual gross revenues of less than $1
billion during its most recent fiscal year. A company retains emerging
growth company status until the earliest of: 1) the end of the fiscal
year in which its annual revenues exceed $1 billion, 2) the end of the
fiscal year in which the fifth anniversary of its IPO occurred, 3) the
date on which the company has, during the previous three-year period,
issued more than $1 billion in non-convertible debt, or 4) the date on
which the company has a public float of $700 million or more.
---------------------------------------------------------------------------
H.R. 2064 would reduce the number of days an EGC must have
a confidential registration statement on file with the SEC
before it may conduct a road show to provide financial and
other information from 21 days to 15. A ``road show'' is one of
the most important steps by a company planning to issue
securities through an initial public offering (IPO). The
company puts together a team of executives to provide financial
information, such as a business outlook for the firm; explain
why it is doing an IPO; identify a possible sales price for the
stock; and answer questions from analysts and investors in
order to spur positive interest. Road shows can literally be
that--the company's team travels across the globe to make the
presentation. Road shows, however, can also be done by phone or
by a webcast.
H.R. 2064 also clarifies that an issuer that was an EGC at
the time it filed a confidential registration statement but is
no longer an emerging growth company will continue to be
treated as an EGC through the date of its IPO. Gary K.
Wunderlich, Jr., Chief Executive Officer of Wunderlich
Securities, testified on the importance of this clarification
at an October 2013 Capital Markets Subcommittee hearing:
The cost and effort to create audited financial
statements (and related narrative disclosures) for IPO
issuers are significant, and is an entirely unnecessary
burden for them where those financial statements will
not be required to be included in a preliminary
prospectus or final prospectus distributed to
investors. It is our understanding that other
securities regulators (for example, the UK FSA)
currently permit the suggested approach.
H.R. 2064 also requires the SEC to revise its general
instructions on Form S-1 regarding the financial information an
issuer must disclose prior to its IPO. Section 4 is designed to
simplify the financial statement disclosure requirements for
EGCs. Currently, an EGC must include the previous two years of
audited financials when it files its registration statement for
review. The time required for SEC review could cause the EGC to
roll into a new fiscal year before it launches its IPO, and as
such the relevant two-year period may change. Identical
legislation passed the Committee on Financial Services in the
113th Congress on a 56-0 vote.
H.R. 2064 is a reaction to the success of Title I of the
JOBS Act and makes targeted changes to the federal securities
laws to make IPOs even more appealing to small issuers. David
Weild previously commented, ``We support this bill as it
creates generally greater optionality for issuers without
altering the ultimate level of required disclosure to
investors. This bill is in keeping with the philosophy that
underlies Title I of the JOBS Act and the creation of safe
harbors such as `Testing the waters' and `Confidential
filings.' We believe, for example, that providing issuers with
the ability to file without full financial statements will cut
issuer time-to-market which is beneficial in mitigating market
risk and speeding access to capital.''
At a hearing on the 113th Congress version of H.R. 2064,
Mr. Wunderlich supported the legislation's reduction of the 21-
day quiet period: ``In our experience however, this 21-day
period is excessively long given the ready online access the
public now possesses to such filings. The volatility in our
markets can narrow the window of opportunity for an IPO to
launch and price successfully and a 21-day quiet period
inordinately and unnecessarily restricts an EGC's ability to
come to market in a timely manner. We support a significant
reduction in the quiet period as contemplated in the bill.''
Finally, Tom Quaadman from the U.S. Chamber of Commerce
testified in support of this legislation from the 113th
Congress, stating, ``One of the most important contributions of
the JOBS Act was that it removed many of the practical
obstacles to an IPO for EGCs. Importantly, it would promote EGC
access to the capital markets without denying investors with
important real time information on which to base their
investment decision.''
Hearings
The Committee on Financial Services held a hearing on April
29, 2015, titled ``Legislative Proposals to Enhance Capital
Formation and Reduce Regulatory Burdens,'' at which this matter
was examined.
Committee Consideration
The Committee on Financial Services met in open session on
May 20, 2015, and ordered H.R. 2064 to be reported favorably to
the House with an amendment by a recorded vote of 57 yeas to 0
nays (Record vote no. FC-38), a quorum being present.
Committee Votes
By voice vote, the Committee agreed to an amendment offered
by Representatives Fincher of Tennessee and Delaney of
Maryland. Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole record vote in committee was a motion by Chairman
Hensarling to report the bill favorably to the House with an
amendment. The motion was agreed to by a recorded vote of 57
yeas to 0 nays (Record vote no. FC-38), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 2064
will enhance access to capital by emerging growth companies by
enhancing their ability to conduct a ``road show'' to provide
financial and other information to potential investors and by
streamlining certain other regulatory requirements.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 17, 2015.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2064, the
Improving Access to Capital for Emerging Growth Companies Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Susan
Willie and Ben Christopher.
Sincerely,
Keith Hall.
Enclosure.
H.R. 2064--Improving Access to Capital for Emerging Growth Companies
Act
H.R. 2064 would broaden some of the federal reporting
exemptions available to emerging growth companies (EGCs) and
allow a grace period to continue operations as an EGC if the
company's status changes. (An EGC is a company that has issued
or proposes to issue stock and had gross revenues of less than
$1 billion during its most recently completed fiscal year;
companies can retain that designation from the Securities and
Exchange Commission (SEC) for up to five years.) The bill also
would require the SEC to revise some of its forms to allow for
a simplified registration process for EGCs.
Based on information from the SEC, CBO expects that the
agency would spend $1 million under H.R. 2064 to revise
instructions and other documents to reflect the new treatment
of EGCs. In addition, limiting the information EGCs would need
to report could increase the SEC's workload to review
registration statements. Because the SEC is authorized to
collect fees sufficient to offset its annual appropriation, CBO
estimates that the net budgetary effect of H.R. 2064 would be
negligible, assuming appropriation actions consistent with the
agency's authority.
Enacting H.R. 2064 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
H.R. 2064 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contacts for this estimate are Susan Willie
and Ben Christopher. The estimate was approved by H. Samuel
Papenfuss, Deputy Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 2064 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Duplication of Federal Programs
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee states that no provision of H.R. 2064 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee states that H.R. 2064 does not require any
directed rulemakings.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 2064 as the ``Improving Access to
Capital for Emerging Growth Companies Act.''
Section 2. Filing requirement for public filing prior to public
offering
This section amends Section 6(e)(1) of the Securities Act
of 1933 (15 U.S.C. 77f(e)(1) by striking ``21 days'' and
inserting ``15 days.''
Section 3. Grace period for change of status of emerging growth
companies
This section amends Section 6(e)(1) of the Securities Act
of 1933 (15 U.S.C. 77f(e)(1)) by providing that an issuer that
was an EGC when it submitted a confidential registration
statement or a publicly filed registration statement, but
ceases to be an EGC thereafter, shall continue to be treated as
an EGC through the earlier of the date on which the issuer
consummates its IPO pursuant to such registration statement or
the end of the 1-year period beginning on the date the company
ceases to be an EGC.
Section 4. Simplified disclosure requirements for emerging growth
companies
The section amends Section 102 of the Jumpstart Our
Business Startups Act (P.L. 112-106) to simplify the types of
financial data that an EGC must disclose in connection with
certain SEC filings.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SECURITIES ACT OF 1933
* * * * * * *
TITLE I--SHORT TITLE
* * * * * * *
registration of securities and signing of registration statement
Sec. 6. (a) Any security may be registered with the
Commission under the terms and conditions hereinafter provided,
by filing a registration statement in triplicate, at least one
of which shall be signed by each issuer, its principal
executive officer or officers, its principal financial officer,
its comptroller or principal accounting officer, and the
majority of its board of directors or persons performing
similar functions (or, if there is no board of directors or
persons performing similar functions, by the majority of the
persons or board having the power of management of the issuer),
and in case the issuer is a foreign or Territorial person by
its duly authorized representative in the United States; except
that when such registration statement relates to a security
issued by a foreign government, or political subdivision
thereof, it need be signed only by the underwriter of such
security. Signatures of all such persons when written on the
said registration statements shall be presumed to have been so
written by authority of the person whose signature is so
affixed and the burden of proof, in the event such authority
shall be denied, shall be upon the party denying the same. The
affixing of any signature without the authority of the
purported signer shall constitute a violation of this title. A
registration statement shall be deemed effective only as to the
securities specified therein as proposed to be offered.
(b) Registration Fee.--
(1) Fee payment required.--At the time of filing a
registration statement, the applicant shall pay to the
Commission a fee at a rate that shall be equal to $92
per $1,000,000 of the maximum aggregate price at which
such securities are proposed to be offered, except that
during fiscal year 2003 and any succeeding fiscal year
such fee shall be adjusted pursuant to paragraph (2).
(2) Annual adjustment.--For each fiscal year, the
Commission shall by order adjust the rate required by
paragraph (1) for such fiscal year to a rate that, when
applied to the baseline estimate of the aggregate
maximum offering prices for such fiscal year, is
reasonably likely to produce aggregate fee collections
under this subsection that are equal to the target fee
collection amount for such fiscal year.
(3) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(4) Review and effective date.--In exercising its
authority under this subsection, the Commission shall
not be required to comply with the provisions of
section 553 of title 5, United States Code. An adjusted
rate prescribed under paragraph (2) and published under
paragraph (5) shall not be subject to judicial review.
An adjusted rate prescribed under paragraph (2) shall
take effect on the first day of the fiscal year to
which such rate applies.
(5) Publication.--The Commission shall publish in the
Federal Register notices of the rate applicable under
this subsection and under sections 13(e) and 14(g) for
each fiscal year not later than August 31 of the fiscal
year preceding the fiscal year to which such rate
applies, together with any estimates or projections on
which such rate is based.
(6) Definitions.--For purposes of this subsection:
(A) Target offsetting collection amount.--The
target fee collection amount for each fiscal
year is determined according to the following
table:
Target fee
Fiscal year: collection amount
2002.................................................... $377,000,000
2003.................................................... $435,000,000
2004.................................................... $467,000,000
2005.................................................... $570,000,000
2006.................................................... $689,000,000
2007.................................................... $214,000,000
2008.................................................... $234,000,000
2009.................................................... $284,000,000
2010.................................................... $334,000,000
2011.................................................... $394,000,000
2012.................................................... $425,000,000
2013.................................................... $455,000,000
2014.................................................... $485,000,000
2015.................................................... $515,000,000
2016.................................................... $550,000,000
2017.................................................... $585,000,000
2018.................................................... $620,000,000
2019.................................................... $660,000,000
2020.................................................... $705,000,000
2021 and each fiscAn amount that is equal to the target fee collection
amount for the prior fiscal year, adjusted by the
rate of inflation.
(B) Baseline estimate of the aggregate
maximum offering prices.--The baseline estimate
of the aggregate maximum offering prices for
any fiscal year is the baseline estimate of the
aggregate maximum offering price at which
securities are proposed to be offered pursuant
to registration statements filed with the
Commission during such fiscal year as
determined by the Commission, after
consultation with the Congressional Budget
Office and the Office of Management and Budget,
using the methodology required for projections
pursuant to section 257 of the Balanced Budget
and Emergency Deficit Control Act of 1985.
(c) The filing with the Commission of a registration
statement, or of an amendment to a registration statement,
shall be deemed to have taken place upon the receipt thereof,
but the filing of a registration statement shall not be deemed
to have taken place unless it is accompanied by a United States
postal money order or a certified bank check or cash for the
amount of the fee required under subsection (b).
(d) The information contained in or filed with any
registration statement shall be made available to the public
under such regulations as the Commission may prescribe, and
copies thereof, photostatic or otherwise, shall be furnished to
every applicant at such reasonable charge as the Commission may
prescribe.
(e) Emerging Growth Companies.--
(1) In general.--Any emerging growth company, prior
to its initial public offering date, may confidentially
submit to the Commission a draft registration
statement, for confidential nonpublic review by the
staff of the Commission prior to public filing,
provided that the initial confidential submission and
all amendments thereto shall be publicly filed with the
Commission not later than [21 days] 15 days before the
date on which the issuer conducts a road show, as such
term is defined in section 230.433(h)(4) of title 17,
Code of Federal Regulations, or any successor thereto.
An issuer that was an emerging growth company at the
time it submitted a confidential registration statement
or, in lieu thereof, a publicly filed registration
statement for review under this subsection but ceases
to be an emerging growth company thereafter shall
continue to be treated as an emerging market growth
company for the purposes of this subsection through the
earlier of the date on which the issuer consummates its
initial public offering pursuant to such registrations
statement or the end of the 1-year period beginning on
the date the company ceases to be an emerging growth
company.
(2) Confidentiality.--Notwithstanding any other
provision of this title, the Commission shall not be
compelled to disclose any information provided to or
obtained by the Commission pursuant to this subsection.
For purposes of section 552 of title 5, United States
Code, this subsection shall be considered a statute
described in subsection (b)(3)(B) of such section 552.
Information described in or obtained pursuant to this
subsection shall be deemed to constitute confidential
information for purposes of section 24(b)(2) of the
Securities Exchange Act of 1934.
* * * * * * *
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JUMPSTART OUR BUSINESS STARTUPS ACT
* * * * * * *
TITLE I--REOPENING AMERICAN CAPITAL MARKETS TO EMERGING GROWTH
COMPANIES
* * * * * * *
SEC. 102. DISCLOSURE OBLIGATIONS.
(a) Executive Compensation.--
(1) Exemption.--Section 14A(e) of the Securities
Exchange Act of 1934 (15 U.S.C. 78n-1(e)) is amended--
(A) by striking ``The Commission may'' and
inserting the following:
``(1) In general.--The Commission may'';
(B) by striking ``an issuer'' and inserting
``any other issuer''; and
(C) by adding at the end the following:
``(2) Treatment of emerging growth companies.--
``(A) In general.--An emerging growth company
shall be exempt from the requirements of
subsections (a) and (b).
``(B) Compliance after termination of
emerging growth company treatment.--An issuer
that was an emerging growth company but is no
longer an emerging growth company shall include
the first separate resolution described under
subsection (a)(1) not later than the end of--
``(i) in the case of an issuer that
was an emerging growth company for less
than 2 years after the date of first
sale of common equity securities of the
issuer pursuant to an effective
registration statement under the
Securities Act of 1933, the 3-year
period beginning on such date; and
``(ii) in the case of any other
issuer, the 1-year period beginning on
the date the issuer is no longer an
emerging growth company.''.
(2) Proxies.--Section 14(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 78n(i)) is amended by
inserting ``, for any issuer other than an emerging
growth company,'' after ``including''.
(3) Compensation disclosures.--Section 953(b)(1) of
the Investor Protection and Securities Reform Act of
2010 (Public Law 111-203; 124 Stat. 1904) is amended by
inserting ``, other than an emerging growth company, as
that term is defined in section 3(a) of the Securities
Exchange Act of 1934,'' after ``require each issuer''.
(b) Financial Disclosures and Accounting Pronouncements.--
(1) Securities act of 1933.--Section 7(a) of the
Securities Act of 1933 (15 U.S.C. 77g(a)) is amended--
(A) by striking ``(a) The registration'' and
inserting the following:
``(a) Information Required in Registration Statement.--
``(1) In general.--The registration''; and
(B) by adding at the end the following:
``(2) Treatment of emerging growth companies.--An
emerging growth company--
``(A) need not present more than 2 years of
audited financial statements in order for the
registration statement of such emerging growth
company with respect to an initial public
offering of its common equity securities to be
effective, and in any other registration
statement to be filed with the Commission, an
emerging growth company need not present
selected financial data in accordance with
section 229.301 of title 17, Code of Federal
Regulations, for any period prior to the
earliest audited period presented in connection
with its initial public offering; and
``(B) may not be required to comply with any
new or revised financial accounting standard
until such date that a company that is not an
issuer (as defined under section 2(a) of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a)))
is required to comply with such new or revised
accounting standard, if such standard applies
to companies that are not issuers.''.
(2) Securities exchange act of 1934.--Section 13(a)
of the Securities Exchange Act of 1934 (15 U.S.C.
78m(a)) is amended by adding at the end the following:
``In any registration statement, periodic report, or
other reports to be filed with the Commission, an
emerging growth company need not present selected
financial data in accordance with section 229.301 of
title 17, Code of Federal Regulations, for any period
prior to the earliest audited period presented in
connection with its first registration statement that
became effective under this Act or the Securities Act
of 1933 and, with respect to any such statement or
reports, an emerging growth company may not be required
to comply with any new or revised financial accounting
standard until such date that a company that is not an
issuer (as defined under section 2(a) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7201(a))) is required to
comply with such new or revised accounting standard, if
such standard applies to companies that are not
issuers.''.
(c) Other Disclosures.--An emerging growth company may comply
with section 229.303(a) of title 17, Code of Federal
Regulations, or any successor thereto, by providing information
required by such section with respect to the financial
statements of the emerging growth company for each period
presented pursuant to section 7(a) of the Securities Act of
1933 (15 U.S.C. 77g(a)). An emerging growth company may comply
with section 229.402 of title 17, Code of Federal Regulations,
or any successor thereto, by disclosing the same information as
any issuer with a market value of outstanding voting and
nonvoting common equity held by non-affiliates of less than
$75,000,000.
(d) Simplified Disclosure Requirements.--With respect to an
emerging growth company (as such term is defined under section
2 of the Securities Act of 1933):
(1) Requirement to include notice on forms s-1 and f-
1.--Not later than 30 days after the date of enactment
of this subsection, the Securities and Exchange
Commission shall revise its general instructions on
Forms S-1 and F-1 to indicate that a registration
statement filed (or submitted for confidential review)
by an issuer prior to an initial public offering may
omit financial information for historical periods
otherwise required by regulation S-X (17 C.F.R. 210.1-
01 et seq.) as of the time of filing (or confidential
submission) of such registration statement, provided
that--
(A) the omitted financial information relates
to a historical period that the issuer
reasonably believes will not be required to be
included in the Form S-1 or F-1 at the time of
the contemplated offering; and
(B) prior to the issuer distributing a
preliminary prospectus to investors, such
registration statement is amended to include
all financial information required by such
regulation S-X at the date of such amendment.
(2) Reliance by issuers.--Effective 30 days after the
date of enactment of this subsection, an issuer filing
a registration statement (or submitting the statement
for confidential review) on Form S-1 or Form F-1 may
omit financial information for historical periods
otherwise required by regulation S-X (17 C.F.R. 210.1-
01 et seq.) as of the time of filing (or confidential
submission) of such registration statement, provided
that--
(A) the omitted financial information relates
to a historical period that the issuer
reasonably believes will not be required to be
included in the Form S-1 or Form F-1 at the
time of the contemplated offering; and
(B) prior to the issuer distributing a
preliminary prospectus to investors, such
registration statement is amended to include
all financial information required by such
regulation S-X at the date of such amendment.
* * * * * * *
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