Filing Requirements

AuthorStephanie Tsacoumis
ProfessionRecognized securities law practitioner and professor at Georgetown Law Center
Filing Requirements
Securities Offerings
Basics of the 1933 Act
The 1933 Act takes a transaction- based approach that requires com-
panies to make disclosures when issuing securities to the public.
Specically, offers to buy or sell securities are forbidden until the
applicable form containing specied disclosures (a “registration
statement”) has been led with the SEC. Sales of securities may
not be consummated until the applicable registration statement
is deemed “effective” by the SEC. (These restrictions and registra-
tion requirements do not apply to exempt offerings, such as private
placements, where different requirements apply, or to offerings of
exempt securities, such as short- term commercial paper.)
An “offer” is dened broadly to include “every attempt or offer to dispose of,
or solicitation of an offer to buy a security... for value.” Any communication
that may “contribute to conditioning the public mind or arousing public
interest” in a securities offering may be an offer under the 33 Act.
The specic circumstances are important. Communications that have been
deemed to constitute “offers” include:
• A New York Times interview of the CEO of a company with an IPO reg-
istration statement pending at the SEC, during which the CEO discussed
aspects of the company’s business and its competitors.
42 What Must Public Companies Disclose?
A magazine story quoting the founders of a popular search engine, one
week before ling their IPO registration statement with the SEC, as they
addressed how going public might inuence corporate culture.
Examples of communications that may fall outside of the denition of
“offer” include ordinary factual business communications that are regularly
released, such as product advertising and press releases regarding factual
developments in the business.
These 33 Act provisions effectively divide the registration process
into three distinct time periods: the preling or quiet; waiting; and
posteffective periods.
Preling or Quiet Period
The preling or quiet period begins when a company decides
to proceed with a public offering (usually by retaining one or more
investment banks to undertake the offering) and ends when the reg-
istration statement is rst led publicly with the SEC. Nothing that
would be considered to be an offer of securities generally is permit-
ted during the preling period (although the SEC has expanded the
extent to which “test the waters” communications are permitted).
Waiting Period
The waiting period extends from the time of publicly ling the
registration statement until the SEC staff declares the registration
statement effective. During the waiting period, no sales of securi-
ties are permitted. Under the statute, oral offers are permitted and
written offers must meet the statutory requirements for a “prospec-
tus,” which is broadly dened to encompass a wide range of offering-
related communications. Because the SEC considers many forms of
oral communications— such as TV broadcasts, voicemail messages,
and recorded presentations— to constitute “writings” for this pur-
pose, communications during the waiting period must be carefully
designed and effectuated.
Impermissible advertising or publicity of the offering during the
waiting period, often called “gun jumping,” could delay effectiveness
Chapter3 Filing Requirements 43
of the registration statement to allow for a “cooling off period”
and, depending on the circumstances, could require disclosure in
the prospectus about the contingent liabilities created by the viola-
tion. The SEC also can assess administrative penalties against those
responsible for improper offer- related activity.
Posteffective Period
During the posteffective period, after the registration state-
ment is effective, underwriters and other distribution participants
may sell the securities by means of a nal prospectus meeting 33
Act requirements. The 33 Act continues to govern publicity and the
sales process until the distribution of securities is completed or the
expiration of the period during which underwriters must deliver a
nal prospectus, if later.
Consequences of Violations
Violations of 33 Act provisions regarding offers and sales of secu-
rities could have adverse consequences. Most signicantly, any inves-
tor who buys securities in a transaction that did not properly adhere
to the restrictions relating to offers and sales can rescind the sale
and recover the purchase price paid (plus interest less any distribu-
tions with respect to the security). In other words, the investor could
return the securities to the seller— no questions asked and no other
proof required— at any time during the year following the sale; the
investor in effect receives a “put” right.
Registration Statement Requirements
The disclosure focus of the 33 Act is embodied in the requirements
that a registration statement containing prescribed disclosures be
led and become effective and that a nal prospectus (which is a
signicant component of the registration statement) be delivered to
investors. The information required to be contained in a registration
statement was specied in Schedule A to the 33 Act and was later
reected in SEC regulations, culminating in Regulation S-K, which
today sets forth key public company disclosure requirements under
both the 33 and 34 Acts.

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