In the IPO journey, many enterprises are concerned about the risks of disclosing information too early. Therefore, the U.S. JOBS Act introduced a special mechanism for Emerging Growth Companies (EGCs): the right to Confidential Submission.
This is not merely a legal procedure, but also a strategic advantage that helps companies control information, limit risks, and proactively prepare before officially going public.
The Concept of Confidential Submission
Confidential Submission is the process of filing IPO draft registration statements with the U.S. Securities and Exchange Commission (SEC) under a confidential review regime. The key difference compared to traditional public filing is that these drafts are exempt from disclosure under the Freedom of Information Act (FOIA). This means that in the early stage, all sensitive information of the enterprise—from financial statements to business plans—remains undisclosed, providing greater security during preparation.
For companies that do not qualify as EGCs, the SEC still allows non-public submission, but without absolute protection. They must rely on SEC Rule 83 to request confidential treatment, and such protection is determined only when there is a formal FOIA request.
Strategic Benefits of Confidential Submission
1. Controlling information flow
IPO processes often attract significant attention from media, investors, and competitors. If information is disclosed too early, any delay or adjustment may negatively affect brand image. Confidential Submission gives enterprises more room to finalize filings without market pressure.
2. Proactive preparation and adjustment
The SEC review process is lengthy, often involving multiple rounds of supplemental requests and revisions. Confidential review enables EGCs to make these adjustments privately, ensuring that only the most complete version is publicly released. This is a major advantage, especially for technology startups or high-growth companies whose business models are still evolving.
3. Mitigating risks when postponing IPO
Many enterprises must delay their IPOs due to unfavorable market conditions. If filings are public too early, postponement can send negative signals, undermining investor confidence. Confidential Submission eliminates this risk, as information is only disclosed once the company is truly ready.
Legal Framework
Quyền Confidential Submission The right to Confidential Submission is explicitly provided under Section 106 of the JOBS Act, amending Section 6(e)(1) of the Securities Act of 1933. In addition, the FAST Act of 2015 requires EGCs to publicly file their registration statements at least 15 days before commencing a roadshow, or if no roadshow is conducted, at least 15 days before the registration becomes effective.
For non-EGC companies, similar rules apply but at a limited level. Even for follow-on offerings, the SEC requires public filing at least 48 hours before the effective date.
Notably, confidential submission is not considered a “filing” under the Sarbanes–Oxley Act. Therefore, it does not trigger obligations regarding internal controls or additional reporting, allowing EGCs to save significant compliance costs in the early stage.
Practical Implications for EGCs
Confidential Submission is considered part of the “on-ramp period” for EGCs—up to 5 years post-IPO—during which reduced disclosure and compliance requirements apply. This mechanism enables EGCs to access global capital markets more securely, while focusing on strengthening governance systems and shaping long-term growth strategies before becoming fully public companies.
In practice, most U.S. companies have taken advantage of this mechanism. It not only safeguards short-term interests but also lays the foundation for long-term sustainable growth.
Choosing a Trusted Advisory Partner
IPO is a journey full of opportunities but also challenges. Enterprises need the support of experienced advisors with deep expertise in international legal frameworks and the ability to design tailored solutions.
With extensive experience in financial and legal advisory, IVLF accompanies enterprises as a strategic partner. From capital structure planning, filing preparation to disclosure governance, IVLF ensures every step is legally compliant, optimizes capitalization efficiency, and enhances brand value in the market.
Contact information
IVLF International Consulting Company Limited
Hanoi Office:
📍 R1.7 Eden Rose Urban Area, 908 Kim Giang, Thanh Tri District, Hanoi
📞 (+84) 936 726 065
✉️ info@ivlf-advisors.com
Ho Chi Minh Office:
📍 4/17, HT02 Street, Hiep Thanh Ward, District 12, HCMC
📞 (+84) 936 726 065
✉️ info@ivlf-advisors.com
Contact IVLF for consulting and support in your transactions!
