After the SEC staff has provided its initial set of comments, the issuer and the underwriters will often have more clarity with respect to the trajectory of the SEC review process, and accordingly, when the registration process is likely to be completed and the road show can commence. In most cases, offering participants delay the offering process and avoid distributing a prospectus until all material changes suggested by the SEC staff have been addressed satisfactorily. The review process is time consuming, and it can often take two to four months to clear comments with the SEC. The duration of the review generally depends on the complexity of the company’s business, the nature of the issues raised in the review process, and the quality, completeness, and timelines of the company’s responses to the SEC staff’s comments. Frequent Areas of SEC Comment Overall, the SEC staff looks for a balanced, clear presentation of the information required in the registration statement. Experienced legal counsel, underwriters, and audit firms generally can anticipate many of the matters that the SEC will raise in the comment process and preempt certain comments. After a certain period of time after an IPO, the SEC makes the comment letters and responses available on its website. As a result, it is possible to determine the most typical comments raised during the IPO process by reviewing the comments and responses relating to other companies’ recent IPO registration statements. Some of the most frequent comments raised by the SEC staff on disclosure, other than with respect to the financial statements, include: ■ Front Cover and Gatefold: On the theory that “a picture is worth a thousand words,” does the artwork present a balanced presentation of the company’s business, properties, tenants, and geographies? ■ Prospectus Summary: Is the presentation balanced? Is it too lengthy to provide a true summary of the disclosures found elsewhere in the prospectus? 15 | 2024 Guide to REIT IPOs and Listing Transactions
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