By Liz Dunshee
For companies that are ineligible to use Form S-3 – e.g., because they do not yet meet the seasoning requirement under current rules or are otherwise ineligible – Form S-1 remains part of the capital-raising toolkit. For example, newly public companies may use Form S-1 for a follow-on offering or a resale registration. Against the backdrop of the SEC’s broader effort to modernize public offerings – including through its Registered Offering Reform proposal, which we discussed in this June 5 Cooley alert – the staff is also moving forward with clarifying the existing framework for Form S-1.
On Friday, September 4, the SEC’s Division of Corporation Finance issued four new Corporation Finance Interpretations (CFIs) on the topic of Securities Act Forms, which clarify how companies can streamline Form S-1 registration statements by incorporating Exchange Act reports by reference.
Additionally, the staff issued a CFI on the topic of Securities Act Rules, which explains the limits of fee offsets under Rule 457(b).
Incorporation by reference: Guidance on eligibility and guardrails
Eligible Form S-1 issuers can already incorporate specified previously filed Exchange Act reports by reference instead of repeating that disclosure in the registration statement. Qualifying smaller reporting companies also can elect to forward incorporate certain future Exchange Act filings. Here are the key mechanics that the CFIs confirm:
- Companies can begin incorporating by reference if and when eligible. CFI 113.09confirms that a company that was not eligible to incorporate by reference when it filed a registration statement on Form S-1 and did not utilize historical or forward incorporation by reference can subsequently utilize incorporation by reference in its next pre- or post-effective amendment if, at the time it files the amendment, it meets all conditions for use of incorporation by reference.
The staff believes that a registrant that becomes eligible to use historical or forward incorporation by reference may do so at any time by filing a pre- or post-effective amendment, as applicable, by analogy to Securities Act Rule 401(c), which permits use of a shorter form registration statement at the time of any amendment to a registration statement. The pre- or post-effective amendment to add incorporation by reference must include the information required by Item 12 of Form S-1.
- Eligibility and required documents still apply. CFI 113.10 and CFI 113.11 emphasize that companies must satisfy all eligibility requirements and conditions for incorporation by reference, and must incorporate the documents specifically required to be incorporated by Items 12(a)(1) and 12(a)(2) of Form S-1. Specifically:
- CFI 113.10 – If a smaller reporting company complies with Item 12(b) of Form S-1 by indicating that it has elected to forward incorporate on Form S-1, it must meet all of the eligibility requirements and conditions to using incorporation by reference set forth in General Instruction VII of Form S-1 in order for the documents subsequently filed by the registrant to be incorporated into the registration statement. See Release No. 33-10003 (Jan. 13, 2016).
- CFI 113.11 – If a company that is eligible to forward incorporate by reference on Form S-1 has elected to forward incorporate information filed after the effective date of the registration statement under Item 12(b), it must also incorporate by reference into the prospectus contained in the registration statement the documents required to be specifically incorporated by Items 12(a)(1) and 12(a)(2) of Form S-1. See Release No. 33-10003 (Jan. 13, 2016).
- Forward incorporation doesn’t eliminate all S-1 updating. CFI 113.12 conveys that while Exchange Act reports may keep company-level information such as financial statements, MD&A and risk factors current, they may not address offering-specific information – e.g., selling stockholder information. Before a sale, a company relying on forward incorporation still needs to confirm that the prospectus contains all required Form S-1 disclosure and determine whether any update can be made through a prospectus supplement or requires a post-effective amendment. Specifically:
- CFI 113.12 – Forward incorporation of subsequent Exchange Act filings may not always provide all of the itemized disclosure required in a prospectus in a Form S-1. In order to determine whether a registrant has a complete prospectus at the time of any sale, a registrant that has elected to forward incorporate by reference must consider whether any item of Form S-1 requires disclosure not included in any Exchange Act filings subsequently filed by the registrant that the Form S-1 has incorporated by reference. To the extent such registrant needs to add such disclosure to its prospectus, it will need to evaluate whether to file a post-effective amendment to the registration statement or prospectus supplement. However, if the information required by Form S-1 appears in incorporated documents under headings that differ from the Form S-1 item headings, incorporation by reference still satisfies the form’s requirements.
Streamlined capital formation: Bigger changes may still be ahead
The CFIs simply clarify how to apply the existing Form S-1 framework. But they’ve arrived in the midst of the Commission’s broader effort to facilitate capital formation and streamline registered offerings. Among other things, the SEC is currently considering comments on its Registered Offering Reform proposal, which addresses both Form S-3 eligibility and Form S-1 incorporation by reference.
If adopted as proposed, the rule changes would eliminate the current one-year seasoning requirement for Form S-3. A domestic issuer could become eligible to use Form S-3 immediately after its IPO, assuming it satisfies the other proposed eligibility conditions.
At the same time, the proposal would make Form S-1 itself more flexible. It would eliminate the requirement to have filed a Form 10-K for the most recently completed fiscal year before using backward incorporation by reference and would extend forward incorporation beyond smaller reporting companies to all qualifying Form S-1 issuers. As our June 5 alert noted, that would make an S-1 electing both backward and forward incorporation function more like a short-form registration statement, although important differences from Form S-3 would remain.
Taken together, the proposed amendments would allow some companies to transition more quickly to Form S-3 for certain post-IPO registered offerings, while Form S-1 would remain an important path for issuers and transactions that do not qualify for Form S-3. The staff’s guidance on how forward incorporation works – and the need to ensure that an S-1 prospectus remains complete – therefore will continue to be relevant even if the proposal is adopted.
Rule 457(b) fee offsets apply on a same-transaction basis
In addition to the CFIs addressing incorporation by reference, the staff also published Securities Act Rules CFI 240.18, which states:
Question: A filer attempted to register the offer and sale of securities on a Securities Act registration statement by claiming an offset against fees paid on a preliminary merger Schedule 14C [PREM14C] filed for a different transaction. The filer cited Rule 457(b) as the basis for the offset. May the filer claim this offset?
Answer: No. This offset is not available because the PREM14C was filed in connection with a different transaction. Rule 457(b) and the analogous Exchange Act Rule 0-11(a)(2) only ensure that, for any single transaction, the total fee paid for that particular transaction is to be calculated based on the overall transaction rather than requiring a fee for each step of the transaction. See Release No. 33-6617 (Jan. 9, 1986). [Sept. 4, 2026]
