As a result, any securities that are identified in the replacement registration statement as included pursuant to Rule a 6 may still be offered and sold from the expiring registration statement during the Rule a 5 grace period prior to effectiveness of the new registration statement. If, instead of including unsold securities from the expiring registration statement, an issuer determines to rely on the provisions of Rule p to offset fees owed upon the initial filing of, or any pre-effective amendment to, the replacement registration statement relating to the registration of new securities, the related securities from the expiring registration statement are immediately deemed deregistered upon the filing of the replacement registration statement or any pre-effective amendment registering the new securities.
These deregistered securities may not be offered or sold during the Rule a 5 grace period off the expiring registration statement or included as unsold securities on the new registration statement in reliance on Rule a 6. With respect to securities registered on an expiring registration statement, an issuer may choose to include a portion of the previously-registered unsold securities under Rule a 6 and, if the conditions of Rule p are satisfied, use the fees already paid attributable to the balance of the securities registered on the expiring registration statement as an offset against any new fees due in respect of newly-registered securities on the replacement registration statement.
The cover page of the registration statement should clearly explain the amount of securities included or the potential that they may be included pursuant to Rule a 6 , the amount of fees offset pursuant to Rule p , and identify the related registration statements.
The specific amounts of unsold securities that may be included do not need to be identified in the initial filing and may be included in a pre-effective amendment to the replacement registration statement such as just before effectiveness of the replacement registration statement. The replacement registration statement reflects on the cover page the expiring registration statement and states that the issuer will identify in a pre-effective amendment the securities included in the replacement registration statement pursuant to Rule a 6 and the amount of any new securities to be registered.
Alternatively, instead of including the unsold securities from the expiring registration statement, the issuer may elect to use Rule p to utilize the fees relating to all or a portion of the unsold shares on the expiring registration statement as a fee offset. In addition to assessing S-3 and WKSI eligibility, a company planning to file a registration statement must determine that its financial statements comply with Regulation S-X.
For example, a company that has recently announced a segment realignment must recast the financial statements that are to be incorporated by reference into a shelf registration statement before or in connection with filing the registration statement rather than waiting until the next annual report on Form K. In other instances, a company that recently has completed a large acquisition or series of acquisitions may be required to present pro forma financial information in connection with the filing.
Implementation: Revise and update shelf registration statement and ancillary documents. The Securities Offering Reform changed many aspects of US securities laws and affected practical aspects of shelf takedowns in particular.
Companies should work with advisors familiar with current market practice and the changes implemented in the reform to ensure that their new shelf registration statements are properly updated and equipped for future offerings.
Please contact the Gibson Dunn attorney with whom you work or any of the following:. Amy L. Goodman — Washington, D. Lane — Washington, D. Moloney — Orange County , jmoloney gibsondunn. Mueller — Washington, D.
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First Step: Assess status of shelf registration statement Although some types of shelf registration statements are exempt, many of the most commonly used types are subject to the three-year rule. Thus, knowing when a registration statement is due to expire and planning in advance for this event is extremely important. Even for WKSIs that can file automatically effective registration statements, advanced planning is important to ensure uninterrupted access to the capital markets.
Under the SEC's rules, only the following types of registration statements are subject to the three-year limit:. Automatic shelf registration statements generally referred to as "WKSI Shelves" filed on or shortly after the effective date of the SEC's Securities Offering Reform rules will expire on or shortly after December 1, Even if a post-effective amendment to the shelf registration statement was filed, the threeyear period is still calculated from the initial effective date of the registration statement.
Registration statements on Form S-3 or Form F-3 that register securities to be offered on an immediate, delayed or continuous basis, typically referred to as "shelf offerings," by the registrant or certain of its affiliates. This is the type of registration statement typically used for a "universal" shelf registration statement registering various types of securities. As noted above, if the registration statement became effective prior to December 1, , it will expire on December 1, Securities Offered on a Continuous Basis.
Registration statements that register securities whose offering will commence promptly upon the effectiveness of the registration statement will be made on a continuous basis and may continue for a period in excess of 30 days from the initial date of the effectiveness of the registration statement. Mortgage Related Securities. Registration statements registering offerings of mortgagerelated securities, including such securities as mortgage backed debt and mortgage participation or pass through certificates.
The three-year limit does not apply to shelf registration statements other than those specified above. Thus, registration statements, in each case other than automatically effective registration statements, registering the following types of securities are not subject to the three-year limit:. In a series of frequently asked questions regarding its Securities Offering Reform rules, the SEC explained that the three-year period would begin on December 1, , and expire on or after November 30, , without regard to how long the registration statement had been effective before that date, for shelf registration statements for delayed or continuous offerings by the registrant or certain affiliates, offerings commencing promptly after effectiveness on a continuous basis for a period in excess of 30 days and offerings of mortgage related securities that were effective before December 1, For shelf registration statements with effective dates on or after December 1, , the three-year period would begin on the initial effective date of the registration statement, without regard to any subsequently filed posteffective amendments.
The first thing a company should do is identify all of its registration statements in order to determine which, if any, are subject to expiration, and any applicable expiration dates.
Once these dates are known, the company can then prepare a timeline for replacing the expiring registration statement. While the preparation of the registration statement itself may not take very long, the timeline should reflect the various issues that may have long lead times, including obtaining board and other corporate approvals, gathering necessary signatures and consents, updating selling security holder information, if applicable, and providing time for various interested parties to review the filing.
A sample timetable for replacing a "universal" shelf registration with an automatically effective WKSI shelf is attached as Exhibit A.
An expiring registration statement may be replaced either by an automatically effective registration statement or by a registration statement that must be declared effective by the SEC. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
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The takedown is the price of a stock, bond, or other security offered on the open market, at which underwriters obtain securities to be offered to the public. SEC Form B1 SEC Form B1 is the prospectus form that a company must file to provide additional information that was not included in its initial prospectus filing upon registration. Rule Rule is an SEC rule regulates the resale of restricted or unregistered securities.
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