[House Report 115-374]
[From the U.S. Government Publishing Office]


115th Congress    }                                    {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                    {       115-374

======================================================================



 
                ENCOURAGING PUBLIC OFFERINGS ACT OF 2017

                                _______
                                

October 31, 2017.--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. 3903]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3903) to amend the Securities Act of 1933 to 
expand the ability to use testing the waters and confidential 
draft registration submissions, and for other purposes, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.
    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
  Page 2, strike lines 1 through 5 and insert the following:
          (1) in section 5(d)--
                  (A) by striking ``Notwithstanding'' and 
                inserting the following:
          ``(1) In general.--Notwithstanding'';
                  (B) by striking ``an emerging growth company 
                or any person authorized to act on behalf of an 
                emerging growth company'' and inserting ``an 
                issuer or any person authorized to act on 
                behalf of an issuer''; and
                  (C) by adding at the end the following:
          ``(2) Additional requirements.--
                  ``(A) In general.--The Commission may issue 
                regulations, subject to public notice and 
                comment, to impose such other terms, 
                conditions, or requirements on the engaging in 
                oral or written communications described under 
                paragraph (1) by an issuer other than an 
                emerging growth company as the Commission 
                determines appropriate.
                  ``(B) Report to congress.--Prior to any 
                rulemaking described under subparagraph (A), 
                the Commission shall issue a report to the 
                Congress containing a list of the findings 
                supporting the basis of such rulemaking.''; and

  Page 2, line 11, strike ``paragraph (3)'' and insert 
``paragraph (4)''.

  Page 3, after line 19, insert the following:

          ``(3) Additional requirements.--
                  ``(A) In general.--The Commission may issue 
                regulations, subject to public notice and 
                comment, to impose such other terms, 
                conditions, or requirements on the submission 
                of draft registration statements described 
                under this subsection by an issuer other than 
                an emerging growth company as the Commission 
                determines appropriate.
                  ``(B) Report to congress.--Prior to any 
                rulemaking described under subparagraph (A), 
                the Commission shall issue a report to the 
                Congress containing a list of the findings 
                supporting the basis of such rulemaking.''.

                          Purpose and Summary

    On October 2, 2017, Representative Ted Budd introduced H.R. 
3903 the ``Encouraging Public Offerings Act of 2017,'' which 
amends the Securities Act of 1933 to expand to all public 
companies certain provisions of Title I of the Jumpstart Our 
Business Startups (JOBS) Act that previously applied only to 
Emerging Growth Companies (EGCs).
    H. R. 3903 permits issuers to submit to the Securities and 
Exchange Commission (SEC) for confidential review before 
publicly filing draft registration statements for an Initial 
Public Offering (IPO) and for follow-on offerings within one 
year of an IPO. Additionally, this bill allows all companies to 
``test the waters'' before filing an IPO, which means the 
company may meet with qualified institutional buyers (QIBs) and 
other institutional accredited investors to gauge those 
investors' interest in the offering.

                  Background and Need for Legislation

    The goal of H.R. 3903 is to encourage more companies to go 
public and expand provisions of Title I of the JOBS Act to 
allow all companies to submit confidential draft registration 
statements to the SEC and to ``test the waters'' by 
communicating directly with certain potential investors before 
filing an IPO.
    Although small companies are at the forefront of 
technological innovation and job creation, they frequently face 
obstacles in obtaining funding in the capital markets. These 
obstacles often are a result of the disproportionately larger 
burden that securities regulations--written for large public 
companies--place on small companies when they seek to go 
public. The JOBS Act makes it easier for smaller companies to 
access the capital markets and recognizes that rigid provisions 
in the securities laws can serve as deterrent to small 
companies as they seek to raise equity capital. Signed into law 
on April 5, 2012, the bipartisan JOBS Act consisted of six 
bills that originated in the Financial Services Committee and 
help small companies obtain access to capital markets by 
lifting the burden of certain securities regulations.
    By helping small companies obtain funding and go public, 
the JOBS Act has helped facilitate economic growth and job 
creation. Title I of the JOBS Act established a new category of 
issuers known as ``Emerging Growth Companies''--or ``EGCs.'' 
EGCs must have less than $1 billion in annual revenues or $700 
million in public float when they register with the SEC, and 
the law provides these EGCs with a five-year of an ``On Ramp'' 
to comply with certain regulatory requirements related to 
disclosure and reporting. Additionally, Title I allows for EGCs 
to ``test the waters'' by meeting with investors and explain 
their business structure before issuing an IPO. Biotech 
companies in particular have been vocal about the benefits that 
testing the waters provides, as it allows for additional time 
to explain to investors the complicated technologies, 
regulatory pathways, and complex product offerings of the 
company to encourage greater participation in the IPO. Title I 
of the JOBS Act also permits EGCs to confidentially submit 
draft registration statements to the SEC for nonpublic review 
before issuing an IPO. Allowing confidential filing of draft 
registration statements with the SEC allows companies to 
finalize their registration documents without the undue 
expectations from media scrutiny and allows companies to time 
their offering with the market before making their Form S-1 
public and beginning an investor roadshow.
    Even with these important advances, many small companies 
still cannot access the capital they need to grow their 
businesses and create jobs. According to one survey, 57 percent 
of respondents believe the current business financing 
environment is restricting growth opportunities and 49 percent 
of respondents believe it is restricting their ability to hire. 
While the JOBS Act has made it easier for small companies to go 
public, the JOBS Act alone has not been enough to entirely 
overcome the capital formation obstacles that many companies 
face as they attempt to go public.
    Recognizing the benefit these JOBS Act provisions serve to 
fulfill its mission of facilitating capital formation, on June 
29, 2017, the SEC extended the option to submit draft 
registration statements for IPOs and follow-on offerings within 
one year of an IPO to all companies (no longer limiting the 
option to EGCs). H.R. 3903 codifies this provision into statute 
and expands the ``testing the waters'' provision in Title I of 
the JOBS Act to apply to all companies. Expanding ``testing the 
waters'' provision will enable all companies to have the 
benefits of reaching out to QIBs and other institutional 
accredited investors to solicit interest before filing an IPO, 
without harming retail investors. An amendment offered by Rep. 
Budd, and adopted by the Committee, would allow the SEC to 
impose additional terms, conditions, or requirements regarding 
the expansion of these provisions beyond EGCs as is appropriate 
in the public interest or for the protection of investors.
    In its report on Capital Markets mandated by President 
Trump's February 3rd Executive Order, Treasury recommended that 
the SEC permit all companies to file drafts for IPOs 
confidentially and that companies other than EGCs be allowed to 
``test the waters'' with potential investors who are QIBs or 
institutional accredited investors.

                                Hearings

    The Committee on Financial Services and Subcommittee on 
Capital Markets, Securities, and Investment held a hearing 
examining matters relating to H.R. 3903 on March 22, 2017, 
April, 26, 2017, and July 18, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
October 11, 2017, and October 12, 2017, and ordered H.R. 3903 
to be reported favorably to the House as amended by a recorded 
vote of 60 yeas to 0 nays (Record vote no. FC-84), a quorum 
being present. Before the motion to report was offered, the 
Committee adopted an amendment offered by Mr. Budd by voice 
vote.

                            Committee Votes

    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 recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House as amended. The motion 
was agreed to by a recorded vote of 60 yeas to 0 nays (Record 
vote no. FC-84), a quorum being present.


                      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. 3903 
will extend popular JOBS Act provisions beyond just EGCs to all 
companies, to help encourage companies to go public.

   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.

                 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, October 27, 2017.
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. 3903, the 
Encouraging Public Offerings Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 3903--Encouraging Public Offerings Act of 2017

    Under current law, issuers of securities are generally 
required to register with the Securities and Exchange 
Commission (SEC) prior to an initial public offering (IPO) of 
their securities for sale. Emerging growth companies are 
allowed to submit draft registration statements to the SEC for 
confidential review before publicly filing and also can submit 
draft registration statements for follow-on securities 
offerings within one year of an IPO. SEC's current policy 
guidance extends that allowance to all issuers of securities. 
H.R. 3903 would codify that policy guidance. Additionally, 
emerging growth companies are exempt from a prohibition on 
issuers of securities from communicating with certain potential 
investors about such securities without first registering them 
with the SEC. H.R. 3903 would expand that exemption to include 
all issuers of securities.
    Based on an analysis of information from the SEC, CBO 
estimates that implementing H.R. 3903 would cost less than 
$500,000 to update the SEC's guidance. Moreover, the SEC is 
authorized to collect fees sufficient to offset its annual 
appropriation; therefore, CBO estimates that the net effect on 
discretionary spending would be negligible, assuming 
appropriation actions consistent with that authority.
    Enacting H.R. 3903 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 3903 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 3903 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    If the SEC increases fees to offset the costs associated 
with implementing the bill, H.R. 3903 would increase the cost 
of an existing mandate on private entities required to pay 
those assessments. CBO estimates that the incremental cost of 
the mandate would be small and would fall well below the annual 
threshold for private-sector mandates established in UMRA ($156 
million in 2017, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Stephen Rabent 
(for federal costs) and Logan Smith (for private-sector 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      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

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This Section cites H.R. 3903 as the ``Encouraging Public 
Offerings Act of 2017''

Section 2. Expanding testing the waters and confidential submissions

    This section amends section 5(d) of the Securities Act of 
1933 to allow for all companies to engage in oral or written 
communications with potential investors prior to filing a 
registration statement.
    This section also amends the Securities Act of 1933 to 
allow for any issuer prior to its IPO to confidentially submit 
a draft registration statement to the SEC for nonpublic review 
and allows for any issuer within a one year period of its 
initial public offering, or its registration of a security 
under section 12(b) of the Securities Exchange Act of 1934, to 
confidentially submit a draft registration statement with the 
SEC for nonpublic review.
    This section gives the SEC the authority to issue 
regulations, subject to public notice and comment, or impose 
such other terms, conditions or requirements on oral and 
written communications or draft registration statements by any 
issuer, other than an EGC, as it deems appropriate to be in the 
public interest or for the protection of investors. The SEC 
must submit a report to Congress prior to any rulemaking with a 
list of findings supporting the rulemaking.

         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):

         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--

           *       *       *       *       *       *       *



       prohibitions relating to interstate commerce and the mails

  Sec. 5. (a) Unless a registration statement is in effect as 
to a security, it shall be unlawful for any person, directly or 
indirectly--
          (1) to make use of any means or instruments of 
        transportation or communication in interstate commerce 
        or of the mails to sell such security through the use 
        or medium of any prospectus or otherwise; or
          (2) to carry or cause to be carried through the mails 
        or in interstate commerce, by any means or instruments 
        of transportation, any such security for the purpose of 
        sale or for delivery after sale.
  (b) It shall be unlawful for any person, directly or 
indirectly--
          (1) to make use of any means or instruments of 
        transportation or communication in interstate commerce 
        or of the mails to carry or transmit any prospectus 
        relating to any security with respect to which a 
        registration statement has been filed under this title, 
        unless such prospectus meets the requirements of 
        section 10; or
          (2) to carry or cause to be carried through the mails 
        or in interstate commerce any such security for the 
        purpose of sale or for delivery after sale, unless 
        accompanied or preceded by a prospectus that meets the 
        requirements of subsection (a) of section 10.
  (c) It shall be unlawful for any person, directly or 
indirectly, to make use of any means or instruments of 
transportation or communication in interstate commerce or of 
the mails to offer to sell or offer to buy through the use or 
medium of any prospectus or otherwise any security, unless a 
registration statement has been filed as to such security, or 
while the registration statement is the subject of a refusal 
order or stop order or (prior to the effective date of the 
registration statement) any public proceeding or examination 
under section 8.
  (d) Limitation.--[Notwithstanding]
          (1)  In general._Notwithstanding  any other provision 
        of this section, [an emerging growth company or any 
        person authorized to act on behalf of an emerging 
        growth company] an issuer or any person authorized to 
        act on behalf of an issuer may engage in oral or 
        written communications with potential investors that 
        are qualified institutional buyers or institutions that 
        are accredited investors, as such terms are 
        respectively defined in section 230.144A and section 
        230.501(a) of title 17, Code of Federal Regulations, or 
        any successor thereto, to determine whether such 
        investors might have an interest in a contemplated 
        securities offering, either prior to or following the 
        date of filing of a registration statement with respect 
        to such securities with the Commission, subject to the 
        requirement of subsection (b)(2).
          (2) Additional requirements.--
                  (A) In general.--The Commission may issue 
                regulations, subject to public notice and 
                comment, to impose such other terms, 
                conditions, or requirements on the engaging in 
                oral or written communications described under 
                paragraph (1) by an issuer other than an 
                emerging growth company as the Commission 
                determines appropriate.
                  (B) Report to congress.--Prior to any 
                rulemaking described under subparagraph (A), 
                the Commission shall issue a report to the 
                Congress containing a list of the findings 
                supporting the basis of such rulemaking.
  (e) Notwithstanding the provisions of section 3 or 4, unless 
a registration statement meeting the requirements of section 
10(a) is in effect as to a security-based swap, it shall be 
unlawful for any person, directly or indirectly, to make use of 
any means or instruments of transportation or communication in 
interstate commerce or of the mails to offer to sell, offer to 
buy or purchase or sell a security-based swap to any person who 
is not an eligible contract participant as defined in section 
1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18)).

    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] Draft Registration 
Statements.--
          [(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 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.]
          (1) Prior to initial public offering.--Any issuer, 
        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 15 days before 
        the date on which the issuer conducts a road show (as 
        defined under section 230.433(h)(4) of title 17, Code 
        of Federal Regulations) or, in the absence of a road 
        show, at least 15 days prior to the requested effective 
        date of the registration statement.
          (2) Within one year after initial public offering or 
        exchange registration.--Any issuer, within the one-year 
        period following its initial public offering or its 
        registration of a security under section 12(b) of the 
        Securities Exchange Act of 1934, 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 15 days before the date on 
        which the issuer conducts a road show (as defined under 
        section 230.433(h)(4) of title 17, Code of Federal 
        Regulations) or, in the absence of a road show, at 
        least 15 days prior to the requested effective date of 
        the registration statement.
          (3) Additional requirements.--
                  (A) In general.--The Commission may issue 
                regulations, subject to public notice and 
                comment, to impose such other terms, 
                conditions, or requirements on the submission 
                of draft registration statements described 
                under this subsection by an issuer other than 
                an emerging growth company as the Commission 
                determines appropriate.
                  (B) Report to congress.--Prior to any 
                rulemaking described under subparagraph (A), 
                the Commission shall issue a report to the 
                Congress containing a list of the findings 
                supporting the basis of such rulemaking.
          [(2)] (4) 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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