Quiet Filing

Quiet filing is the name given to an initial public offering (IPO) filing where some important details are intentionally excluded because they are not completely known at the time. A quiet filing is sent to the Securities and Exchange Commission (SEC) in order to begin the process of issuing a new security, with other required details submitted later via amendments. This filing process generally takes longer than the conventional one in which all information is presented at once.

A company may want to engage in a quiet filing procedure to get the ball rolling towards an IPO. The first filing is SEC Form S-1, but this form will contain conspicuous notes to investors that the prospectus is incomplete and other details may be subject to change. Subsequent to this initial filing will be one or more documents known as SEC Form S-1/A, with "A" denoting an amendment. The amendment(s) will have the key information not provided in the first registration document. The information could be performance results from the latest fiscal year; a section of management discussion and analysis (MD&A); update on major litigation; changes in executive management or members of the Board of Directors; or any other material disclosure required in an IPO filing.

A company that chooses the quiet filing method has a balancing act to perform. Its reason to omit material information may be perfectly valid (e.g., it needs additional time to make sure all important details are accurate), but it should not let too much time pass before it provides the information to the public. The risk is that investors could perceive that the company does not have a good handle on its business operations or accounting procedures; in the worst case, investors may begin to mistrust the company's information by the time the IPO date arrives. If that's the case, the IPO is not likely to be well-received by the market. Thus, a quiet filing should be followed up with amendment filings within a reasonable time frame. The underwriter of the IPO will guide the client.