As of July 10, companies weighing an initial public offering canopt to keep certain information confidential until closer to theirtrading debut.

On June 29, the Securities and Exchange Commission announced thatall companies are now permitted tosubmit draft registration statements relating to IPOs for review ona nonpublic basis.

Lawyers are split on how significant this move is, but many canagree it is a clear indicator the Trump administration is makinggood on its promise to take steps to deregulate the financialmarkets.

Previously, this benefit was only allowed through the 2012Jumpstart Our Business Startups Act and was accessible only tocompanies with total annual gross revenue of less than $1 billion,labeled in the startup world as “emerging growth companies.”Whereas IPO registration filings were previously made publicthrough an S-1 disclosure about three or four months in advance ofa company going public, companies will now be able to keep theinformation disclosed in the form—such as financial data, futurebusiness plans and risk factors—private until 15 days before stocksbegin trading.

“By expanding a popular JOBS Act benefit to all companies, wehope that the next American success story will look to our publicmarkets when they need access to affordable capital,” SEC chair JayClayton said in a statement. “We are striving for efficiency in ourprocesses to encourage more companies to consider going public,which can result in more choices for investors, job creation and astronger U.S. economy.”

According to the agency, “the non-public review process afterthe IPO reduces the potential for lengthy exposure to marketfluctuations that can adversely affect the offering process andharm existing public shareholders.”

Shriram Bhashyam is a co-founder and general counselof EquityZen, a NewYork-based company that gives a platform to employees of pre-IPOcompanies like Spotify and Lyft so they can sell equity toaccredited investors.

The former Shearman & Sterling securities associate viewsthe rule change as a clear shift in tone coming from the Trumpadministration, specifically from the SEC and its new chairman.

“This is an important development,” Bhashyam said. “This couldencourage companies to go public sooner and to remove friction fromthe process.”

Bhashyam explained that the initial period between the nonpublicregistration filing and trading will help the in-house lawyers andissuer's counsel who are dealing with the IPO. “They can get a viewinto how the SEC would receive the draft registration statementwithout having it be in the public light,” he said.

Other attorneys can see the benefit as well. Steven Bochner, apartner at Wilson Sonsini Goodrich & Rosati specializing insecurities law, told The Wall Street Journal inan interview, “It provides companies with flexibility inmarkets that are uncertain to start the process without the fearthey might not complete it and still expose their confidentialinformation to competitors, and incur the stigma associated withannouncing a process and being unable to complete it.”

Sterling Miller, senior counsel at Hilgers Graben and a formergeneral counsel, is less optimistic about the changes privatecompanies and their in-house lawyers could realistically see. Infact, he believes this rule change “will have marginal impact onwhether companies decide to go public or not.”

“The bigger issues around reluctance to IPOs are not addressedby this move, though any step toward lowering regulatory hurdles iswelcome,” Miller said. “If the SEC wants to encourage morecompanies to go public, they need to reduce the overall burden ofcompliance, which includes [Sarbanes-Oxley] compliance, Dodd-Frankand all of the disclosure burdens.”

Miller cited CEO pay disclosure as one example of the“disclosure burdens.” “These are very costly to comply with andhave dubious value in terms of making the markets better,” hesaid.

During his time as general counsel of Sabre Corp., the companybecame privately held and then went public again, years later in2014. Miller was astonished that “it added millions of dollars tocomply” with federal regulations as a publicly traded company.

Plus, with the boom in private equity, Miller said there is lessincentive for companies to enter the public market.

“Company owners have to think really hard about whether themoney raised via an IPO is that much better than private investmentand the ability to build your company outside of the regulatoryprocess and burden,” he said.