United States

FAST Act simplifies certain SEC disclosure requirements


On December 4, 2015, the Fixing America’s Surface Transportation (FAST) Act was signed into law by President Obama. Although the primary provisions of this Act relate to funding for transportation improvements, the Act also includes a number of changes to the federal securities laws.

Among other changes, the Act contains provisions for improving access to capital for emerging growth companies (EGCs), as defined, including the following:

  • Effective immediately, an EGC that submits for confidential, nonpublic staff review a draft registration statement for an IPO must publicly file the registration statement and all previously submitted drafts no later than 15 days before the date on which the EGC conducts a road show. Previously, EGCs were required to publicly file the registration statement no later than 21 days before the roadshow was conducted.
  • Effective immediately, if a company loses its EGC status during the SEC review process for an IPO, the company will continue to be treated as an EGC until the earlier of (a) the date on which the company consummates its IPO or (b) one year after the issuer ceased to be an EGC.
  • As discussed in recent Compliance and Disclosure Interpretations related to the Act, EGCs will be allowed to omit financial information from a Form S-1 or F-1 filed (or confidentially submitted) for an IPO if that financial information relates to historical periods the EGC reasonably believes will not be required to be included at the time of the contemplated offering. This could apply, for example, when the SEC review process is likely to go beyond the date on which a financial statement becomes “stale.” However, before the EGC distributes the preliminary prospectus to investors, the registration statement would need to be amended to include all financial information required by Regulation S-X as of the date of the amendment.

The Act also requires the SEC to adopt rules to amend Form S-1 to allow smaller reporting companies, as defined, to incorporate by reference in a registration statement on that form any documents that the company files after the effective date of the registration statement.

To modernize and simplify disclosures by all issuers, the Act requires the SEC to issue rules that will allow the inclusion of a summary page in annual reports filed on Form 10-K as long as each item on the summary page contains a cross-reference to the related information in the Form 10-K. The Act also requires the SEC to revise Regulation S-K to eliminate duplicative, overlapping, outdated or unnecessary requirements for all issuers, while still providing material information. Further, the SEC is required to carry out a study of the requirements of Regulation S-K to determine how best to modernize and simplify disclosure requirements so as to reduce boilerplate language and disclosure of immaterial information.