Document ID: SEC-2016-0095-0001
Agency: sec
Document Type: Rule
Title: Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference for Smaller Reporting Companies
Posted Date: 2016-01-19T05:00Z

[Federal Register Volume 81, Number 11 (Tuesday, January 19, 2016)]
[Rules and Regulations]
[Pages 2743-2748]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00872]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR PARTS 229 and 239

[Release No. 33-10003; File No. S7-01-16]
RIN 3235-AL88

Simplification of Disclosure Requirements for Emerging Growth 
Companies and Forward Incorporation by Reference on Form S-1 for 
Smaller Reporting Companies

AGENCY: Securities and Exchange Commission.

ACTION: Interim final rule; request for comment.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
adopting interim final amendments to its rules and forms to implement 
Sections 71003 and 84001 of the Fixing America's Surface Transportation 
(``FAST'') Act, which require that the Commission revise Forms S-1 and 
F-1 to permit emerging growth companies to omit financial information 
for certain historical periods and revise Form S-1 to permit forward 
incorporation by reference for smaller reporting companies.

DATES: Effective date: The interim final rule is effective on January 
19, 2016.
    Comment date: Comments on the interim final rules should be 
received on or before February 18, 2016.

[[Page 2744]]

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number S7-01-16 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to Brent J. Fields, Secretary, 
Securities and Exchange Commission, 100 F Street NE., Washington, DC 
20549-1090.

All submissions should refer to File Number S7-01-16. This file number 
should be included on the subject line if email is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's Web 
site (http://www.sec.gov/rules/proposed.shtml). Comments are also 
available for Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. All 
comments received will be posted without change; we do not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Peggy Kim, Attorney-Adviser, Office of 
Rulemaking, Division of Corporation Finance, at (202) 551-3430, U.S. 
Securities and Exchange Commission, 100 F Street NE., Washington, DC 
20549.

SUPPLEMENTARY INFORMATION: We are adopting interim final amendments to 
Forms S-1 \1\ and F-1 \2\ under the Securities Act of 1933 \3\ and Item 
512 of Regulation S-K.\4\
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    \1\ 17 CFR 239.11.
    \2\ 17 CFR 239.31.
    \3\ 15 U.S.C. 77a et seq.
    \4\ 17 CFR 229.512.
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I. Discussion of Amendments

    Form S-1 is the form used by domestic issuers to register the offer 
and sale of securities under the Securities Act of 1933 when no other 
form is authorized or prescribed, and Form F-1 is the corresponding 
form used by foreign private issuers.\5\ Item 512 of Regulation S-K 
describes the undertakings that an issuer must include in a 
registration statement.
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    \5\ A ``foreign private issuer'' is defined in Rule 405 [17 CFR 
230.405] under the Securities Act to mean any foreign issuer other 
than a foreign government, except for an issuer that has more than 
50% of its outstanding voting securities held of record by U.S. 
residents and any of the following: A majority of its officers and 
directors are citizens or residents of the United States, more than 
50 percent of its assets are located in the United States, or its 
business is principally administered in the United States.
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    Section 71003 of the FAST Act \6\ amends Section 102 of the 
Jumpstart Our Business Startups (``JOBS'') Act \7\ to allow an emerging 
growth company \8\ that is filing a registration statement (or 
submitting a draft registration statement \9\ for confidential review) 
under Section 6 of the Securities Act on Form S-1 or Form F-1 to omit 
financial information \10\ for historical periods \11\ otherwise 
required by Regulation S-X \12\ if it reasonably believes the omitted 
information will not be required to be included in the filing at the 
time of the contemplated offering, so long as the issuer amends the 
registration statement prior to distributing a preliminary prospectus 
to include all financial information required by Regulation S-X at the 
time of the amendment. This provision takes effect 30 days after the 
date of enactment of the FAST Act. In addition, Section 71003 directs 
the Commission to revise the general instructions to Form S-1 and Form 
F-1 to reflect this self-executing change.
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    \6\ Pub. L. 114-94 (Dec. 4, 2015).
    \7\ Pub. L. 112-106, 126 Stat. 306 (Apr. 5, 2012).
    \8\ An ``emerging growth company'' is defined in Section 
2(a)(19) of the Securities Act [15 U.S.C. 77b(a)(19)] to mean an 
issuer with less than $1 billion in total annual gross revenues 
during its most recently completed fiscal year. If an issuer 
qualifies as an emerging growth company on the first day of its 
fiscal year, it maintains that status until the earliest of the last 
day of the fiscal year of the issuer during which it has total 
annual gross revenues of $1 billion or more; the last day of its 
fiscal year following the fifth anniversary of the first sale of its 
common equity securities pursuant to an effective registration 
statement; the date on which the issuer has, during the previous 3-
year period, issued more than $1 billion in non-convertible debt; or 
the date on which the issuer is deemed to be a ``large accelerated 
filer'' (as defined in Exchange Act Rule 12b-2 [17 CFR 240.12b-2]). 
Section 71002 of the FAST Act amends Section 6(e)(1) of the 
Securities Act [15 U.S.C. 77f(e)(1)] to provide that an issuer that 
qualifies as an emerging growth company at the time it initiates the 
registration process, either by submitting a draft registration 
statement or by filing it publicly, but which subsequently ceases to 
be an emerging growth company, will continue to be treated as an 
emerging growth company until the earlier of the date on which the 
issuer consummates its initial public offering pursuant to that 
registration statement or the end of the 1-year period beginning on 
the date the company ceases to be an emerging growth company. 
Section 71002 became effective upon enactment.
    \9\ Prior to filing a Form S-1 or F-1 for an initial public 
offering, emerging growth companies can submit draft registration 
statements to the Commission for confidential review.
    \10\ The historical financial statements that may be omitted are 
not limited to the financial statements of the emerging growth 
company. For example, an emerging growth company may also omit the 
historical financial statements of an acquired business from its 
filing or submission if the company reasonably believes those 
financial statements will not be required at the time of the 
offering.
    \11\ Emerging growth companies must include two years of audited 
financial statements in a registration statement for an initial 
public offering of common equity securities. [15 U.S.C. 77g 
(a)(2)(A)]
    \12\ Form F-1 filers are subject to the financial reporting 
requirements of Regulation S-X and Form 20-F. Item 8.A. of Form 20-F 
[17 CFR 249.220f] contains the requirements for the historical 
periods applicable to foreign private issuers filing on Form F-1.
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    Section 84001 of the FAST Act requires the Commission to revise 
Form S-1 to permit a smaller reporting company \13\ to incorporate by 
reference into its registration statement any documents filed by the 
issuer subsequent to the effective date of the registration statement. 
We are adding a new paragraph to Item 12 of Form S-1 to effect this 
provision.\14\
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    \13\ A ``smaller reporting company'' is defined in Rule 405 
under the Securities Act to mean an issuer that had a public float 
of less than $75 million as of the last business day of its most 
recently completed second fiscal quarter or had annual revenues of 
less than $50 million during the most recently completed fiscal year 
for which audited financial statements are available.
    \14\ New paragraph (b) to Item 12 of Form S-1.
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    Currently, there are eligibility requirements for any issuer to use 
historical incorporation by reference on Form S-1 for documents filed 
before the effective date of the registration statement. These 
requirements will not be affected as a result of these amendments.\15\ 
Smaller reporting companies must meet each of these existing 
eligibility requirements and conditions to use forward incorporation by 
reference on Form S-1.\16\ For example, to be eligible to use forward 
incorporation by reference, smaller reporting companies will be 
required to be current by having filed (a) an annual report for its 
most recently completed fiscal year and (b) all required Exchange Act 
reports and materials during the 12 months immediately preceding filing 
of the Form S-1 (or such shorter period that the smaller reporting 
company was required to file such reports and materials). Smaller 
reporting companies that are blank check companies, shell companies 
(other than business combination related shell companies) or issuers 
for offerings of penny stocks will not be permitted to forward 
incorporate by reference into a Form S-1. In addition, the ability to 
forward

[[Page 2745]]

incorporate by reference will be conditioned on the smaller reporting 
company making its incorporated Exchange Act reports and other 
materials readily available and accessible on a Web site maintained by 
or for the issuer and disclosing in the prospectus that such materials 
will be provided upon request.
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    \15\ General Instruction VII to Form S-1 sets forth the 
eligibility requirements for incorporation by reference.
    \16\ Currently, forward incorporation by reference is not 
permitted for any issuers on Form S-1.
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    Finally, we are making a conforming change to Item 512(a) of 
Regulation S-K to provide for forward incorporation by reference of 
Exchange Act reports filed or furnished after the effective date of the 
registration statement on Form S-1.\17\ Our revised forms will be 
effective for disclosure made on or after January 19, 2016.\18\
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    \17\ The undertakings in Item 512(b) of Regulation S-K will also 
be required in Form S-1 registration statements filed by smaller 
reporting companies that use forward incorporation by reference.
    \18\ The amendments being adopted today apply to emerging growth 
companies omitting financial information from Form S-1 or Form F-1 
and to smaller reporting companies using forward incorporation by 
reference in Form S-1. The staff will consider whether the 
amendments discussed in this release should be made available to a 
larger group of registrants, and for additional form types. Any 
future rulemaking proposal that may stem from the staff's 
consideration would be subject to notice and public comment.
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II. Request for Comment

    We invite comment on whether the interim final rules should be 
extended to other registrants or forms. In addition, we request and 
encourage any interested person to submit comments on any aspect of our 
interim final rules, other matters that might have an impact on the 
rules, and any suggestions for additional changes. With respect to any 
comments, we note that they are of greatest assistance if accompanied 
by supporting data and analysis of the issues addressed in those 
comments.

III. Procedural and Other Matters

    Under the Administrative Procedure Act (``APA''), a notice of 
proposed rulemaking is not required when the agency, for good cause, 
finds that notice and public comment are impracticable, unnecessary, or 
contrary to the public interest.\19\ Because these amendments merely 
conform the specified forms to the requirements of a newly enacted 
statute, the FAST Act, the Commission finds that notice and public 
comment are unnecessary.\20\ These amendments revise the Commission's 
forms to make them consistent with the provisions of the FAST Act 
pertaining to simplified disclosure requirements for emerging growth 
companies and forward incorporation by reference for smaller reporting 
companies on Form S-1 and therefore do not involve the exercise of 
Commission discretion.
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    \19\ 5 U.S.C. 553(b).
    \20\ This finding also satisfies the requirements of 5 U.S.C. 
808(2), allowing the rule amendment to become effective 
notwithstanding the requirement of 5 U.S.C. 801 (if a federal agency 
finds that notice and public comment are impractical, unnecessary or 
contrary to the public interest, a rule shall take effect at such 
time as the federal agency promulgating the rule determines). The 
amendments also do not require analysis under the Regulatory 
Flexibility Act. See 5 U.S.C. 604(a) (requiring a final regulatory 
flexibility analysis only for rules required by the APA or other law 
to undergo notice and comment).
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    The APA generally requires publication of a rule at least 30 days 
before its effective date.\21\ The Commission finds there is good cause 
for the amendments to take effect on January 19, 2016 because without 
the amendments the Commission's applicable forms do not conform to the 
requirements of Section 102 of the JOBS Act, as amended by Section 
71003 of the FAST Act and Section 84001 of the FAST Act.\22\ 
Additionally, the Commission finds that the amendments relieve 
restrictions in the Commission's forms.
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    \21\ See 5 U.S.C. 553(d)(3).
    \22\ Section 71003 of the FAST Act takes effect 30 days after 
enactment, and Section 84001 of the FAST Act requires the Commission 
to revise Form S-1 within 45 days of enactment.
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    The amendments to Form S-1, Form F-1, and Item 512 of Regulation S-
K will have an effect on existing ``collection of information'' 
requirements within the meaning of the Paperwork Reduction Act of 
1995.\23\ We estimate the total annual decrease in the paperwork burden 
for all affected companies to comply with the collection of information 
requirements in these amendments is approximately 70,214 hours of 
company personnel time and approximately $84,256,400 for the services 
of outside professionals.\24\
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    \23\ 44 U.S.C. 3501 et seq.
    \24\ We are seeking emergency approval from the Office of 
Management and Budget for the revised burden estimates associated 
with the final rule amendments to Forms S-1 and F-1 in accordance 
with the procedures of the Paperwork Reduction Act of 1995. In a 
separate notice, we are seeking public comment on the revised burden 
estimates as well as a three-year extension of the same collections 
of information.
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IV. Economic Analysis

    We are mindful of the costs imposed by and the benefits obtained 
from our rules and amendments.\25\ The Commission is adopting 
amendments to implement the specific statutory mandates of Sections 
71003 and 84001 of the FAST Act. Accordingly, the costs and benefits of 
these amendments stem entirely from the statutory mandates of Sections 
71003 and 84001.\26\
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    \25\ Section 2(b) of the Securities Act [15 U.S.C. 77b(b)] 
requires the Commission, when engaging in rulemaking where it is 
required to consider or determine whether an action is necessary or 
appropriate in the public interest, to consider, in addition to the 
protection of investors, whether the action will promote efficiency, 
competition and capital formation.
    \26\ As the intent of this rulemaking is to implement the 
specific regulatory changes mandated by Congress, this analysis 
focuses on the economic effects arising from those changes. We 
recognize that these amendments could be made available to a larger 
group of registrants, and for additional form types. However, such 
discretionary amendments would be beyond the scope of this 
rulemaking. See supra note 18.
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A. Baseline

    The baseline for our economic analysis is the filing requirements 
prior to passage of the FAST Act and the amendments being adopted 
today. The amendments will impact disclosure requirements for emerging 
growth companies (``EGCs'') that file Forms S-1 and F-1 and smaller 
reporting companies (``SRCs'') that file Form S-1 for conducting a 
registered public securities offering and elect to use forward 
incorporation by reference. Investors who rely on issuer disclosures 
for making investment decisions will also be affected by the amendments 
mandated by Sections 71003 and 84001 of the FAST Act.
    Prior to the effectiveness of Section 71003, EGCs were required, 
when filing or submitting Form S-1 or Form F-1 with the Commission 
prior to an initial public offering (``IPO''), to provide all financial 
statements for historical periods required by Regulation S-X at the 
time of the filing or submission, even though information for some 
historical periods may not be required to be included in the prospectus 
contained in the registration statement at the time of the contemplated 
offering. For example, prior to the effectiveness of Section 71003, an 
EGC that intended to conduct an IPO during early 2016 and that 
submitted or filed its registration statement in December 2015 would 
need to include audited financial statements for 2013 and 2014 in that 
registration statement to comply with the rules, even though at the 
time the issuer intended to market the offering only 2014 and 2015 
audited financial statements would be required.
    The amendment pursuant to Section 71003 of the FAST Act will impact 
Form S-1 and F-1 filings and draft registration statement submissions 
by domestic and foreign EGCs that conduct initial public offerings. An 
analysis of EDGAR filings indicates that 504 EGCs filed Form S-1 for an 
IPO during calendar year 2014, compared to 363 EGCs that filed a Form 
S-1 during calendar year 2015, through December 28th. The number of 
Form F-1 filings

[[Page 2746]]

for an IPO by EGCs totaled 65 and 51 for calendar years 2014 and 2015, 
respectively (Table 1).\27\ Additionally, 299 and 133 EGCs submitted a 
draft registration statement during 2014 and 2015, respectively, for 
confidential Commission review.\28\
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    \27\ The Commission staff derived these estimates by analyzing 
filings made with the Commission during calendar years. Data for 
2015 is for the period January 1 to December 28, 2015. The Forms S-1 
and F-1 filings include filings for offerings that were later 
withdrawn or abandoned. Until October 2012, a significant number of 
EGCs submitted draft registration statements through email and as a 
result are not included in EDGAR filings for that year.
    \28\ Some of the issuers that submitted a draft registration 
statement may have also filed a Form S-1 or F-1.

 Table 1--EGCs Submissions of Draft Registration Statements, and Filings of Forms S-1 and F-1 for Initial Public
                                              Offerings, 2012-2015
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                                                             Number of EGCs
                                                            submitting draft   Number of EGCs    Number of EGCs
                                                              registration     filing Form S-1   filing Form F-1
                                                                statement
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2012......................................................                41               295                25
2013......................................................               231               404                31
2014......................................................               299               504                65
2015......................................................               133               363                51
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    Currently, forward incorporation by reference is not permitted for 
any issuers on Form S-1,\29\ and issuers are required to file a post-
effective amendment to disclose material information, including updates 
required as a result of Section 10(a)(3) of the Securities Act,\30\ 
that may have occurred prior to the completion of the offering. Forward 
incorporation by reference is available under Form S-3,\31\ the short-
form registration statement for a follow-on offering, but only issuers 
that meet specific registrant and transaction requirements can utilize 
that form. Because many SRCs are ineligible to use Form S-3, they are 
required to use Form S-1 for conducting a registered securities 
offering.\32\ As Table 2 presents, approximately 448 SRCs filed Form S-
1 for conducting a follow-on offering while 150 SRCs filed Form S-3 
during calendar year 2014.\33\
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    \29\ Forward incorporation by reference allows an issuer to 
automatically incorporate by reference reports filed pursuant to the 
Exchange Act, such as reports on Forms 10-K, 10-Q and 8-K, 
subsequent to the effectiveness of the registration statement.
    \30\ 15 U.S.C. 77j(a)(3). When a prospectus is used more than 
nine months after the effective date of the registration statement, 
the information contained therein cannot be dated more than sixteen 
months prior to such use.
    \31\ 17 CFR 239.13.
    \32\ SRCs may be eligible to use Form S-3 for secondary 
offerings if the securities are listed on a national securities 
exchange or are quoted on the automated quotation system of a 
national securities association. See Instruction I.B.3 of Form S-3. 
In addition, SRCs may be eligible to use Form S-3 for limited 
primary offerings if the SRC has at least one class of common equity 
securities listed on a national securities exchange. See Instruction 
I.B.6. of Form S-3.
    \33\ The Commission staff derived these estimates by analyzing 
filings made with the Commission during calendar years. SRCs status 
was determined based on the filer status checked on the cover page 
of Form 10-K filed during the year.

                  Table 2--SRC Filings of Forms S-1 and S-3 for Follow-on Offerings, 2012-2015
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                                                                  Number of Form
                                                                       10-Ks      Number of SRCs  Number of SRCs
                                                                  indicating SRC  filing Form S-  filing Form S-
                                                                      status             1               3
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2012............................................................           4,062             394             106
2013............................................................           3,773             432             116
2014............................................................           3,508             448             150
2015............................................................           3,107             269             112
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    The amendment pursuant to Section 84001 of the FAST Act will impact 
the number and disclosure content of post-effective amendments filed by 
eligible SRCs. Analysis of EDGAR filings indicates that approximately 
204 SRCs filed 379 post-effective amendments during 2014, while another 
217 filed 404 such amendments during calendar year 2015, through 
December 15th.\34\ Some SRCs could have avoided at least some post-
effective amendment filings if forward incorporation had been 
available.
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    \34\ Some of these filings may relate to non-Section 10(a)(3) 
updates, such as for deregistering securities. These filings will 
not be affected by an SRC's new ability to forward incorporate by 
reference. Additionally, some filings may comprise Section 10(a)(3) 
updates, as well as updates that will continue to be required as 
post-effective amendments.
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B. Analysis of the Amendments

    The statutory change to Section 102 of the JOBS Act and the 
corresponding amendment to our forms pursuant to Section 71003 of the 
FAST Act allow EGCs to omit certain historical financial statements 
required under Regulation S-X from their pre-initial public offering 
registration statement, which simplifies and reduces disclosure 
requirements for those EGCs. As Table 1 shows, up to 569 EGCs filing 
Form S-1 or F-1 and 299 EGCs submitting draft registration statements 
during calendar year 2014 could possibly have benefitted from such 
scaled down disclosure requirements. These amendments to the statute 
and our forms will ease the filing requirements for EGCs, which could 
promote small business capital formation through initial public 
offerings.
    The amendments that implement Section 71003 will enable EGCs to 
provide only information that they reasonably expect will be required 
at the time they are marketing their initial public offerings. This 
will lower the regulatory burden and thereby reduce the registration 
costs for EGCs. The amendments may also shorten the time necessary to 
complete the initial

[[Page 2747]]

registration statement of an IPO, which could improve an issuer's 
ability to raise capital in a timely manner. To the extent issuers have 
sensitive material in their historical financial information, the 
amendments may also enable EGCs to protect their competitive position 
by not publicly disseminating information beyond what is required when 
the securities offering is conducted.\35\ Such benefits are more likely 
to accrue to EGCs that have higher proprietary costs of disclosure.\36\
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    \35\ For example, R&D-intensive firms may have competitive 
incentives to provide limited disclosure about their R&D 
investments, material agreements or acquisitions in previous years.
    \36\ See Jesse Ellis, C. Edward Fee & Shawn Thomas, Proprietary 
Costs and the Disclosure of Information about Customers, 50 J. ACCT. 
RES. 685-727 (2012).
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    At the same time, the amendments may reduce the amount and quality 
of public information, thereby potentially increasing the level of 
information asymmetry and adversely impacting the informational 
efficiency of the securities market.\37\ As a result, investors could 
become more risk averse and require a higher rate of return to 
compensate for such loss in disclosure. This would lower the amount of 
potential issuer proceeds, which would offset the lower disclosure 
costs stemming from the simplified disclosure requirements.\38\ We 
believe, however, that the amendment's potential adverse impact on 
investors would be marginal because such omitted financial information 
is not expected to be used by issuers in marketing their offering and 
also because investors will have access to more recent and updated 
information.
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    \37\ Market participants also can obtain information from 
Commission staff comment letters (publicly available after the IPO) 
sent in connection with the staff's review of a draft or filed 
registration statement. To the extent the lower level of disclosure 
affects the information content of Commission staff comment letters, 
the post-IPO liquidity and stock price volatility outcomes of EGCs 
could also be impacted.
    \38\ See Susan Chaplinsky, Kathleen Weiss Hanley & S. Katie 
Moon, The JOBS Act and the Costs of Going Public (Working Paper, 
Oct. 2015), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2492241.
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    The amendment pursuant to Section 84001 of the FAST Act to permit 
forward incorporation by reference by SRCs in Form S-1 will further 
integrate disclosures under the Securities Act and the Exchange Act and 
increase regulatory simplification. Forward incorporation by reference 
will eliminate the need to update information in a filing that has 
become stale or is incomplete. The amendment should decrease the 
existing filing burdens by reducing multiple disclosure filings, 
thereby allowing SRCs to satisfy Form S-1 disclosure requirements and 
access capital markets at a lower cost. As discussed above, during 2014 
almost half of the SRCs that filed a Form S-1 also filed a post-
effective amendment to update information in that form. In addition to 
the reduced audit and legal costs of not having to file post-effective 
amendments, cost savings could also result from lower printing and 
delivery costs for a smaller sized prospectus. Such reduction in costs 
could be offset, to some extent, by ongoing costs related to the 
issuer's new obligations to make the incorporated Exchange Act reports 
and other materials readily available and accessible to investors on a 
Web site maintained by or for the issuer, or provided upon request.
    The revision to Form S-1 will make its requirements more consistent 
with those of Form S-3, which will particularly benefit SRCs that 
cannot use Form S-3 and have to rely on the longer Form S-1 to register 
their securities offering. The amendment will be most effective for 
continuous offerings, and those involving resales of securities, that 
often require repeated informational updates. By avoiding the need to 
file certain post-effective amendments, SRCs may be able to move 
quickly to raise capital when a `market window' is open. Easing the 
filing burden for such issuers may promote efficiency in SRC capital 
formation.
    At the same time, revising Form S-1 to allow SRCs to forward 
incorporate by reference could increase the analytical burden and 
search costs for potential investors. Instead of having all the 
information available in one location, investors may need to separately 
access on a Web site or request the incorporated reports in order to 
price the offering security. As a result, costs to investors for 
assembling and assimilating necessary information could increase. We do 
not have data to assess if, and to what extent, the Form S-1 revision 
will be burdensome to investors. To the extent that investors 
previously benefitted from the Commission staff's selective review of 
post-effective amendment filings, allowing forward incorporation by 
reference may eliminate such reviews and, as a result, possibly 
increase the costs to investors.
    As discussed above, the same eligibility requirements that 
currently apply to any issuer to use historical incorporation by 
reference on Form S-1 will apply to forward incorporation by reference 
by SRCs. Using these well-established eligibility requirements should 
provide certainty to issuers and investors about when forward 
incorporation by reference may be used. Requiring the SRCs to be 
current in their filing requirements will ensure that only issuers with 
a demonstrated ability to comply with Exchange Act reporting 
requirements are eligible to forward incorporate by reference, which 
will help to address concerns about investors being able to readily 
procure updated information through Exchange Act filings that would 
otherwise have been available through a post-effective amendment.

V. Statutory Basis

    The amendments described in this release are made under the 
authority set forth in Sections 6, 7, 8, 10, and 19 of the Securities 
Act, Section 102 of the JOBS Act and Sections 71003 and 84001 of the 
FAST Act.

List of Subjects in 17 CFR Parts 229 and 239

    Reporting and recordkeeping requirements, Securities.

    In accordance with the foregoing, the Commission is amending Title 
17, Chapter II of the Code of Federal Regulations as follows:

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES 
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND 
CONSERVATION ACT OF 1975--REGULATION S-K

0
1. The authority citation for part 229 is revised to read as follows:

    Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2, 
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj, 
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78 mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-
31(c), 80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq. 18 U.S.C. 
1350; Sec. 953(b), Pub. L. 111-203, 124 Stat. 1904; Sec. 102(a)(3), 
Pub. L. 112-106, 126 Stat. 309; and Sec. 84001, Pub. L. 114-94, 129 
Stat. 1312.
* * * * *

0
2. Section 229.512 is amended by revising paragraph (a)(1)(iii)(B) to 
read as follows:

Sec.  229.512  (Item 512) Undertakings.

* * * * *
    (a) * * *
    (1) * * *
    (iii) * * *
    (B) Paragraphs (a)(1)(i), (ii), and (iii) of this section do not 
apply if the registration statement is on Form S-1 (Sec.  239.11 of 
this chapter), Form S-3 (Sec.  239.13 of this chapter), Form SF-3 
(Sec.  239.45 of this chapter) or Form F-3 (Sec.  239.33 of this 
chapter) and the information required to be included in a post-
effective amendment by those paragraphs is contained in reports filed

[[Page 2748]]

with or furnished to the Commission by the registrant pursuant to 
section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m or 78o(d)) that are incorporated by reference in the 
registration statement, or, as to a registration statement on Form S-3, 
Form SF-3 or Form F-3, is contained in a form of prospectus filed 
pursuant to Sec.  230.424(b) of this chapter that is part of the 
registration statement.
* * * * *

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
3. The general authority citation for part 239 is revised to read as 
follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-
3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 
78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 
80a-26, 80a-29, 80a-30, 80a-37, and Sec. 71003 and Sec. 84001, Pub. 
L. 114-94, 129 Stat. 1312, unless otherwise noted.
* * * * *

0
4. Form S-1 (referenced in Sec.  239.11) is amended by adding General 
Instructions II.C., re-designating paragraph (b) to Item 12 as 
paragraph (c), re-designating the Note to Item 12(b)(1) as the Note to 
Item 12(c)(1), and adding new paragraph (b) to Item 12 to read as 
follows:

    Note:  The text of Form S-1 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form S-1

Registration Statement Under the Securities Act of 1933

* * * * *

General Instructions

* * * * *

II. Application of General Rules and Regulations

* * * * *
    C. A registration statement filed (or submitted for confidential 
review) under Section 6 of the Securities Act (15 U.S.C. 77f) by an 
emerging growth company, defined in Section 2(a)(19) of the Securities 
Act (15 U.S.C. 77b(a)(19)), prior to an initial public offering may 
omit financial information for historical periods otherwise required by 
Regulation S-X (17 CFR part 210) as of the time of filing (or 
confidential submission) of the registration statement, provided that:
    1. The omitted financial information relates to a historical period 
that the registrant reasonably believes will not be required to be 
included in this Form at the time of the contemplated offering; and
    2. Prior to the registrant distributing a preliminary prospectus to 
investors, the registration statement is amended to include all 
financial information required by Regulation S-X at the date of the 
amendment.
* * * * *
Item 12. Incorporation of Certain Information by Reference
* * * * *
    (b) In addition to the incorporation by reference permitted 
pursuant to paragraph (a) of this Item, a smaller reporting company, as 
defined in Rule 405 (17 CFR 230.405), may elect to incorporate by 
reference information filed after the effective date of the 
registration statement. A smaller reporting company making this 
election must state in the prospectus contained in the registration 
statement that all documents subsequently filed by the registrant 
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, 
prior to the termination of the offering shall be deemed to be 
incorporated by reference into the prospectus.
* * * * *

0
5. Form F-1 (referenced in Sec.  239.31) is amended by adding General 
Instruction II.E. to read as follows:

    Note:  The text of Form F-1 does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Form F-1

Registration Statement Under the Securities Act of 1933

* * * * *

General Instructions

* * * * *
    II. * * *
    E. A registration statement filed (or submitted for confidential 
review) under Section 6 of the Securities Act (15 U.S.C. 77f) by an 
emerging growth company, defined in Section 2(a)(19) of the Securities 
Act (15 U.S.C. 77b(a)(19)), prior to an initial public offering may 
omit financial information for historical periods otherwise required by 
Regulation S-X (17 CFR part 210) and Item 8.A. of Form 20-F (17 CFR 
249.220f) as of the time of filing (or confidential submission) of the 
registration statement, provided that:
    1. The omitted financial information relates to a historical period 
that the registrant reasonably believes will not be required to be 
included in this Form at the time of the contemplated offering; and
    2. Prior to the registrant distributing a preliminary prospectus to 
investors, the registration statement is amended to include all 
financial information required by Regulation S-X at the date of the 
amendment.
* * * * *

    By the Commission.

    Dated: January 13, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-00872 Filed 1-13-16; 4:15 pm]
 BILLING CODE 8011-01-P