Securities Act rules interps // Cooley // Global Law Firm

By Cydney Posner

As previously noted, the staff of Corp Fin has posted a large volume of interps of the rules under the 1933 Act. I previously distributed an abbreviated version of the Rule 144 interps. Below is an abbreviated version of the remaining interps, other than those under Reg D, Rule 701 and Reg S.

Rule 134 — Communications Not Deemed a Prospectus

Rule 134 does not authorize the inclusion in tombstone ads of photographs of investment properties or descriptions of the tax benefits of investments.
A tombstone ad prepared pursuant to Rule 134 for use in connection with a registered public offering generally can be provided to existing shareholders along with a regularly provided quarterly report during the pre-effective period.
A broker-dealer participating in a registered public offering may send its clients a small reply card, along with a copy of a tombstone advertisement, to assist customers who wish to request a copy of the prospectus.
Although suitability requirements are not permitted under a literal reading of Rule 134, Rule 134(a)(16) does permit the inclusion of "any statement or legend required by any state law or administrative authority." In light of the position by the California Department of Corporations that advertisements for direct participation programs (limited partnerships) must include suitability requirements, issuers may use suitability requirements in Rule 134 advertisements distributed in California when they are included to comply with the Department’s position.
Tombstone ads may contain a statement that the securities would be subject to early redemption or could be called by the issuer.
A commodity fund was advised that even though it bears some resemblance to an investment company, this fact does not automatically entitle it to include in its Rule 134 notice all of the information about its business that investment companies are permitted to include pursuant to Rule 482. The fund was reminded that Rule 134 permits only a brief indication of an issuer’s business.

Rule 135 — Notice of Proposed Registered Offerings

A press release issued pursuant to Rule 135 in connection with an IPO may state that the shares to be offered have not yet been authorized and therefore their issuance is subject to shareholder approval.
A letter to be sent to holders of limited partnership units in various oil and gas programs, for the purpose of determining their interest in converting the smaller programs into one new large program, may involve the offer of a security of the new program within the meaning of Sections 2(a)(3) and (5). Any such communication, if it is an offer, would either have to be registered under the Securities Act or exempt from registration. For registered offerings, Rule 135 would permit a simple notice describing the purpose and terms of such an offering, but would not allow the solicitation of indications of interest.
A cash out merger of Company A by Company B has been approved by Company B’s shareholders. Prior to consummation of the merger, Company B intends to make a registered public offering and proposes to send a Rule 135 notice to Company A’s shareholders. That notice would come within the term "publishe[d] through any medium" in Rule 135 and thus is permissible.

Rule 139 — Publications or Distributions of Research Reports by Brokers or Dealers Distributing Securities

Rule 139 defines "offer for sale" in relation to certain dealer publications and provides limited relief from the application of Section 5 to those publications when used in connection with registered offerings by reporting companies or certain foreign private issuers with offshore trading histories or that have a $700 million worldwide public float. The rule cannot be extended by analogy to offerings of other non-reporting companies, since the public availability of the information contained in Exchange Act reports is a fundamental basis of the rule.
A reporting company filed a registration statement on Form S-4 for a Rule 145 merger transaction. Shareholders had voted to approve the transaction and no further shareholder vote regarding valuation contingencies was required. The approval of a regulatory authority was needed before the transaction could be closed. On these facts, the sale of the shares occurred when shareholders voted to approve the merger; accordingly, the registered offering had been completed for purposes of Rule 139.
The broker-dealer that acted as underwriter in an IPO now has a small long position in the underwritten stock in its investment account as a result of bad orders. The issue otherwise sold out. On these facts, the distribution was concluded for purposes of the Rule 139 safe harbor provisions, notwithstanding the stock held in the investment account. As a result, the broker-dealer could make recommendations regarding the issuer’s securities without concern that those recommendations would be deemed to be offers or sales.

Rule 140 — Definition of "Distribution" in Section 2(a)(11) for Certain Transactions

A limited liability company sought to issue to its employees the stock of its financing member, which has the sole purpose of issuing stock to the public and investing the proceeds in the LLC’s securities. Because of this relationship, Rule 140 requires the LLC to register as co-issuer on any Securities Act registration statement filed by the financing member for the sale of the financing member’s stock. Accordingly, the LLC would be included as a registrant on any Form S-8 filed by the financing member. It is therefore not necessary to analyze whether the financing member is a "subsidiary" of the LLC for purposes of determining whether the finance member may register its stock on Form S-8 for sale to employees of its "parent."

Rule 144A — Private Resales of Securities to Institutions

Rule 144A is available to any person other than the issuer; therefore, affiliates of the issuer may make resales of eligible securities under Rule 144A. For purposes of Rule 144A(b), "issuer" has only the meaning given by Securities Act Section 2(a)(4). (The "control" clause of Section 2(a)(11) equates the issuer and its affiliates solely for the purpose of identifying "underwriters" to the public market. By definition, sales effected under Rule 144A are not made to the public market.)
In determining its status as a QIB eligible to participate in the offering, a buyer may not include the amount of securities expected to be purchased in the offering when calculating the amount of securities it owns or invests on a discretionary basis.

Rule 145 — Reclassification of Securities, Mergers, Consolidations and Acquisitions of Assets

An issuer that plans to register a Rule 145 transaction, and whose proxy statement will necessarily contain unrelated items such as election of directors, can avoid Securities Act liability for the unrelated items by filing a Form S-1 registration statement dealing solely with the Rule 145 transaction and incorporating the S-1 prospectus by reference into its proxy statement.
A person subject to Rule 145(c) who is selling both Rule 145 shares and shares not subject to Rule 144(e) need not take into account the sales of the shares not subject to Rule 144(e) in determining whether the volume limitation of Rule 145(d) has been exceeded.
The exception from Rule 145 provided by Rule 145(a)(2) for a change in domicile is not available when, in addition to a change in domicile, a new organizational structure is created, such as a new holding company.
If a corporation determines to sell its assets for a promissory note issued by another corporation, but will not distribute interests in the note to its shareholders, the transaction is not a "transfer of assets" within the meaning of Rule 145(a)(3).
Sales in reliance on Rule 145(d) cannot be made before the one-year period in Rule 144(i)(2) is met.
In determining the Rule 145(d)(2) holding period, the holding period for restricted securities surrendered in a Rule 145 transaction cannot be tacked to the holding period for the shares received. See Rule 144(d)(3)(viii).
A registration statement on Form S-4 is filed to register stock to be issued in the acquisition of a non-reporting company by a reporting company. Even though only the non-reporting company will solicit proxies and therefore the solicitation is not subject to Reg14A, it nevertheless will involve a "sale" under Rule 145. As a result, it cannot be consummated without an effective registration statement and, accordingly, a proxy card can be sent only with the Rule 424(b) prospectus, not with the red herring.
A holding company reorganization was to be carried out pursuant to Section 251(g) of the DGCL and would not trigger a shareholder vote or appraisal rights. The reorganization was linked to an acquisition transaction with a third party (i.e., its consummation was a condition to closing with respect to the acquisition agreement). The purpose of the reorganization was to obtain more favorable tax treatment for the acquisition. When viewed together with the acquisition, the overall transaction changed the nature of the shareholders’ investment. Therefore the reorganization would involve a "sale" or "offer to sell" for the purposes of Securities Act Section 2(a)(3) and Rule 145.
A change from business trust status in one state to corporate status in another state would not be within the change of domicile exception of Rule 145(a)(2) because of the significant change in organizational structure that will occur.
For purposes of Section 2(a)(3), statutory mergers by means of security holders’ vote are defined by Rule 145(a)(2) as events of sale. The rule excludes from this definition mergers for the sole purpose of changing the issuer's state of incorporation. The exclusion itself is limited to migratory transactions occurring exclusively within the United States, from one state to another. Despite the rule’s express domestic limitation, similar transactions changing a foreign issuer’s domicile from one political subdivision of a country to another (such as reincorporation from one Canadian province to another) likewise should not be treated as a sale. However, if a non-U.S. corporation undertakes a merger to incorporate within the United States, the migratory transaction is an event of sale that must be registered with the SEC or exempt from registration.
Item 17(b)(7) of Form S-4 states generally that the financial statements of acquired companies that were not previously Exchange Act reporting companies need be audited only to the extent practicable, unless the Form S-4 prospectus is to be used for resales by any person deemed an underwriter within the meaning of Rule 145(c), in which case the financial statements must be audited. The staff was asked whether a resale pursuant to Rule 145(d), in lieu of the Form S-4 prospectus, would require the financial statements to be audited. The staff noted that Rule 145(d) is not included in the Instruction to Item 9.01 of Form 8-K permitting sales pursuant to Rule 144 during the 71-day extension period for filing financial statements. As the audited financial statements for the acquired company would be required pursuant to Item 9.01 of Form 8-K, a resale pursuant to Rule 145(d) would not be permitted until they are filed.
A proposed Rule 145 merger is submitted for a vote of shareholders at an annual meeting at which directors are also to be elected. Incumbent directors would be deemed "underwriters" with respect to the securities issuable in the merger transaction for purposes of paragraph (c) of Rule 145, even though they are not candidates for reelection.
A former affiliate of a shell company that was acquired in a registered Rule 145 transaction received four percent of the outstanding shares of the acquiring company. Although Rule 145(d)(2)(i) would permit the former affiliate (who was not an affiliate of the acquiring company) to sell publicly one percent of the outstanding shares every three months, the former affiliate wishes to sell the entire four percent in a single transaction. Rule 145(d) did not preclude a private sale of the entire amount, but the buyer in any such private transaction would have to step into the shoes of the seller and comply with Rule 145(d) in making public resales of the securities.
A person subject to Rule 145(c) converts preferred stock received in a Rule 145 transaction into common stock. Such person may tack the holding period for the preferred to that of the common in determining eligibility to use Rule 145(d)(2) to the extent permitted by Rule 144(d).
A partnership distributes restricted shares of shell company A to its partners, X and Y. X and Y hold enough shares of A to be deemed to be affiliates. Consequently, when corporation B later acquires shell company A, and the shares of A are exchanged for shares of B, the two partners must sell their shares of B pursuant to Rule 145(d), as Rule 145(c) applies because A is a shell company. However, they need not aggregate their sales for purposes of the volume limitation of paragraph (e) of Rule 144, except to the extent that they are acting in concert or are the same person for purposes of Rule 144.
An affiliate of company A acquires securities of company B in a Rule 145 transaction. The affiliate gives some of those securities to a charity, and then — some time later — becomes an affiliate of B. Although the affiliate must now sell B shares pursuant to all the provisions of Rule 144 since that person is an affiliate of B, the charity can continue to sell pursuant to the provisions of Rule 145(d), to the extent Rule 145(c) applies.
X acquires stock in a registered Rule 145 offering, but is subject to the resale restrictions of Rule 145(d) because X is an affiliate of the acquired company and Rule 145(c) applies. Pursuant to and on or subsequent to the date of a court-approved divorce settlement, X transfers some of the shares to spouse Y who is not an affiliate. The shares are not subject to resale restrictions in Y’s hands because Y is not subject to the Rule 145(d) restrictions and the resale status of a spouse receiving securities in a divorce proceeding under these circumstances will be determined by the status of Y and not by the status of X.
Less than six months after a Rule 145 transaction, a person deemed to be an underwriter by Rule 145(c) dies. The estate of the 145(c) underwriter may in general sell publicly in the same manner the decedent could have, that is, under paragraphs (c), (e), (f), and (g) of Rule 144, which apply due to Rule 145(d)(2)(i). If the estate is not an affiliate of the issuer, it will be able to sell subject only to the current public information requirement in Rule 144(c) because of the relief provided to unaffiliated estates by Rule 144(e) and Rule 144(f).

Rule 147 — "Part of an Issue," "Person Resident," and "Doing Business Within" for Purposes of Section 3(a)(11)

An issuer may rely on Rule 147 to offer or sell securities within a single state to a person whose principal residence is in that state, even if the person resides temporarily out of the state.
A broker-dealer may distribute securities in an intrastate offering made in reliance on Rule 147 without jeopardizing the exemption available under that rule.
There is no prohibition in Rule 147 on general advertising or general solicitation. However, any general advertising or solicitation must be conducted in a manner consistent with the requirement that offers made in reliance on Section 3(a)(11) and Rule 147 be made only to persons resident within the state or territory of which the issuer is a resident.
A local bank, whose shares are held only by Texas residents, is planning to form a bank holding company and exchange shares with its shareholders under Rule 147. If shareholders move out of state during the time required to obtain regulatory approvals, such shareholders may be "cashed out" to retain the Rule 147 exemption, assuming cashing out is permitted under the applicable state law.
A family trust is located in a state where a Rule 147 offering is to be made. A beneficiary with a half-interest in the trust resides in another state. The trust may not be offered securities or purchase securities in the Rule 147 offering.

Rule 155 — Integration of Abandoned Offerings

An issuer can rely on Rule 155(b) for an abandoned private offering followed by a shelf takedown, even if the shelf registration statement was filed prior to the private offering, provided that the takedown is not done until after the time provided in Rule 155(b).
An issuer that is unsuccessful in completing an offering as a takedown from an existing shelf registration statement may rely on Rule 155(c) to complete the offering privately. In a shelf offering, the filing of a prospectus supplement disclosing the termination of the offering is deemed to satisfy the Rule 155(c)(2) requirement to withdraw the registration statement.
Rule 155(c)(5) requires any written disclosure document used in the subsequent private offering to disclose any changes in the issuer’s business or financial condition that occurred after the issuer filed the registration statement and are material to the investment decision in the private offering. This requirement applies whether the written disclosure is provided on a mandatory (Rule 502(b)(1)) or voluntary basis.

Rule 163 — Exemption from Section 5(c) of the Act for Certain Communications by or on Behalf of WKSIs

If an issuer has not previously filed any shelf registration statement and at the date of its last Form 10-K did not qualify as a WKSI, it would not be able to determine its status as a WKSI at the time it wants to rely on Rule 163 for pre-filing offers. The definition of a WKSI permits an issuer to evaluate its status as a WKSI only upon specified events; the date of intended reliance on Rule 163 is not one of those events. Therefore, in those circumstances, the issuer’s status would not change until it either files a shelf registration statement or files its next Form 10-K.
Rule 163 is not available for use for communications by an underwriter, even if the issuer previously authorized the communication.

Rule 172 — Delivery of Prospectuses

Rule 172 is available to dealers that participate in the underwriting, including selling an unsold allotment, as well as to dealers that do not participate. A dealer may not rely on Rule 174 to not deliver a prospectus when the dealer is participating in the offering or is selling an unsold allotment. When Section 4(3) requires delivery of a prospectus, the dealer may rely on Rule 172 to satisfy its delivery obligation, except in the case of offerings of blank check companies.
Clause (a) of Section 2(a)(10) provides an exception from the definition of "prospectus" (as defined in Section 2(a)(10)) for a communication that is sent or given after the effective date of the registration statement if "it is proved that prior to or at the same time with such communication a written prospectus meeting the requirements of subsection (a) of [S]ection 10 at the time of such communication was sent or given to the person to whom the communication was made." Rule 172 is not available to satisfy the condition to the exception in clause (a) of Section 2(a)(10) that the Section 10(a) prospectus be "sent or given to the person to whom the communication was made." Rule 172 provides that a final Section 10(a) prospectus will be deemed to precede or accompany the carrying or delivery of a security for sale for purposes of Section 5(b)(2) and provides a conditional exemption from Securities Act Section 5(b)(1) for written confirmations and notices of allocations. As the SEC stated in Securities Act Release No. 8591 (July 19, 2005), at footnote 561, "a final prospectus only filed as provided in Rule 172 will not be considered to be sent or given prior to or with a written offer within the meaning of clause (a) of Securities Act Section 2(a)(10)."
Special purpose acquisition companies (SPACs) can rely on Rule 172 to satisfy their prospectus delivery obligations following their IPOs.
Selling security holders with a prospectus delivery obligation may rely on Rule 172.

Rule 173 — Notice of Registration

Rule 173 requires that each underwriter or dealer participating in a registered offering must provide to each of its purchasers a copy of the final prospectus or, in lieu of the final prospectus, a notice that the sale was made pursuant to a registration statement, within two business days following the "completion of such sale." For purposes of Rule 173, "completion of such sale" means the date of settlement. The date of sale under Securities Act Section 2(a)(3) may be earlier than the date of the "completion of such sale."
The requirement to "provide" the Rule 173 notice requires that the notice be sent, not necessarily received, within two business days. Accordingly, an issuer, underwriter or dealer that intends to deliver a Rule 173 notice in lieu of a final prospectus need not ensure that the notice is received by the purchaser within two business days in order to comply with the Rule 173 requirement to "provide" the Rule 173 notice "not later than two business days following the completion of such sale.

Rule 174 — Delivery of Prospectus by Dealers; Exemptions Under Section 4(3) of the Act

Rule 172 is available to dealers that participate in the underwriting, including selling an unsold allotment, as well as to dealers that do not participate. A dealer may not rely on Rule 174 to not deliver a prospectus when the dealer is participating in the offering or is selling an unsold allotment. When Section 4(3) requires delivery of a prospectus, the dealer may rely on Rule 172 to satisfy its delivery obligation, except in the case of offerings of blank check companies.
During the post-IPO Rule 174 prospectus delivery period, a registrant considering making a material acquisition that it considers probable would need to supplement the prospectus as appropriate so that it complies with Securities Act Section 10(a) at the time of any delivery required pursuant to Rule 174.
Company A, which does not report under the Exchange Act but is a wholly owned subsidiary of an Exchange Act reporting parent, proposes to use Form S-3 to issue debt securities that would be fully and unconditionally guaranteed by its parent. The exemption from prospectus delivery requirements provided by Rule 174(b) would be available for this offering because the parent would be subject to the Exchange Act reporting requirements immediately prior to the time of filing the registration statement, Company A would be wholly owned by parent and parent would fully and unconditionally guarantee the debt securities.
If an exchange has approved an issue for trading as of the earlier of the effective date or the day the offering commences, but actual trading cannot commence until closing, with when-issued trading occurring in the interim, Rule 174(d) would be available for the when-issued trading.
The prospectus delivery requirements of Rule 174(d) apply in the context of savings and loan conversions, when a subscription offering to existing depositors at a specified price range is followed by an offering to the general public at a fixed price. The commencement of the subscription offer would be the commencement of a bona fide public offering for purposes of Rule 174(d). Although the security would not commence trading until closing, if, as of commencement of the offering, the security is authorized for inclusion in an electronic inter-dealer quotation system sponsored and governed by the rules of a registered securities association, the 25-day prospectus delivery period of Rule 174(d) would be available.
Rule 174 shortens to 25 days the prospectus delivery period for IPOs that are immediately listed for trading on an exchange or eligible for quotation on an automated quotation system of a national securities association. However, Exchange Act Rule 15c2-8(d) provides that broker-dealers must continue to deliver the same prospectuses, upon request, for the full 90-day period. While Rule 174(d) relieves broker-dealers of an obligation to deliver prospectuses in connection with every deal during the full 90-day period, it does not change broker-dealers’ obligations to deliver prospectuses upon request during that time.

Rule 175 — Liability for Certain Statements by Issuers

Rule 175 provides a safe harbor for forward-looking statements made by or on behalf of an issuer that are contained in (1) a document filed with the SEC, (2) Part I of a Form 10-Q or (3) an annual report to security holders meeting the requirements of Exchange Act Rule 14a-3(b) and (c) or Rule 14c-3(a) and (b). The safe harbor of Rule 175 also applies to statements made in a Form 6-K, notwithstanding the fact that Form 6-K is not explicitly mentioned in Rule 175 and the form is submitted and not "filed." The rationale for the forward-looking statements safe harbor applies with equal force to statements in Form 6-K reports as it does to statements in annual reports and Form 10-Q reports.

Rule 236 — Exemption of Shares Offered in Connection with Certain Transactions

Rule 236 provides an exemption from Securities Act registration for the aggregation of fractional shares in connection with certain transactions. The rule requires that specified information be furnished to the SEC at least 10 days prior to the offering. To provide this information, a letter should be sent to the SEC that specifies the nature of the submission. No fee is applicable.

Rule 401 — Requirements as to Proper Form

When an issuer with an effective Form S-3 registration statement no longer satisfies the applicable Form S-3 requirements, the issuer can update the registration statement for purposes of complying with Section 10(a)(3) by filing a post-effective amendment on a Securities Act registration form for which it qualifies at the time of filing that amendment, such as a Form S-1 or Form S-11.
A registrant has an effective registration statement on Form S-3, but at the time of filing its Form 10-K, it no longer satisfies the eligibility requirements of Form S-3. For purposes of Rule 401(b), the filing of a Form 10-K containing the registrant’s audited financial statements for its most recently completed fiscal year operates as a Section 10(a)(3) update to a Form S-3 registration statement. Therefore, if a registrant was not eligible to use Form S-3 at the time of the updating through the filing of the Form 10-K, it would be required to file a post-effective amendment on whatever other Securities Act registration form would be available to the registrant at the time.
An issuer’s loss of eligibility to use a registration form after effectiveness and before its Section 10(a)(3) update will not affect its ability to use that registration statement until the time of its Section 10(a)(3) update. If a WKSI has filed an automatic shelf registration statement but is no longer a WKSI at the time of its Section 10(a)(3) update, the issuer would be required to amend its automatic shelf registration statement onto a form it is then eligible to use to offer and sell securities.
Rule 401(e) permits a registrant updating a Form S-1 registration statement pursuant to Section 10(a)(3) to file a post-effective amendment on Form S-3 if it is eligible to use that form with respect to that offering at the time the amendment is filed. The registrant could not, however, convert the Form S-1 to an automatic shelf registration statement by filing a post-effective amendment.
An issuer may file or use an automatic shelf registration statement on Form S-3 after the issuer has filed its Form 10-K but prior to filing the Part III information that will be incorporated by reference into the Form 10-K. However, issuers are responsible for ensuring that any prospectus used in connection with a registered offering contains the information required to be included therein by Section 10(a) and Schedule A.
If a WKSI with an effective automatic shelf registration statement will no longer be a WKSI at the time of filing its Form 10-K (which acts as a 10(a)(3) post-effective amendment), it will no longer be eligible to rely on General Instruction I.D to Form S-3. If that issuer will remain eligible to conduct primary offerings under General Instruction I.B.1 or I.B.2 of Form S-3, the issuer may continue to offer and sell securities using the automatic shelf, but only if, prior to filing the Form 10-K, the issuer amends the automatic shelf registration statement so that it conforms to the requirements that apply to a Form S-3 filed in reliance on General Instruction I.B.1 or I.B.2. Specifically, the following conditions must be satisfied:
- Prior to filing the Form 10-K, the issuer must file a post-effective amendment to the automatic shelf registration statement (on EDGAR submission type POSASR) to register a specific amount of securities and to pay the associated filing fee;
- The prospectus included in the post-effective amendment to the automatic shelf registration statement may not omit information in reliance on provisions of Rule 430B that are available only to automatic shelf registration statements and instead must contain all information required to be included in a Form S-3 filed in reliance on General Instruction I.B.1 or I.B.2; and
- The issuer must remain eligible to use Form S-3 in reliance on General Instruction I.B.1 or I.B.2 at the time of the filing of the Form 10-K.
At least promptly after the Form 10-K is filed, the issuer must file either a post-effective amendment using EDGAR submission type POS AM or a new Form S-3 registration statement using EDGAR submission type S-3 to convert the Form S-3 to the proper EDGAR submission type for a non-automatic shelf registration statement. Pending the effectiveness of the filing, the issuer may continue to offer and sell securities using the amended automatic shelf registration statement.
As set forth in Rule 401, a registration statement must meet the form requirements at the time it is first filed as well as at the time of any 10(a)(3) post-effective amendment. An issuer may change a registration statement to any other form for which it is then eligible by pre-effective or post-effective amendment, except that an issuer may not file a pre-effective or post-effective amendment to change a registration statement that is not an automatic shelf into an automatic shelf. Instead, the issuer must file a new registration statement on Form S-3 or Form F-3, designated as an automatic shelf. Except for registration statements and post-effective amendments described in Rule 401(g) (generally, Rule 462 registration statements, post-effective amendments to S-8s and certain S-3s, automatic shelf registration statements and limited offerings on Form S-3 by smaller issuers), once a registration statement is declared effective, it is deemed to be on the proper form.
Pursuant to Instruction 3 to the signature requirements for Form S-3, a corporation may sign and file a registration statement on Form S-3 for an offering of non-convertible debt or preferred securities if it has a reasonable basis to believe that the investment rating of such securities at the time of sale will permit use of the form. If an investment grade rating is not received, a post-effective amendment would be required when the issuer cannot satisfy Form S-3 eligibility requirements without such a rating.
At the time of filing, all requirements were met for use of a Form S-3 for a secondary offering. After effectiveness, a dividend payment on certain preferred stock was missed. The registrant may continue to use the effective Form S-3 so long as there is no need to update the registration statement for purposes of Securities Act Section 10(a)(3). At the time that updating is necessary, Rule 401 would require the use of whatever form is available to the registrant at that time.

Rule 405 — Definition of Terms

The Rule 405 definition of "employee benefit plan" states that consultants or advisors may participate in an employee benefit plan only if (1) they are natural persons, (2) they provide bona fide services to the registrant, and (3) the services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the registrant’s securities. Form S-8 cannot be used to register securities issuable under a plan that permits consultants to be compensated for capital-raising services, as well as services that qualify under Rule 405, because the plan does not satisfy the Rule 405 definition of "employee benefit plan."
While securities issuable under an option plan that permits the issuance of transferable options can be registered on Form S-8, a non-employee (other than an employee’s family member who acquires an option from an employee through a gift or domestic relations order) cannot exercise options under the Form S-8. In addition, when an issuer sponsors a program or otherwise actively arranges for employees to sell employee benefit plan options or otherwise transfer employee benefit plan options to persons who are not family members, the plan no longer would be "solely for employees" and the other persons specified in the Rule 405 definition of "employee benefit plan." In this situation, securities issuable under the plan could not continue to be registered on Form S-8 unless a plan amendment removes the transferred options and the securities underlying them from the plan, so that the plan would continue to satisfy the Rule 405 definition of "employee benefit plan."
The definition of "ineligible issuer" in Rule 405 includes an issuer, or any entity that at the time was a subsidiary of the issuer, that within the past three years "was convicted of any felony or misdemeanor described in paragraphs (i) through (iv) of [S]ection 15(b)(4)(B) of the Securities Exchange Act of 1934." A conviction by a foreign court as to the activities described in these paragraphs would trigger ineligibility under the definition.
A wholly-owned finance subsidiary of a WKSI formed to sell non-convertible debt that will be fully and unconditionally guaranteed by the WKSI has, prior to the first offer and sale of the debt securities, only nominal assets and operations. However, assuming the finance subsidiary satisfies the conditions of a WKSI majority-owned subsidiary and is not otherwise an ineligible issuer, the finance subsidiary borrowing with its parent’s full and unconditional guarantee would not be a shell company for purposes of the definition of ineligible issuer.
An issuer whose predecessor had previously been in bankruptcy is planning an IPO under a Form S-1 that would include audited financial statements of the issuer following its emergence from bankruptcy. Under the definition of "ineligible issuer," an issuer’s ineligibility due to a bankruptcy filing terminates when the issuer files audited financial statements in an annual report subsequent to its emergence from bankruptcy. The issuer would not continue to be an "ineligible issuer" if it included audited financials in the Form S-1, even though it did not file an annual report. The issuer would have emerged from bankruptcy prior to the filing of the registration statement and its audited financial statements filed as part of its registration statement would be of the entity as of a date after it emerged from bankruptcy.
Under Rule 405, a limited partnership that "is offering and selling its securities other than through a firm commitment underwriting" is an ineligible issuer. A master limited partnership is an "ineligible issuer" with respect to any offerings conducted on other than a firm commitment underwritten basis, including resales by selling security holders, even if just occasional. For any offering conducted on a firm commitment basis, the master limited partnership would not be an ineligible issuer.
An issuer is an "ineligible issuer" that may not incorporate by reference into a Form S-1 if any registered securities offering (whether primary or resale) or any private primary securities offering occurred during the three-year look-back window at a time when the issuer’s securities would have qualified as penny stock. The issuer would not, however, need to consider unregistered resale transactions in making this determination.
In determining whether an issuer qualifies as a penny stock issuer that is an ineligible issuer under Rule 405, the issuer must consider offerings registered on Form S-8 even if no sales were made during the applicable three-year window. Offers registered on Form S-8 would be considered ongoing offers during the pendency of the registration statement and therefore may result in the issuer being considered a penny stock issuer, whether or not sales occurred at a time when the issuer’s stock would have qualified as penny stock.
A company with a December 31 fiscal year-end emerged from bankruptcy in mid-January of 2008. In March 2008, the company filed a Form 10-K with audited financial statements for the fiscal year ended December 31, 2007. The Form 10-K did not include audited financial statements for the period in the beginning of January prior to the company’s emergence from bankruptcy. The company will remain an "ineligible issuer" pursuant to sub-paragraph (1)(iv)(B) of the definition of "ineligible issuer" in Rule 405 until it files audited financial statements for a period ending subsequent to its emergence from bankruptcy.
An issuer that has not previously filed a shelf registration statement believes that it meets the test for WKSI status and decides to file an automatic shelf registration statement. The issuer’s initial determination date for WKSI status will be the time it files the automatic shelf registration statement. The same is true for an issuer with an effective shelf registration statement that decides to file an automatic shelf registration statement.
If a WKSI files an automatic shelf registration statement, its status as a WKSI will be re-evaluated when it files its Form 10-K or Form 20-F for the fiscal year in which the automatic shelf registration statement is filed and becomes effective. For example, an issuer with a December 31 fiscal year end that files an automatic shelf registration statement on August 15, 2006 and files its Form 10-K for its 2006 fiscal year on February 28, 2007, must re-evaluate its WKSI status on the date it files that Form 10-K. For purposes of Section 10(a)(3), Item 512(b) of Reg S-K provides that "each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 … that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein …" Further, issuers are required to indicate their WKSI status on the cover page of the Form 10-K or Form 20-F. When an issuer that was a WKSI and has an effective automatic shelf registration statement determines that it no longer is a WKSI at the time it files its annual report (or on the due date of such report in the event the annual report is not filed by the due date of the Section 10(a)(3) update), that issuer should amend its automatic shelf registration statement on the form that it is then eligible to use.
A Canadian issuer filing annual reports on Form 40-F under the Multi-Jurisdictional Disclosure System cannot be a WKSI under the definition in Rule 405. Only issuers filing annual reports on Form 10-K or Form 20-F are eligible to be WKSIs. The SEC’s intent to limit WKSI status to only those issuers filing annual reports on Form 10-K and Form 20-F is evidenced by, among other things, the fact that Form 40-F was not revised to include either a WKSI check box or to require the disclosure of unresolved staff comments (each of which the SEC included in amended Form 10-K and Form 20-F).
If an issuer has not previously filed any shelf registration statement and at the date of its last Form 10-K did not qualify as a WKSI, it would not be able to determine its status as a WKSI at the time it wants to rely on Rule 163 for pre-filing offers.. The definition of WKSI permits an issuer to evaluate its status as a WKSI only upon specified events; the date of intended reliance on Rule 163 is not one of those events. Therefore, if there is no shelf registration statement on file and the issuer did not satisfy the definition of well-known seasoned issuer at the time it filed its most recent Form 10-K, the issuer’s status would not change until it either files a shelf registration statement or files its next Form 10-K.
A WKSI with an effective automatic shelf registration statement filed a Form 10-K prior to the Form 10-K due date. Because the Form 10-K failed to include audited financial statements and was therefore materially deficient, the issuer planned to amend the Form 10-K, and asked whether eligibility as a WKSI would be reassessed at the time of the amendment. Rule 405 requires an issuer to reassess its WKSI status at the time it files a Form 10-K to update a shelf registration statement for Section 10(a)(3) purposes. Under these facts, as the originally filed Form 10-K was so materially deficient that it would not be considered filed for purposes of assessing form eligibility, the issuer would need to reassess its WKSI status at the time it files its amended Form 10-K. If the amended Form 10-K is not filed by the Form 10-K due date, the issuer would not be eligible as a WKSI on or after that due date, because it would not be timely in its Exchange Act filings.
The definition of WKSI refers to the time of filing of an issuer’s "most recent shelf registration statement." An issuer’s most recent shelf could include a Form S-4 or Form S-8 or any registration statement filed in reliance on Rule 415.
In the definition of WKSI, the phrase "within 60 days of the determination date" include only the 60 days before, not the 60 days after, filing the registration statement or the Section 10(a)(3) update.
If a spun-off subsidiary meets the conditions discussed in Questions 8 and 9 of Staff Legal Bulletin No. 4, including the requirement that the subsidiary have substantially the same assets, business and operations as a segment or subsidiary about which the parent has reported extensive segment data and other financial and narrative disclosure for at least 12 months prior to the spin-off, the subsidiary may rely on the parent’s pre-spin-off reporting history for purposes of evaluating whether the subsidiary is a WKSI and eligible to file a Form S-3ASR. The spun-off subsidiary also would need to independently meet all other requirements for WKSI status. It should be noted that if a spun-off entity relies on its parent’s reporting history for purposes of filing a Form S-3 or a Form S-3ASR, it would need to comply with Items 308(a) and 308(b) of Reg S-K in the first annual report that it files, to the extent its parent is required to do so. See Securities Act Release No. 8760 (Dec. 15, 2006), at fn. 76.
Under Rule 405, the definition of "dividend or interest reinvestment plan" would cover a plan whereby limited partners could reinvest cash flow distributions into the partnership for additional partnership interests.

Rule 411 — Incorporation by Reference

A registrant filing a Form S-1 may not include information about a Form S-3 company in its prospectus through incorporation by reference.. This procedure is not authorized by Form S-1 or Rule 411. If the information about the other company is material, it must be set forth in the prospectus in full.
Rule 411(c) permits exhibits to be incorporated by reference from a registration statement filed by another issuer.
A registrant filing a Form S-1 to register an IPO may incorporate by reference exhibits filed with a previous Securities Act registration statement that was withdrawn pursuant to Rule 477. The withdrawn registration statement remains a filed document for purposes of Rule 411(c) and, accordingly, the exhibits may be incorporated by reference.

Rule 412 — Modified or Superseded Documents

A calendar year company proposed to file a registration statement on Form S-3 on February 1, 2006. The registrant would include financial statements for the year ended December 31, 2005, and incorporate its Form 10-K for the year ended December 31, 2004. The registrant was concerned because the financial statements in the 2004 Form 10-K would become out of date. Rule 412(a), however, has the effect in these circumstances of automatically superseding the December 31, 2004 financial statements for purposes of the Form S-3 filing. In the event the registrant wished to remove all doubt about outdated financial statements in the Form 10-K being superseded by later financials included in the Form S-3, Rule 412(b) permits it to include a specific statement in the Form S-3 on the subject.

Rule 413 — Registration of Additional Securities and Additional Classes of Securities

A registrant will not be able to obtain a waiver from the requirement in Rule 413(a) that a post-effective amendment cannot be used to register additional securities to be included in an offering. Unless the registration statement is an automatic shelf registration statement covered by Rule 413(b), the proper procedure is to file a separate registration statement for the offer and sale of the additional securities. The registrant can use a combined prospectus pursuant to Rule 429 for the offering.
However, a pending registration statement may be amended to add additional securities prior to its effective date with the payment of the requisite additional fee.
Where a registration statement on Form S-4 registered insufficient shares to cover shares issuable upon the exercise of options during the period after the effective date of the registration statement but prior to the consummation of the merger, Rule 413(a) does not permit the registration of additional shares by post-effective amendment. The registrant could (1) rely on Rule 462(b) to prepare and file a short-form registration statement provided the amount to be registered was within the 20% limit and the other conditions were met; or (2) file a new registration statement that could be combined with the earlier registration statement pursuant to Rule 429.
In its effective Form S-8, a company registered 500,000 shares for sale by the company pursuant to an option plan, and 1,000 previously unregistered shares for resale on a resale prospectus pursuant to General Instruction C to Form S-8. The company may not rely on General Instruction C.3.(a) (which applies only to control securities and allows the addition of persons to the resale prospectus list of selling shareholders by means of a post-effective amendment or Rule 424(b) prospectus supplement) to shift any of the 500,000 shares registered on the primary portion to the resale prospectus since to do so would amount to registering additional securities by means of a post-effective amendment in contravention of Rule 413.

Rule 414 — Registration by Certain Successor Issuers

Where a California corporation merged with a Delaware corporation to change its domicile, Rule 414 permits the Delaware corporation to use the registration statements of the California corporation by filing an amendment expressly adopting the statements of the predecessor. Because the merger entails the issuance of securities of a corporation different from the original registrant, the amendment should contain a new opinion of counsel on the legality of the issuance and counsel’s consent.
In order for Rule 414 to effect registration of a successor issuer, paragraph (c) requires that the succession be approved by the predecessor’s security holders at a meeting for which proxies were solicited pursuant to Exchange Act Section 14(a) or information was furnished to security holders pursuant to Section 14(c). When the predecessor is a Section 15(d) company rather than a Section 12 company, and thus not subject to Section 14, the requirements of Rule 414(c) will be met when the proxy or information statement is prepared and votes are solicited substantially in accordance with Section 14.
A Form S-4 registration statement will be filed to convert an existing corporation into a trust that will have the same assets and management as its predecessor. Because of applicable tax law or state law provisions, the new trust will not be created until after the Form S-4 has become effective. The company sought advice as to who would be the registrant for the Form S-4 and who should sign the registration statement. Using Rule 414 as a model, the existing company may execute and file the registration statement. At the time the trust is formed, it should file a post-effective amendment adopting the registration statement.

Rule 415 — Delayed or Continuous Offering and Sale of Securities

As a matter of administrative practice, over-allotment options with terms of up to 45 days would not constitute a delayed offering and therefore would not trigger the need to comply with Rule 415.
Securities that are registered on a shelf registration statement pursuant to Rule 415 may be sold concurrently in any of the transactions for which they were registered, such as in both firm commitment underwriting and at-the-market offerings.
There is no presumptive underwriter standard under Rule 415.
If an issuer is eligible to file a shelf registration statement on Form S-3, it may amend a pending non-shelf registration statement to become a shelf registration statement on Form S-3 prior to its effective date.
A registration statement under Rule 415 cannot be made effective without an opinion of counsel as to the legality of the securities being issued, even when no immediate sales are contemplated. However, when sales are not expected in the near future, the registrant may file a qualified opinion of counsel and have its registration statement be made effective, subject to the understanding that an unqualified opinion will be filed prior to the time any sales are made or contracts of sale are entered into with regard to securities covered by the registration statement. An updated opinion of counsel with respect to the legality of the securities being offered may be filed in a Form 8-K report rather than a post-effective amendment to a Form S-3 shelf registration statement.
The existence of an effective registration statement under Rule 415 does not, in and of itself, automatically require that sales under that registration statement be integrated with sales in a separate offering for which an exemption is claimed. However, a takedown off the shelf registration statement may raise integration concerns if the offering is made concurrently with another offering for which an exemption is claimed. See Securities Act Release No. 8828 (Aug. 10, 2007) for guidance on integration in the context of concurrent public and private offerings.
A company may update a Form S-1 for a continuous offering by supplementing the prospectus with a Form 10-Q so long as the Form 10-Q contains no disclosure that would constitute a fundamental change in the information contained in the prospectus. In that event, there is no Item 512(a) requirement to file a post-effective amendment. If the company must update for anti-fraud and Rule 159 purposes, it may do so by a prospectus supplement.
The managing underwriters need not join in the written request for acceleration pursuant to Rule 461 in connection with a shelf registration statement naming potential underwriters.
The combined prospectus technique of Rule 429 may be used in the context of Rule 415, when an amount of securities remains unsold on an earlier shelf registration statement at the time the issuer files a new shelf registration statement, provided that the new shelf registration statement is not an automatic shelf registration statement and complies with Rules 415(a)(5) and (6). Once Rule 429 is used to create a combined prospectus, the prospectus that is a part of the earlier registration statement generally may not be used by itself.
A WKSI may not rely on Rule 429 to combine a prospectus from a prior non-automatic shelf registration statement with the prospectus in a newly filed automatic shelf registration statement. Under Rule 429(b), a registration statement containing a combined prospectus acts, upon effectiveness, as a post-effective amendment to the earlier registration statement whose prospectus is combined in the latest registration statement. Because a registrant cannot file a post-effective amendment to convert a non-automatic shelf registration statement into an automatic shelf registration statement, a WKSI may not rely on Rule 429 to combine a prospectus from a prior non-automatic shelf registration statement with the prospectus in a newly filed automatic shelf registration statement. Instead, a WKSI with unused capacity on a prior non-automatic shelf may either utilize the unused fees upon filing a new automatic shelf registration statement, in accordance with Rule 457(p), or continue to sell off of the old registration statement until the capacity is used up.
When Form S-1 is used for a continuous offering under Rule 415, a post-effective amendment is necessary to meet the requirements of Section 10(a)(3) to reflect fundamental changes or to disclose material changes in the plan of distribution. A post-effective amendment is required to reflect those changes because Form S-1 does not provide for forward incorporation by reference of Exchange Act reports filed after the effective date. Other changes may be made by prospectus supplement to the extent permitted by Rule 424.
When a shelf registration statement is filed on Form S-3 for offerings of securities on a delayed basis under Rule 415(a)(1)(x) and the plan of distribution includes underwritings on a firm commitment basis, in connection with a shelf takedown offering, it is permissible for the registrant to name the participating underwriters in a prospectus supplement and file the underwriting agreement as an exhibit under cover of Form 8-K. See Securities Act Release No. 8591 (July 19, 2005), at fn. 488.
Rule 3-01 of Reg S-X specifies certain time periods (depending on the registrant’s accelerated filer status) in which a "filing," other than on Form 10-K or Form 10, may be made without the balance sheet for the most recent fiscal year end. The rule is conditioned on (1) the registrant’s reasonable and good faith expectation that it will report income for the most recently completed fiscal year and (2) the registrant's having reported income for at least one of the last two fiscal years. A registrant may, however, do a take-down from an already effective Form S-3 shelf during that period and file a prospectus supplement (assuming it is not for the purpose of providing a 10(a)(3) update) under Rule 424 to reflect the take-down, even if the balance sheet for the most recent fiscal year end has not been filed and the registrant does not have a reasonable and good faith expectation that it will report income for the most recently completed fiscal year.
A registration statement on Form S-8, covered by Rule 415, must include all applicable undertakings in Item 512 of Reg S-K, including specifically those in Items 512(a), (b) and (h), but it need not include the undertakings contained in Items 512(a)(5)(i), 512(a)(5)(ii), and 512(a)(6).
Rule 415(a)(1)(i) (secondary sales) excludes from the concept of secondary offerings sales by parents or subsidiaries of the issuer because, as a practical matter, parents and most subsidiaries of an issuer would have enough of an identity of interest with the issuer so as not to be able to make "secondary" offerings of the issuer’s securities. Aside from parents and subsidiaries, affiliates of issuers are not necessarily treated as being the alter egos of the issuers. Under appropriate circumstances, affiliates may make offerings that are deemed to be genuine secondaries.
Pursuant to Rule 415(a)(2), securities registered in reliance on Rule 415(a)(l)(ix) (continuous offering over 30 days) that are not registered on Form S-3 or Form F-3 and securities registered in reliance on Rule 415(a)(1)(viii) (business combinations) may be registered only in an amount that, at the time the registration statement becomes effective, is reasonably expected, based on a bona fide estimate, to be offered and sold within two years from the initial effective date. If unsold securities remain at the end of the two years, the registration statement may continue to be used. There is no requirement that any unsold securities be deregistered at the end of two years, and the registration statement may continue to be used after that time, to the extent permitted by Rule 415(a)(5).
An equity line financing implemented as a primary offering (rather than as a "resale" registration in a private equity line financing), in which the put price is based on or at a discount to the underlying stock’s market price at the time of the put exercise is an "at the market" offering under Rule 415(a)(4) and must comply with the requirements of that rule. Further, to register the primary offering, the company must be eligible to register primary offerings on Form S-3 in reliance on General Instruction I.B.1 or General Instruction I.B.6 of that form or on Form F-3 in reliance on General Instruction I.B.1 or General Instruction I.B.5 of that form. In addition, if a company is relying on General Instruction I.B.6 of Form S-3 or on General Instruction I.B.5 of Form F-3, the total amount of securities issuable under the equity line agreement may represent no more than one-third of the company’s public float at the time of execution of the equity line agreement.
An indenture relating to securities to be issued under an automatic shelf registration statement needs to be qualified under the Trust Indenture Act must be qualified at the time the registration statement relating to those securities becomes effective. Generally, the indenture may not be qualified by post-effective amendment. However, under the automatic shelf registration process, a WKSI is permitted to add securities to an automatic shelf registration statement by means of a post-effective amendment. Because the effectiveness of a registration statement is deemed the time "when registration becomes effective as to such security(ies)," as that term is used in Section 309(a)(1) of the Trust Indenture Act, the WKSI will satisfy Section 309(a)(1) if the indenture is included as an exhibit to the registration statement at the time that post-effective amendment becomes effective. See Securities Act Release No. 8591 (July 19, 2005), at fn. 527.
The following approach has been taken with respect timing of the qualification of the indenture under the Trust Indenture Act in connection with shelf registration statements that contemplate a series of debt offerings under Rule 415:
- The indenture that is filed with, and qualified upon the effectiveness of, the registration statement may be "open-ended" (i.e., it may provide a generic, non-specific description of the securities, such as "unsecured debentures, notes or other evidences of indebtedness" which are to be issued in series). For automatic shelf registration statements, the "open-ended" indenture must be filed as an exhibit to the registration statement or as an exhibit to a post-effective amendment to the registration statement that registers the securities to be issued under the indenture.
- The details of the securities to be offered in each series under the indenture (i.e., type of securities--notes, debentures, or other-- interest rates, and maturities) must be disclosed both in a prospectus supplement and in a supplemental indenture at the time the series is to be offered. For an automatic shelf registration statement, the base prospectus must include only a general description of the securities. The supplemental indenture may be filed as an exhibit to a Form 8-K (in the same manner as specified for underwriting agreements), or in an automatically effective, exhibits-only, post-effective amendment filed pursuant to Rule 462(d). For automatic shelf registration statements, the post-effective amendment would be filed pursuant to Rule 462(e).
When a registrant is conducting a continuous offering on Form S-1,the prospectus may have to be revised periodically to reflect new information since, unlike Form S-3, the form does not provide for incorporation by reference of subsequent periodic reports. For example, in a continuous offering on a Form S-1 pursuant to Rule 415(a)(1)(ix), a registrant may wants to update the prospectus to include Exchange Act reports filed after the effective date of the Form S-1. Item 512(a)(1) of Reg S-K requires certain changes, including a Section 10(a)(3) update, to be reflected in a post-effective amendment. Other changes may be made in a prospectus supplement filed pursuant to Rule 424(b). If the registrant files a post-effective amendment, it could incorporate by reference previously filed Exchange Act reports if it satisfied the conditions in Form S-1 allowing incorporation by reference.
Where registered securities are immediately exchangeable into securities of another issuer, the offer and sale of the securities of the other issuer that would be received in the exchange must also be registered, unless an exemption from registration is available. If no exemption from registration is available, the offer and sale of the securities to be issued in exchange could be registered as a continuous offering in reliance on Rule 415(a)(1)(ix) or as an offering of securities upon conversion of outstanding securities pursuant to Rule 415(a)(1)(iv).
The three-year period in Rule 415(a)(5) begins on the initial effective date of the registration statement, except that, for registration statements effective before December 1, 2005, the three-year period began on December 1, 2005 and ended on November 30, 2008. After November 30, 2008, an issuer may use a registration statement that was effective on or before December 1, 2005 to offer and sell securities only to the extent permitted by the grace period provisions of Rule 415(a)(5). For a registration statement that was effective on or before December 1, 2005, the replacement registration statement filed pursuant to Rule 415(a)(6) must have been filed on or before the expiration date of the expiring registration statement, that is, no later than Friday, November 28, 2008.
Rule 415(a)(6) provides that an issuer may include on its replacement registration statement any unsold securities covered by the expiring registration statement by identifying on the facing page of the replacement registration statement, or a pre-effective amendment thereto, the amount of the unsold securities being included on the replacement registration statement and any filing fee paid in connection with the unsold securities, which will continue to be applied to those unsold securities. The issuer should include the file number of the expiring registration statement as part of this disclosure. The issuer is not required to pay any additional fee with respect to the securities included in reliance on Rule 415(a)(6), because the unsold securities (and associated fees) are being moved from the expiring registration statement to the replacement registration statement. A filing fee is required, however, for any new securities registered on the replacement registration statement.
An issuer may only rely on Rule 415(a)(6) to include on a new replacement registration statement the same securities that remain unsold on an expiring registration statement (e.g., a remaining capacity of $1 million of common stock cannot be used to instead include on the replacement registration statement $1 million in preferred stock).
When completing the EDGAR header tags for a replacement registration statement, or any pre-effective amendment thereto, that is not an automatic shelf registration statement, the filer will be required to specify a "Proposed Maximum Aggregate Offering Price." This EDGAR header tag should include only newly-registered securities for which a fee will be payable at the time of filing the replacement registration statement, not the amount of unsold securities that are being included on the replacement registration statement pursuant to Rule 415(a)(6). If the issuer opts not to register any new securities and the replacement registration statement therefore will cover only securities included from the expiring registration statement pursuant to Rule 415(a)(6), the filer should enter "$1" in the "Proposed Maximum Aggregate Offering Price" EDGAR header tag. The filer should enter "$0" as the fee paid. This is necessary because the EDGAR system will not accept a Securities Act registration statement (other than an automatic shelf registration statement using the "pay as you go" fee provisions of Rule 456(b)) unless a "Proposed Maximum Aggregate Offering Price" is specified in the EDGAR header tag. The $1 amount will not result in a fee assessment by the EDGAR system and will allow the acceptance of the replacement registration statement without the filing being blocked.
Rule 415(a)(5) provides that if an issuer has filed a replacement registration statement pursuant to Rule 415(a)(6) that is not an automatic shelf registration statement, the issuer may continue to offer and sell securities covered by the expiring registration statement until the earlier of the effective date of the replacement registration statement or 180 days after the third anniversary of the initial effective date of the expiring registration statement. A continuous offering of securities covered by the expiring registration statement that commenced within three years of the initial effective date may continue until the effective date of the replacement registration statement if such offering is permitted under the replacement registration statement. Any SEC filings, such as prospectus supplements or free-writing prospectuses, related to offerings during the grace period should reflect the expiring registration statement file number. To reflect sales completed during the Rule 415(a)(5) grace period, the issuer should pre-effectively amend the replacement registration statement so that, at effectiveness, the registration statement correctly specifies on the bottom of the facing page the amount of securities that will actually be included in reliance on Rule 415(a)(6).
If an issuer uses Rule 415(a)(6) to include securities on a replacement registration statement, the offering of securities on the expiring registration statement will not be deemed terminated until the replacement registration statement is effective. As a result, any securities that are identified in the replacement registration statement as included pursuant to Rule 415(a)(6) may still be offered and sold from the expiring registration statement during the Rule 415(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 457(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 415(a)(5) grace period off the expiring registration statement or included as unsold securities on the new registration statement in reliance on Rule 415(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 415(a)(6) and, if the conditions of Rule 457(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 415(a)(6), the amount of fees offset pursuant to Rule 457(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).
For example: under Rule 415(a)(6), an issuer files a new registration statement to replace a shelf registration statement that went effective November 1, 2005 and relates to a $2 million continuous offering of debt and $8 million in common stock to be offered on a delayed basis. 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 415(a)(6) and the amount of any new securities to be registered. If the replacement registration statement does not include, at that time, any new securities being registered, the issuer would reflect in the "Proposed Maximum Aggregate Offering Price" EDGAR header tag an amount of $1 and a fee paid of $0.
Prior to the effectiveness of the replacement registration statement, the issuer then sells $1 million of debt and $2 million of common stock, using the expiring registration statement pursuant to Rule 415(a)(5). When the issuer is ready to request effectiveness of the replacement registration statement, it would then file a pre-effective amendment to reflect that the new registration statement is including the unsold securities from the expiring registration statement in the amounts of $1 million of debt and $6 million in common stock pursuant to Rule 415(a)(6). If the issuer does not register new securities in the pre-effective amendment, it will not need to record any "Proposed Maximum Aggregate Offering Price" in the EDGAR header tag.
Alternatively, instead of including the unsold securities from the expiring registration statement, the issuer may elect to use Rule 457(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 that case, if the conditions of Rule 457(p) are satisfied, the issuer may offset fees previously paid in connection with all or a portion of the $1 million of debt and $6 million of common stock that remain unsold on the expiring registration statement against the fees due for any securities newly registered on the pre-effective amendment. The shares covered by the fees used as offsets would be deemed deregistered from the expiring registration statement and could not be offered or sold during the remainder of the Rule 415(a)(5) grace period. The EDGAR header for the pre-effective amendment would reflect as the "Proposed Maximum Aggregate Offering Price" the amount of securities to be included on the replacement registration statement other than those securities included in reliance on Rule 415(a)(6). The issuer would also need to complete the fee offset header tags in EDGAR to reflect the fee offset claimed pursuant to Rule 457(p).
If an issuer is no longer a WKSI at the time it files a replacement registration statement pursuant to Rule 415(a)(5) (three-year time limit), the issuer can continue to use its expiring automatic shelf registration statement for offers and sales during the Rule 415(a)(5) grace period. A registration statement filed solely for purposes of complying with Rule 415(a)(5) will not be considered a reassessment of the issuer’s status as a WKSI for purposes of any outstanding Form S-3ASR or the Securities Act exemptions available to a WKSI.
The issuer’s status as a WKSI and its continued eligibility to use its expiring Form S-3ASR will be re-measured at the time of the filing of a Form 10-K that acts as a Section 10(a)(3) update to the Form S-3ASR registration statement. If the issuer is not a WKSI at the time of the Section 10(a)(3) amendment to its expiring Form S-3ASR, the issuer may no longer use the Form S-3ASR until it post-effectively amends the Form S-3ASR to a form that the issuer is then eligible to use.
A Form S-3ASR that utilizes the "pay-as-you-go" fee provisions of Rule 456(b) may not be converted to another form via a post-effective amendment because fees cannot be paid to register securities via a post-effective amendment on any form other than an automatic shelf registration statement. Consequently, registrants intending to convert a Form S-3ASR, in which payment of fees has been deferred pursuant to Rule 456(b), to another form, such as a Form S-3, should file an automatically effective post-effective amendment to the Form S-3ASR prior to the filing of the Form 10-K to pay a fee for securities it intends to offer and sell upon subsequent conversion to the new form. The filing of an automatically effective post-effective amendment for these purposes does not require a re-measurement of form eligibility as provided in Rule 401(c).
In an offering relying on Rule 415(a)(1)(x) and Rule 430B, the prospectus filed as part of a registration statement covering a "delayed/continuous" medium term note offering generally will contain only a generic description of the security terms. When the medium term note program begins, this base prospectus and a prospectus supplement containing a complete description of the terms of the notes other than price, specific maturity date and other limited terms will be distributed to interested persons. When the notes are priced, a pricing supplement that contains the price, specific maturity date and other limited terms previously omitted from the prospectus supplement is prepared. For each series of notes, there would be one prospectus supplement, but numerous pricing supplements reflecting prices changing frequently in response to market and economic factors. Under this form of medium term note program offering, the prospectus supplement should be filed under Rule 424(b)(2) or, if it also contains other substantive changes, under Rule 424(b)(5). The pricing supplements should be filed under Rule 424(b)(2).
Rule 415(a)(1)(vii) permits a delayed or continuous offering in the case of mortgage-related securities. Although the Securities Act and the rules thereunder do not define mortgage-related securities, there is a definition in Exchange Act Section 3(a)(41). Because the term in Rule 415 was intended to have the same meaning as ultimately decided upon by Congress, a security meeting the definition in Exchange Act Section 3(a)(41) will also be deemed to be a mortgage-related security for purposes of Rule 415. In the case of a traditional mortgage-related securities offering which does not fall within the definition, consideration should be given to whether another subsection of Rule 415(a)(1) is available, for example, Rule 415(a)(1)(ix) or (x). Securities offerings registered in reliance on Rule 415(a)(i)(ix), unlike those registered in reliance on subsections (vii) and (x), are subject to the two-year limitation of Rule 415(a)(2), unless registered on Form S-3 or Form F-3.
An insurance company holding 55% of the common stock of a company as restricted securities desires to register the shares. Any registration statement filed for this purpose would be governed by Rule 415 because the insurance company may not intend to sell the securities immediately. Since the issuer would be deemed a subsidiary of the insurance company, it would be unable to rely upon Rule 415(a)(1)(i). Therefore, another paragraph of Rule 415 (a)(1) would have to be available in order to register the offering on a delayed or continuous basis.
An issuer that is not eligible to register a delayed primary offering on Form S-3 pursuant to Instruction I.B.1. of the form intends to conduct a rights offering for 30 days. Following that time, the shares not subscribed for will be sold in a firm commitment underwriting. The offering may be made in reliance on Rule 415(a)(1)(ix). Item 512(c) of Reg S-K contemplates this result.
In the case of a registration statement pertaining to an offering of convertible debentures and the common stock underlying the debentures, Rule 415 typically is not applicable to the continuous offering of the underlying common stock because that offering is exempt from registration pursuant to Section 3(a)(9). In cases when the Section 3(a)(9) exemption is unavailable (for example, when securities are convertible into securities of another issuer, when conversion terms require that the shareholder pay consideration at the time of conversion, or when conversion arrangements involve the payment of compensation for soliciting the exchange), absent another exemption, Rule 415(a)(1)(iv) is applicable. Rule 415 applies to registered offerings made on a delayed or continuous basis.
A registrant files a Form S-3 shelf registration statement for the delayed sale of debentures. Depending upon the level of interest rates at the time the offering actually takes place, the registrant may seek an opinion of California counsel to the effect that the offering does not violate the California usury laws. Such an opinion may be filed as an exhibit to a Form 8-K, since such forms are automatically incorporated by reference into Form S-3 registration statements.
An issuer with an effective acquisition shelf registration statement may follow the procedures described in Securities Act Release No. 6578 (Apr. 23, 1985) and the Service Corporation International interpretive letter (Oct. 31, 1985) to update the registration statement for use in subsequent acquisitions.
Many medium-term note offerings begin promptly and are made on a continuous basis in reliance on Rule 415(a)(1)(ix). Others, however, are made on a delayed basis in reliance on Rule 415(a)(1)(x) since they do not begin promptly after effectiveness, but are continuous in nature once begun. An issuer eligible to rely on Rule 415(a)(1)(x) may file one registration statement that covers several immediate, continuous or delayed offerings, each a different program for a new series of notes.
A Rule 415 offering provides that purchasers within the first 60 days will receive a security with a higher yield than that to be received by subsequent purchasers. The registrant wished to extend the preferential purchase period for an additional 30 days. Because such an extension is a material change in the plan of distribution, under the Item 512(a)(iii) undertaking, the extension would require a post-effective amendment (or, for registration statements on Form S-3 or F-3, compliance with one of the methods in Item 512(a)(1)(B)).
It is important to identify whether a purported secondary offering is really a primary offering, i.e., the selling shareholders are actually underwriters selling on behalf of an issuer. Underwriter status may involve additional disclosure, including an acknowledgment of the seller’s prospectus delivery requirements. In an offering involving Rule 415 or Form S-3, if the offering is deemed to be on behalf of the issuer, the Rule and Form in some cases will be unavailable (e.g., because of the Form S-3 "public float" test for a primary offering, or because Rule 415(a)(1)(i) is available for secondary offerings, but primary offerings must meet the requirements of one of the other subsections of Rule 415). The question of whether an offering styled as a secondary one is really on behalf of the issuer is a difficult factual one, not merely a question of who receives the proceeds. Consideration should be given to how long the selling shareholders have held the shares, the circumstances under which they received them, their relationship to the issuer, the amount of shares involved, whether the sellers are in the business of underwriting securities, and finally, whether under all the circumstances it appears that the seller is acting as a conduit for the issuer.
For a Form S-11 relating to a "shelf" offering of mortgage-backed bonds to be issued in series, the registrant need not file post-effective amendments and supplemental indentures each time a new series of bonds was to be issued provided that:
- A basic form of supplemental indenture including everything but the collateral for a particular series is filed at the time the registration is declared effective and the basic indenture is qualified; and
- The registrant files a prospectus supplement in supplement form describing the issuance of the series and the collateral therefor.
This position is consistent with Instruction 1 to Item 601(a) of Reg S-K. Because Form S-11 does not permit incorporation by reference to subsequently filed Exchange Act reports (such as a Form 8-K), when a registrant does not satisfy these conditions, supplemental indentures and amended underwriting agreements may be filed only by post-effective amendment and not as exhibits to a Form 8-K.
Securities to be issued in connection with business combinations may be registered for the shelf pursuant to Rule 415(a)(1)(viii). However, not all forms are available for business combinations. In particular, Form S-3 is not available for business combinations of any kind. The "for cash" proviso in General Instruction I.B.1 of Form S-3 is interpreted as prohibiting the use of the form not only for third-party exchange offers but also for any other business combination, however structured. See Securities Act Release No. 6534 (May 9, 1984), at fn. 14. Form S-3 may be used for a secondary offering of shares which were originally received from the issuer in connection with a business combination, assuming it is a genuine secondary offering.
A controlling person who owns a 73% block of shares will sell the block in a registered "at-the-market" equity offering. Rule 415(a)(4) applies only to offerings by or on behalf of the registrant. A secondary offering by a control person that is not deemed to be by or on behalf of the registrant is not restricted by Rule 415(a)(4).
From time to time, a company issues securities under a shelf registration statement through a firm commitment underwriting at a fixed price based on the prior day’s closing price. These firm commitment takedowns would not be considered "at-the-market offerings" because they are at a fixed price. However, sales into an existing trading market of securities of the same class made by broker-dealer firms who buy securities in these takedowns may be deemed indirect primary offerings made "at the market" within the meaning of Rule 415(a)(4), thereby triggering registration and prospectus delivery requirements.
In exchange for "consulting services," a private operating company intended to sell about 13% of its stock to a public company whose sole business was providing consulting services. The consulting services involved preparing a registration statement, applying for listing, obtaining market makers and several other services related to developing a market or raising capital. The public company intended to distribute about half of the 13% of the operating company stock it would receive to its stockholders as a "dividend" through a "spin-off." It also wanted to register the rest of the stock it would receive for resale pursuant to Rule 415(a)(1)(i). The transaction is a primary offering of the operating company through the public company and its shareholders, and the registration statement would need to cover the entire distribution of these shares and the dividend shares, including their further distribution to the public. The registration statement would need to name the public company and its shareholders as underwriters and include appropriate disclosure about them, such as the information described in Item 507 of Reg S-K. In addition, because the operating company was not eligible to do an at-the-market offering on a primary basis pursuant to Rule 415(a)(4), the securities offered and sold pursuant to the registration statement would have to be offered and sold at a fixed price for the duration of the offering.
A company with minimal operations (parent company) and about 750 shareholders intended to create a subsidiary with no significant operations and spin it off to its shareholders, immediately after which the subsidiary would merge with a private operating company that has about 20 shareholders. After the merger, about 95 percent of the equity of the merged entity would be owned by former shareholders of the operating company, about four percent would be owned by the shareholders of the parent company, and about one percent would by owned by some insiders of the parent company who would receive stock in the operating company as a finder’s fee in connection with structuring the transaction. It was contemplated that Securities Act registration statements covering the shares to be issued in the spin-off and the merger would be filed. In addition, after the merger some insiders of the parent company would sell shares of the merged entity that they would receive due to the spin-off and due to the exchange of the finder’s fee shares in the merger. Based on these facts, the transaction is a primary offering of the operating company through the parent company and its shareholders. As such, rather than registering parts of this transaction (i.e., the spin-off and merger), the entire distribution of the operating company shares to the public would need to be registered as a primary offering. The registration statement would have to name the parent company and its shareholders as underwriters, and include appropriate disclosure about them, such as the information described in Item 507 of Reg S-K. In addition, because the operating company was not eligible to do an at-the-market offering on a primary basis pursuant to Rule 415(a)(4), the registration statement would have to include a fixed price for the duration of the offering.
A real estate investment trust utilizes an UPREIT structure whereby the REIT is the general partner of a limited partnership that holds all of the REIT’s properties. Limited partners of the limited partnership may elect to convert their limited partnership units into common shares of the REIT on a one-for-one basis; however, the REIT may elect to pay cash instead of shares upon conversion. The REIT may register the issuance of common shares outstanding underlying limited partnership units pursuant to Rule 415(a)(1)(iv). If the REIT satisfies the registrant eligibility requirements in Instruction I.A of Form S-3, it may register the offering on Form S-3 pursuant to Instruction I.B.4 of the form.
Plans of financing can involve periodic adjustments of interest or dividend rates, rollovers of securities, and plans to buy back and re-market securities, sometimes coupled with "puts" or guarantees (which themselves are securities). Filings involving such plans require an analysis of Section 5 and Rule 415 issues with respect to all securities involved in the offerings. Even after the original offering of the securities has terminated, the registrant may still be engaged in a continuous or delayed offering with respect to the future periodic issuance or modification of securities. These subsequent transactions may involve primary offerings of the issuer’s securities to the extent the issuer pays a remarketing or auction agent or otherwise is involved in subsequent sales such as in the remarketings or auctions.

Rule 416 — Securities to be Issued as a Result of Stock Splits, Stock Dividends and Anti-Dilution Provisions and Interests to be Issued Pursuant to Certain Employee Benefit Plans

When, in a primary offering of immediately convertible debentures, a company is also registering the underlying common shares, the conversion ratio is based on fluctuating market prices and the investors pay no additional consideration to effect the conversion, the company should register an amount of shares based on a reasonable good-faith estimate of the maximum amount of shares it will need to cover conversions. The company does not have to pay an additional fee to register the underlying common shares under Rule 457(i). If the company is required to issue more shares than the estimate due to the operation of the conversion ratio disclosed in the registration statement, the company would have to file an additional registration statement or rely on an available exemption from registration, such as Securities Act Section 3(a)(9). These additional shares would not be covered by Rule 416(a).
The company may not rely on Rule 416 to register for resale an indeterminate number of shares of common stock that it may issue under a conversion formula based on fluctuating market prices. The company must register for resale the maximum number of shares that it thinks it may issue on conversion, based on a good-faith estimate and, if the estimate turns out to be insufficient, the company must file a new registration statement to register the additional shares for resale. If available, Rule 462(b) may be used in this context.
When a registrant splits its stock prior to the completion of the distribution of securities included in a registration statement, and the registration statement does not specifically refer to the existence of anti-dilution provisions for such situations, the registrant must file a post-effective amendment to the registration statement to reflect the change in the amount of securities registered. In this situation, the use of Rule 416(b) is premised upon the filing of a post-effective amendment. Similarly, a pre-effective amendment would have been required to use Rule 416(b) if the split had occurred prior to effectiveness and no mention had been made of anti-dilution provisions in the registration statement. No additional filing fee is required.
A registration statement covering warrants and the underlying common stock was declared effective. The terms of the warrants included an anti-dilution clause, providing for a change in the amount of securities to be issued to prevent dilution resulting from stock splits or stock dividends. Subsequent to effectiveness, the issuer declared a preferred stock dividend on its common stock. Under the terms of the anti-dilution provision, warrant holders, upon exercise, would receive shares of common stock and a corresponding number of shares of preferred stock. Assuming a "sale" of preferred stock to the warrant holders is involved in the exercise of the warrant, the registration statement would not, under Rule 416, be deemed to cover the shares of preferred stock to be issued in connection with the anti-dilution provision, since these shares are of a different class from those registered.
When a registrant has a stock split prior to the completion of a registered distribution that is not covered by anti-dilution provisions, Rule 416(b) provides that the registration statement may be deemed to cover the additional securities if a post-effective amendment is filed to reflect the increase in the amount of securities registered. A company with securities registered on Form S-3 may not increase the number of shares registered by filing a Form 8-K. Instead, a post-effective amendment is required. The post-effective amendment could be limited to the facing page, an explanatory note and the Part II information, unless additional changes are being made to the prospectus.

Rule 419 — Offerings by Blank Check Companies

In a blank check offering, if a consummated acquisition meeting the requirements of Rule 419 has not occurred by a date 18 months after the effective date of the initial registration statement, funds held in the escrow or trust account must be returned to investors pursuant to Rule 419(e)(2)(iv) and escrowed securities must be returned to the registrant. In sum, the transaction must be unwound. For example, when the securities of a blank check company are all gifted to charities and no cash is actually paid, if after the expiration of the 18-month period no acquisition has been consummated, such escrowed shares must be returned to the registrant.
When a blank check company files a registration statement covering the resale of securities by selling shareholders, the issuer is required to comply with Rule 419 if the securities offered under the registration statement are "penny stock." Rule 419 applies to all registered offerings of securities by blank check companies when the securities are "penny stock," as defined in Exchange Act Rule 3a51-1.

Rule 421 — Presentation of Information in Prospectuses

The "plain English" requirements of Rule 421(d) do not apply to forms used under the U.S./Canadian Multijurisdictional Disclosure System ("MJDS"). The provisions of Reg C would apply only if they were specified on the particular MJDS form. Since Rule 421(d) is not specified on the MJDS forms, its "plain English" requirements do not apply.

Rule 424 — Filing of Prospectuses, Number of Copies

Rule 3-01 of Reg S-X specifies certain time periods (depending on the registrant’s accelerated filer status) in which a "filing," other than on Form 10-K or Form 10, may be made without the balance sheet for the most recent fiscal year end. The rule is conditioned on (1) the registrant’s reasonable and good faith expectation that it will report income for the most recently completed fiscal year and (2) the registrant's having reported income for at least one of the last two fiscal years. A registrant may sell securities from an effective Form S-3 registration statement during the relevant time period and file a prospectus supplement under Rule 424 to reflect a take-down, even if the balance sheet for the most recent fiscal year end has not been filed and the registrant does not have a reasonable and good faith expectation that it will report income for the most recently completed fiscal year. Rule 3-01 does not prevent the shelf take-down from occurring and would not apply to the prospectus supplement as it is not for the purpose of updating the prospectus under Section 10(a)(3).
If a registrant wishes to correct a number of non-substantive typographical errors contained in a preliminary prospectus, it does not need to file a revised preliminary prospectus. Rule 424(a) provides that any preliminary prospectus that contains substantive changes from the previously filed prospectus must be filed as part of a formal pre-effective amendment to the registration statement. If the changes are non-substantive, the revised preliminary prospectus is not required to be filed.
A registrant that is not eligible to use Rule 430B(b) plans to file a resale registration statement on behalf of selling security holders related to securities issued to such selling security holders in a transaction that has already been completed. The securities to be offered on the resale registration statement are already issued and outstanding. The registrant sends questionnaires to selling security holders for the purpose of determining the names and amount of securities to be included in the resale registration statement and disclosed in the prospectus. However, a few questionnaires will not be returned until after effectiveness. In this case, the registrant may register the resale of the total amount of securities issued in the initial transaction and offered for resale, but omit from the prospectus at the time of effectiveness the names and specific amounts to be offered by the unknown selling security holders in accordance with Rule 409 as the information is unknown or not reasonably available to the registrant at that time. The prospectus in the registration statement at the time of effectiveness should refer to any unnamed selling security holders in a generic manner by identifying the initial offering transaction in which the securities were sold. A post-effective amendment must be filed in order to add the formerly unnamed selling security holders.
In registration statements for secondary offerings, if the company was eligible to rely on Rule 430B when the registration statement was originally filed, the company may add or substitute selling shareholders on a registration statement related to a specific transaction by prospectus supplement. The supplement is filed under Rule 424(b)(7).
If the company is not eligible to rely on Rule 430B when the registration statement is initially filed, it must file a post-effective amendment to add selling shareholders to a registration statement related to a specific transaction that was completed prior to the filing of the resale registration statement. A Rule 424(b) prospectus supplement may be used to post-effectively update the selling shareholder table to reflect a transfer from a previously identified selling shareholder. The new investor’s shares must have been acquired or received from a selling shareholder previously named in the resale registration statement and the aggregate number of securities or dollar amount registered cannot change. (New interp appears to eliminate requirement for use of a supplement that the transfer be donative or de minimis.)
For EDGAR header purposes, when filing a Rule 424(b) prospectus supplement in connection with an offering that involves an initial effective registration statement and a second registration statement registering additional securities under Rule 462(b), the Rule 424(b) supplement must be filed under the registration number (33- or 333-) for the initial registration statement. The cover page of the Rule 424(b) supplement should, however, set forth the registration numbers of both the initial registration statement and the Rule 462(b) registration statement.
When a supplement to a prospectus is used, the Securities Act prospectus delivery requirements are not satisfied by delivery to broker/dealers of a supplement unattached to the prospectus. The supplement must be attached to the prospectus either physically or electronically so that the prospectus being delivered includes both the supplement and the prospectus. See Securities Act Release No. 6714 (May 27, 1987). The exceptions to this position involve Form S-8 and dividend reinvestment plans filed on Form S-3. In those cases, updating of the existing registration statement, without including the full prospectus, is accomplished through the use of Rule 424 supplements that are distributed to plan participants who have previously received a prospectus, or, in the case of Form S-8, through compliance with Rule 428. Such supplements must include a legend indicating that a full prospectus will be provided upon request.
A change in currency in which securities may be issued is not a fundamental change and may be accomplished by prospectus supplement under Rule 424(c).
A reduction of the commission paid to the underwriter or selling agent may be accomplished by prospectus supplement when the price of the securities is not changed.

Rule 428 — Documents Constituting a Section 10(a) Prospectus for Form S-8 Registration Statement; Requirements Relating to Offerings of Securities Registered on Form S-8

Documents constituting the current Form S-8 prospectus, as updated for Section 10(a)(3) purposes, should be delivered concurrently to new plan participants. For example, if the information to be provided pursuant to Items 1 and 2 of the Form S-8 is contained in more than one document, those documents should be delivered concurrently to new plan participants.
The Rule 428(b)(5) obligation to deliver company proxy statements and reports to employees participating in a stock option plan or plan fund that invests in the company’s securities extends to former employees, within the scope of General Instruction A.1(a)(3) to Form S-8, who participate in a stock option plan or plan fund that invests in the company’s securities.
Rule 428(b)(2) requires the registrant to deliver, along with the documents containing the information required by Part I of Form S-8, one of the following: the latest Rule 14a-3(b) annual report, the latest Form 10-K, the latest Rule 424(b) prospectus or an effective Form 10. An issuer relying on the Rule 428(b) Form 10-K delivery alternative that changed its fiscal year and filed a six-month transition report on Form 10-K subsequent to its latest annual report on Form 10-K must deliver both the latest annual report on Form 10-K and the transition report on Form 10-K in order to satisfy the Rule 428(b) requirement.

Rule 429 — Prospectus Relating to Several Registration Statements

The combined prospectus technique of Rule 429 may be used in the context of Rule 415, when an amount of securities remains unsold on an earlier shelf registration statement at the time the issuer files a new shelf registration statement, provided that the new shelf registration statement is not an automatic shelf registration statement and complies with Rules 415(a)(5) and (6). Once Rule 429 is used to create a combined prospectus, the prospectus that is a part of the earlier registration statement generally may not be used by itself.
A WKSI may not rely on Rule 429 to combine a prospectus from a prior non-automatic shelf registration statement with the prospectus in a newly filed automatic shelf registration statement. Under Rule 429(b), a registration statement containing a combined prospectus acts, upon effectiveness, as a post-effective amendment to the earlier registration statement whose prospectus is combined in the latest registration statement. Because a registrant cannot file a post-effective amendment to convert a non-automatic shelf into an automatic shelf, a WKSI may not rely on Rule 429 to combine a prospectus from a prior non-automatic shelf with the prospectus in a newly filed automatic shelf. Instead, a WKSI with unused capacity on a prior non-automatic shelf may either utilize the unused fees upon filing a new automatic shelf, in accordance with Rule 457(p), or continue to sell off of the old registration statement until the capacity is used up.
Rule 429 is available to foreign governments or subdivisions filing registration statements on Schedule B. Schedule B registrants may use Rule 429 to the same extent as other registrants under the Securities Act.
Where a registration statement on Form S-4 registered insufficient shares to cover shares issuable upon the exercise of options during the period after the effective date of the registration statement but prior to the consummation of the merger, Rule 413(a) does not permit the registration of additional shares by post-effective amendment. The registrant could (1) rely on Rule 462(b) to prepare and file a short-form registration statement provided the amount to be registered was within the 20% limit and the other conditions were met, or (2) file a new registration statement that could be combined with the earlier registration statement pursuant to Rule 429.

Rule 430A — Prospectus in a Registration Statement at the Time of Effectiveness

For purposes of the Rule 430A(a)(3) 15-business-day filing requirement, Saturdays, Sundays and federal holidays are not counted as business days.
A registrant may not omit the principal amount of securities to be offered from its registration statement in reliance on Rule 430A. The principal amount of securities to be offered (i.e., volume) is not price-related information or a term of the security dependent upon the offering date and, therefore, that amount cannot be omitted from the registration statement in reliance on Rule 430A(a).
When a registrant omits pricing information from the prospectus in a registration statement at the time of effectiveness in reliance on Rule 430A, under the second sentence of the Instruction to Rule 430A, a Rule 424(b) prospectus supplement may be used, rather than a post-effective amendment, when the 20% threshold is not exceeded, regardless of the materiality or non-materiality of resulting changes to the registration statement disclosure that would be contained in the Rule 424(b) prospectus supplement. A registrant is required to reflect pricing information or the inclusion of additional securities in a post-effective amendment when there is a change in offering size or deviation from the price range beyond the 20% threshold noted in the second sentence of the Instruction, but only if the change or deviation materially changes the previous disclosure. Regardless of the size of the increase, in the case of a registration statement that is not an automatic shelf registration statement, a new registration statement must be filed to register any additional securities that are offered. Additional securities cannot be registered by post-effective amendment except on automatic shelf registration statements.
It is not appropriate to file a post-effective amendment under Rule 462(c) if the information contained in the amendment reflects changes in price and volume that represent more than a 20% change in the maximum aggregate offering price set forth in the effective registration statement. Rule 462(c) provides a mechanism for issuers to file a post-effective amendment that becomes automatically effective. It allows issuers the flexibility of automatic effectiveness when the sole purpose of the post-effective amendment is to restart the 15-business-day period in which pricing must occur under Rule 430A(a)(3). Rule 462(c) may not be used if the post-effective amendment contains any substantive change from, or addition to, the prospectus in the effective registration statement, other than price-related information omitted from the registration statement in reliance on Rule 430A.
The instruction to paragraph (a) of Rule 430A provides that changes in volume and price representing no more than a 20% change in the maximum offering price set forth in the registration statement fee table may be made pursuant to a Rule 424(b)(1) prospectus supplement. The 20% threshold may be calculated using the high end of the range in the prospectus at the time of effectiveness and may be measured from either the high end (in the case of an increase in the offering price) or low end (in the case of a decrease in the offering price) of that range.
A registration statement went effective listing $800 million of debt generically in its fee table and containing a prospectus specifying three classes of debt. The prospectus states that $300 million would be offered of each of the first two classes of debt and $200 million of the third class would be offered. The registrant wishes to change the allocation of the $800 million among the 3 classes after the effective date. The instruction to paragraph (a) of Rule 430A would allow the registrant, without filing a post-effective amendment, to increase a class or classes of debt by up to $160 million (20% of $800 million) with a corresponding reduction of the other class or classes by $160 million. The decrease and increase are not each counted as a 20% change (and thereby equating to a 40% change) since they are made in parallel as one reallocation.

Rule 430B — Prospectus in a Registration Statement After Effective Date

An issuer that has a plan of distribution that does not include "at-the-market" offerings can amend that plan of distribution by prospectus supplement and then conduct at-the-market offerings in compliance with the provisions of Rule 415(a)(4), so long as the issuer is eligible to engage in at-the-market offerings under the provisions of Rule 415(a)(4).
For shelf registration of preferred stock to be issued in series, a prospectus supplement may be filed under Rule 424 to set forth more specifically the terms of the preferred stock not inconsistent with the more general terms contained in the core prospectus.. In addition, if the registration statement is on Form S-3, the instrument defining the specific terms of the preferred stock may be filed as an exhibit to a Form 8-K.
An issuer that was eligible to conduct a primary offering of securities pursuant to General Instruction I.B.1 of Form S-3 planned to file an unallocated shelf registration statement and conduct an immediate takedown following effectiveness. The issuer would include a base prospectus in the Form S-3 and asked whether a prospectus supplement for the immediate takedown would also need to be filed as part of the registration statement prior to effectiveness. With regard to the immediate takedown, the issuer was not required to include a prospectus supplement pre-effectively to disclose the information about the immediate takedown that would be known at the time of effectiveness because Rule 415(a)(1)(x) permits immediate takedowns, the prospectus supplement for the takedown would become part of the registration statement and the filing would cause a new effective date of the registration statement.

Rule 430C — Prospectus in a Registration Statement Pertaining to an Offering Other Than Pursuant to Rule 430A or Rule 430B After the Effective Date

A registration statement for an offering that is subject to Rule 430C must include the undertaking in Item 512(a)(5)(ii) of Reg S-K even if the offering is not registered pursuant to Rule 415. Although the Item 512(a) undertakings relate to Rule 415 offerings, the undertaking in Item 512(a)(5)(ii) is required for all registration statements subject to Rule 430C by Rule 430C(d).

Rule 433 — Conditions to Permissible Post-Filing Free Writing Prospectuses

If an offering participant, other than the issuer, unintentionally distributes a free writing prospectus in a broad, unrestricted manner, that offering participant must file the free writing prospectus. Rule 433(d)(1)(ii) requires an offering participant, other than the issuer, to file any free writing prospectus that is used or referred to by that offering participant and distributed by or on behalf of that offering participant in a manner reasonably designed to lead to its broad unrestricted dissemination. This filing requirement applies whether or not the distribution is intentional.
If an issuer uses a free writing prospectus at a time when EDGAR does not accept filings, to be in compliance with Rule 433, the issuer should file the free writing prospectus on EDGAR within the time frame provided in the rule, even if the filing is not "accepted" by EDGAR until a later time. For example, if an issuer first uses a free writing prospectus at 10:00 p.m. on a Monday night, the issuer is required to file the free writing prospectus no later than that Monday, as Rule 433(d)(1) requires the filing to be made "no later than the date of first use." The issuer in this example would, therefore, be required to file the free writing prospectus on EDGAR no later than that Monday, even if the EDGAR system is closed for accepting filings for that day.
An issuer free writing prospectus that contains both descriptions of certain terms of the securities and other information can be considered separately when determining the filing requirements. With regard to the "other information," the issuer must file the issuer free writing prospectus, other than the description of certain terms of the securities, no later than the date of first use. With regard to the terms of the securities, the issuer must file the description of the terms of the securities only if that description represents the final terms of the securities. If the description represents the final terms of the securities, the issuer must file that description of the final terms within two days after the later of:
- the date of first use of that description; and
- the date the final terms have been established for all classes of securities in the offering.
After the filing of the registration statement for an offering, if the issuer’s CEO participates in a live interview with unaffiliated and uncompensated media that is broadcast on radio or television, that interview would be an issuer free writing prospectus that the issuer must file if the interview constitutes an offer. In that case, the CEO’s interview on a live television or radio program conducted by unaffiliated and uncompensated media would be a written offer and would be treated the same as any other unaffiliated, uncompensated media publication or broadcast. The issuer would have to satisfy its filing obligation with regard to the interview within four business days after the broadcast.
In contrast, after the filing of the registration statement for an offering, if the issuer’s CEO participates in an interview with unaffiliated and uncompensated media that is published and the substance of the information in the interview is contained in the registration statement, the issuer would not have to file the interview as an issuer free writing prospectus, even if the interview constitutes an offer. If the CEO interview is an offer, it will be an issuer free writing prospectus, but it does not have to be filed as a free writing prospectus. Rule 433(f)(2) contains an exception from the filing conditions for unaffiliated and uncompensated media publications and broadcasts if the substance of the free writing prospectus has been filed previously with the SEC. Of course, the issuer will be responsible for determining whether the substance of the information has been filed previously.
After the filing of the registration statement for an IPO, but before that registration statement becomes effective, the issuer’s CEO cannot participate in a broadcast that is a paid "infomercial" under Rule 164 and Rule 433. While there is an exclusion in Rule 433(f) from the requirement that the statutory prospectus must precede or accompany a media broadcast in an IPO, that exclusion is available only if no payment is made or consideration given by or on behalf of the issuer or other offering participant for the written communication or its dissemination, and the other conditions to the exclusion are satisfied. Because the "no payment" condition is not satisfied for paid infomercials, the requirement that the statutory prospectus precede or accompany the communication applies and cannot be satisfied for a broadcast. Therefore, Rule 164 and Rule 433 would not be available for that communication.
For an issuer free writing prospectus, the free writing prospectus must be filed even if the information in it is also contained in the prospectus in the filed registration statement, unless the Rule 433(f)(2) exclusion for media publications or broadcasts applies. Further, the Rule 433(d)(4) exception from the condition for an issuer to file issuer information would not be available in this situation, as that exception applies only to free writing prospectuses of offering participants other than the issuer when the information is contained in a previously filed prospectus or free writing prospectus relating to the offering.
For an issuer free writing prospectus, under an exception provided by Rule 433(d)(3), the issuer need not file the free writing prospectus if the free writing prospectus does not contain substantive changes from or additions to a previously filed free writing prospectus that relates to the offering.
If an issuer and underwriter agree that the underwriter will not use a free writing prospectus without the consent of the issuer, the issuer’s consent to that underwriter’s use of a free writing prospectus is not, in and of itself, authorization or approval of the communication for purposes of determining whether it is an issuer free writing prospectus as defined in Rule 433(h)(1). In this regard, "authorize[d]" or "approve[d]" as used in Rule 433(h)(3) refers to the substance, not the use, of the free writing prospectus. If the issuer’s actions amount to adoption of or entanglement with the free writing prospectus, then the issuer would have approved or authorized the underwriter free writing prospectus.
During a company’s IPO, an underwriter sends a free writing prospectus to its clients. A member of the media then receives the free writing prospectus from a client of that firm, but not from the underwriter, and writes an article containing information derived from information in the underwriter’s free writing prospectus. The media provisions of the free writing prospectus rules apply to articles based on information provided by or on behalf of the issuer or other offering participants to the media. If a free writing prospectus (or the information contained in it) is not provided to the media by an issuer or other offering participant or any person acting on behalf of either of them, a media publication based on that free writing prospectus (or information) would not be a free writing prospectus of the issuer or other offering participant. The staff may request information about the role, if any, that the underwriter or issuer played with regard to the provision of the free writing prospectus (or information contained in it) or the publication, at least in certain circumstances when it is not clear. If the issuer or underwriter, or a person acting on their behalf, provided, authorized, or approved the publication, the free writing prospectus rules might apply to the publication.
In an IPO, an issuer cannot post a transcript of an electronic road show on its web site as a "bona fide electronic road show" instead of providing an electronic presentation constituting a "bona fide electronic road show." A bona fide electronic road show is defined in Rule 433(h) as "a road show that is a written communication transmitted by graphic means that contains a presentation by one or more officers of an issuer or other persons in an issuer’s management … and, if more than one road show that is a written communication is being used, includes discussion of the same general areas of information regarding the issuer, such management, and the securities being offered as such other issuer road show or shows for the same offering that are written communications." A transcript of a road show is not a "presentation" within the meaning of the rule and would not be considered a "bona fide electronic road show." Such a transcript would be an issuer free writing prospectus that would have to be filed with the SEC pursuant to Rule 433.
If an issuer intends to distribute a subscription agreement to a limited number of institutional investors in a registered directed offering conducted through a placement agent, and the subscription agreement will not be widely disseminated, the issuer may have to file the subscription agreement as a free writing prospectus. A subscription agreement that contains provisions in addition to the final terms [Note: this reference may actually be intended to be "preliminary" terms] of the securities would not qualify for the exclusion from filing in Rule 433(d)(5)(i). If the subscription agreement is not filed as an annex or appendix to the registration statement, it will be subject to Rule 433 and must be filed as an issuer free writing prospectus. The method of dissemination of the subscription agreement is not relevant in analyzing the filing conditions of an issuer free writing prospectus. The issuer could include the subscription agreement in the Form S-3 as an annex or appendix to that Form by filing it under cover of Form 8-K. [Note: the staff has advised separately that the (d)(5)(i) exclusion is really intended for term sheets and not much more. Although the decision requires a facts-and-circumstances determination, the staff has indicated that it would be difficult to conclude that a subscription agreement (whether it has final, preliminary or blank terms regarding pricing, and whether it has material additional terms or merely mechanical additional terms) distributed to potential investors in connection with conducting an offering was not a free writing prospectus that would need to be filed prior to first use. Thanks to Peter Werner for passing along this conversation.]
Rule 433(d)(4) does not provide an exception from the filing requirements of Rule 433(d)(1)(i)(C). Accordingly, if a free writing prospectus is used by the issuer or any offering participant that includes the final terms of the securities or of the offering, the issuer must file a description of the final terms regardless of whether the issuer has previously filed a final prospectus supplement that includes the final terms of the securities under Rule 424.
An underwriter distributed a free writing prospectus through a widely used subscription news and financial data service, and the free writing prospectus was available to all subscribers of the service. In this case, the free writing prospectus was "distributed . . . in a manner reasonably designed to lead to its broad unrestricted dissemination" for purposes of Rule 433(d)(1) notwithstanding the fact that the news and financial data service was a subscription service.

Rule 436 — Consents Required in Special Cases

Inclusion of a fairness opinion (or a summary of the opinion) from an investment banker in a registration statement for a business combination or reorganization would require that a consent be filed as an exhibit under Section 7 and Rule 436.
A registrant has engaged a third-party expert to assist in determining the fair values of certain assets or liabilities disclosed in the registrant’s Securities Act registration statement. The registrant is not required to make reference to a third-party expert simply because the registrant used or relied on the expert’s report or valuation or opinion in connection with the preparation of a Securities Act registration statement. The consent requirement in Securities Act Section 7(a) applies only when a report, valuation or opinion of an expert is included or summarized in the registration statement and attributed to the third party. In that event, the disclosure becomes "expertized" for purposes of Section 11(a), with the result that the expert has exposure to Section 11 liability and the due diligence defense burden of proof for other Section 11 defendants is reduced with respect to that disclosure, as provided in Securities Act Section 11(b).
If the registrant determines to make reference to a third-party expert, the disclosure should make clear whether any related statement included or incorporated in a registration statement is a statement of the third-party expert or a statement of the registrant. If the disclosure attributes a statement to the expert, the registrant must comply with the requirements of Rule 436 with respect to that statement. For example, if a registrant discloses purchase price allocation figures in the notes to its financial statements and discloses that these figures were taken from or prepared based on the report of a third-party expert, or provides similar disclosure that attributes the purchase price allocation figures to the expert and not the registrant, then the registrant should comply with Rule 436 with respect to the purchase price allocation figures. On the other hand, if the disclosure states that management or the board prepared the purchase price allocations and, in doing so, considered or relied in part upon a report of a third-party expert, or provides similar disclosure that attributes the purchase price allocation figures to the registrant and not the expert, then there would be no requirement to comply with Rule 436 with respect to the purchase price allocation figures.
Independent of Section 7(a) considerations, a registrant that uses or relies on a third-party expert report, valuation or opinion should consider whether the inclusion or summary of that report, valuation or opinion is required in the registration statement to comply with specific disclosure requirements, such as Item 1015 of Reg M-A, Item 601(b) of Reg S-K or the general disclosure requirement of Rule 408.
When the consent of counsel or of an expert (other than an accountant) has been included as an exhibit to a prior filing, an updated consent is generally not required absent a change in the portion of the filing expertized by that person, and assuming the filed consent is not limited to that particular amendment.
A Form S-8 incorporated a Form 10-K that contained its 2007 financial statements certified by one accounting firm and its 2005 and 2006 financial statements certified by a different accounting firm. Rule 436 would require the filing of the consents of both accounting firms for purposes of the Form S-8 registration statement.

Rule 438 — Consents of Persons About to Become Directors

The registrant has two directors who will sign the registration statement. The registration statement will indicate the names of four more persons who will become directors before the registration statement becomes effective. Those persons will sign any amendments to the registration statement, but not the original filing. Rule 438 consents should be obtained from the prospective directors in connection with the original filing.

Rule 456 — Date of Filing; Timing of Fee Payment

If a WKSI files a prospectus supplement to pay a filing fee on its automatic shelf registration statement in advance of an offering or sale, the issuer does not need to include the calculation of registration fee table in a prospectus supplement provided to an investor. A WKSI may file a prospectus supplement pursuant to Rule 424(b) solely for the purpose of paying a filing fee and then file another prospectus supplement that is provided to investors. The prospectus supplement used to pay a filing fee (and which includes the calculation of registration fee table) does not have to be the same prospectus supplement used to reflect the takedown of securities from an automatic shelf registration statement.
After filing a Form S-3ASR that relied on the pay-as-you-go provisions in Rule 456(b), an issuer filed a Rule 424 prospectus supplement to reflect a completed takedown. The fee table included in the prospectus supplement failed to include a number of shares (or aggregate offering amount) that were later sold pursuant to the underwriter’s over-allotment option, and the issuer did not pay a fee for those shares within the cure period permitted by Rule 456(b)(1)(i). Although failing to identify the over-allotment shares in the fee table and pay the fee constituted a Section 6 violation, Rule 456(b)(2) provides that such failures do not cause the registrant to violate Section 5 because the registrant relied on the pay-as-you-go provisions and the class of securities sold pursuant to the over-allotment option was identified in the Form S-3ASR at the time it was filed. The issuer was advised that it should address its Section 6 violation by filing an additional prospectus supplement under either Rule 424(b)(2) or (b)(5) and under Rule 424(b)(8) with a fee table reflecting the over-allotment shares and paying the associated filing fee at that time.
WKSIs that rely on Rule 456(b) to defer payment of filing fees are required to pay the fees "within the time required to file the prospectus supplement pursuant to Rule 424(b) . . . for the offering." When an issuer plans to use both a preliminary and a final prospectus, the required fee must be paid within the time required to file the final prospectus supplement, as the issuer may not know the actual amount offered at the time the preliminary prospectus is filed.

Rule 457 — Computation of Fee [see also the interps under Rule 462]

When registering pursuant to Rule 457(a), the company registers the number of securities offered, not the dollar amount. Therefore, after the initial filing of the registration statement, no additional fee need be paid if the per share price rises. If the per share price falls, however, the company cannot increase the number of shares it offers without registration of additional shares and payment of an additional registration fee. Under Rule 457(o), a company registers the dollar amount of securities being offered. Consequently, if the per share price increases so that the maximum aggregate offering price would be greater than the maximum aggregate offering amount listed in the calculation of registration fee table, the company would be required to register an additional dollar amount and pay an additional registration fee, or reduce the number of shares it offers. If the per share price decreases, additional shares could be offered without further registration so long as the amount of shares offered times the per share price does not exceed the maximum aggregate offering amount listed in the calculation of registration fee table.
To calculate the filing fee under Section 6(b) for debt securities sold with original issue discount, the registrant should use the amount to be paid by purchasers in the public offering to determine the fee, not the principal amount. The public offering price for a security is always the basis for calculating the filing fee under Section 6(b). As a result, the principal amount for debt securities sold with original issue discount will not be the amount on which the fee is calculated.
To calculate the filing fee for a registered spin-off, the registrant should look to Rule 457(f) for guidance. Although the rule does not specifically mention spin-offs, it does contain provisions, such as Rule 457(f)(1) and (2), that may be helpful in determining the proper fee. Consistent with Rule 457(f)(1), the filing fee is based on the market value of the securities to be spun off. When there has been no market for the shares being spun off, consistent with Rule 457(f)(2), the filing fee may be based on the book value of the assets of the spun-off subsidiary.
In a Form S-4 registration statement registering both the securities offered in a business combination transaction and the resale of those securities by affiliates, under Rule 457(f)(5), if a filing fee is paid with respect to the securities offered in the business combination transaction, no separate filing fee is assessed for the registration of resale transactions.
When an issuer is registering units composed of common stock, common stock purchase warrants and the common stock underlying the warrants, the registration fee is based on the offer price of the units and the exercise price of the warrants.
When an issuer is simultaneously registering warrants and the common stock underlying the warrants, the fee payable is based on the offer price plus the exercise price of the warrants. This calculation is analogous to Rule 457(i) which provides that the registration fee for the simultaneous registration of a convertible security and the underlying security is the proposed offering price of the convertible security plus any additional conversion consideration. The entire fee is allocated to the common stock, and no separate fee is recorded for the warrants.
A company’s 401(k) plan provides for an automatic company contribution of 1% of the employee’s salary, employee contributions up to 10% of the employee’s salary and a matching contribution by the company of the employee contributions up to 5% of the employee’s salary. The investment options for the plan require that the plan be registered. The fee would be paid with respect to the employee contributions and the matching contributions; however, the company would not have to pay a fee for the automatic contribution since it is made without regard to employee contributions.
Rule 457(h) states that if the exercise price of the options is not known in the case of an employee stock option plan, the fee should be based upon the price of the securities of the "same class." Securities Act Release No. 6867 (June 6, 1990) clarifies that "same class" refers to those securities underlying the options that are being registered.
If a registrant adds by post-effective amendment a resale prospectus with respect to control securities that were previously registered on Form S-8, pursuant to Rule 457(h)(3), no additional fee need be paid for resales when a fee has been paid in connection with the registration of the securities for sale to the employees.
After selling securities off of a registration statement, an issuer filed a post-effective amendment to deregister the remaining unsold securities. Once the post-effective amendment has become effective, the issuer may not transfer the fee associated with those unsold securities to a registration statement that it plans to file in the future. As stated in Securities Act Release No. 7943 (Jan. 26, 2001), at footnote 68, fee transfers are not available from unsold shares that were deregistered before the new registration statement is filed. When a post-effective amendment to deregister becomes effective, filing fee transfer from the deregistered securities becomes unavailable.
An issuer has more shares registered on the Form S-8 than it will need to cover the exercise of the outstanding options. The issuer may not transfer to a new registration statement the filing fees associated with the securities that the issuer will not need to issue, but continue to use the Form S-8 to cover the exercise of the outstanding options. Because Rule 457(p) permits filing fees to be transferred only after the registered offering has been completed or terminated or the registration statement has been withdrawn, the issuer may not transfer the fees associated with the securities that it believes it will not need to issue until the issuer completes or terminates the offering registered on Form S-8.
A WKSI cannot change an effective Form S-3 or Form F-3 registration statement to an automatic shelf registration statement by filing a post-effective amendment. Instead, the issuer must file a new registration statement on Form S-3 or Form F-3 designated as an automatic shelf registration statement. When permitted by Rule 415(a)(6), the issuer may include on the new registration statement any unsold securities covered by the effective Form S-3 or Form F-3. Alternatively, the issuer may rely on Rule 457(p) to carry forward unused filing fees for unsold securities from the effective registration statement if the automatic shelf is filed within five years of the initial filing date of the effective registration statement. This approach is necessary because automatic shelf registration statements filed on Form S-3 or Form F-3 and post-effective amendments to automatic shelf registration statements are designated separately from other registration statements on Form S-3 or Form F-3 to enable them to become effective immediately.
A continuous offering registered on an effective Form S-3 (such as a dividend reinvestment program, including a program with a direct stock purchase plan) can be transitioned to an automatic shelf registration statement. When an issuer files an automatic shelf registration statement, it can register any primary offerings for cash, including continuous offerings that were previously registered on a shelf registration statement. This would include, without limitation, unallocated shelf offerings, dividend reinvestment programs with direct stock purchase plans, and offerings of securities by selling security holders. The issuer cannot include business combination transactions, such as acquisition shelf registration statements, on the automatic shelf registration statement.
When an issuer includes an ongoing offering that was registered on an effective shelf registration on a subsequently filed automatic shelf registration statement, it may include on the new registration statement any unsold securities covered by the effective registration statement in the manner provided in Rule 415(a)(6). Alternatively, it may carry forward the filing fees paid for any unsold securities under Rule 457(p) if the automatic shelf registration statement is filed within five years of the initial filing date of the effective registration statement.
For an automatic shelf registration statement, the calculation of registration fee table should list each type of security being registered and either state whether a filing fee is being paid with the filing (in which case the dollar amount of the fee should be set forth, as in the case of an unallocated shelf registration statement today), or indicate "$0" in the filing fee table and state that the filing fee will be paid subsequently in advance or on a pay-as-you-go basis.
When a registrant has filed a registration statement for two separate securities and then wishes to increase the amount of one security and decrease the other, the registrant can file a pre-effective amendment to reflect the increase and decrease in the calculation of registration fee table and reallocate the fees already paid under the registration statement between the two securities.
A registrant using Rule 457(a) can increase the number of shares covered by a registration statement by adding them in the pricing amendment prior to effectiveness. The registration fee for the additional shares should be based on the actual offering price, rather than the estimated offering price used for the initial filing.
A registration statement for 1,000,000 shares of preferred stock went effective with an estimated offering price of $15 per share, with the fee calculated and paid in reliance on Rule 457(a). After the effective date, but prior to the commencement of sales, the registrant sought to increase the number of shares to 1,150,000 and increase the offering price to $17.50 per share. Because more shares are going to be sold than were registered, the registrant must file a new registration statement to register the additional 150,000 shares at $17.50 per share. A short-form registration statement under Rule 462(b) would be possible since the number of additional shares (150,000) times the new price ($17.50) is less than 20% of the aggregate dollar amount in the calculation of registration fee table in the original effective registration statement ($15,000,000). However. no confirmations may be sent prior to the filing of the Rule 462(b) registration statement.
A registration statement registered $15,000,000 of preferred stock under Rule 457(o). The prospectus indicated that 1,000,000 shares were being offered. After the effective date, but prior to the commencement of sales, the registrant sought to increase the price from the intended $15 maximum to $17.50, without changing the number of shares in the offering. Because the stock was registered by dollar amount (Rule 457(o)), not by number of shares (Rule 457(a)), and because the dollar amount was increasing, the registrant must file a new registration statement to register the additional $2,500,000 of preferred stock. A short-form registration statement under Rule 462(b) would be possible since the $2,500,000 is less than 20% of the aggregate dollar amount registered in the calculation of registration fee table in the original effective registration statement ($15,000,000). However, no confirmations may be sent prior to the filing of the Rule 462(b) registration statement.
A registration statement registered $15,000,000 of preferred stock under Rule 457(o). The prospectus indicated that 1,000,000 shares were being offered. After the effective date, but prior to the commencement of sales, the registrant sought to increase the number of shares in the offering to 1,300,000 and decrease the price from the intended $15 to $11.50. Because the new aggregate offering amount (1,300,000 x $11.50) does not exceed the $15,000,000 registered, no new registration statement need be filed.
A company planned to issue registered securities in connection with the purchase of the target company’s assets. The target would not be liquidated after completion of the transaction. In calculating the filing fee, the acquiring company should base the fee on the market value of the assets to be received under Rule 457(d).
Although Rule 457(f) provides that the filing fee for an acquisition registration statement is determined on the basis of the value of the shares of the acquired company, for an acquisition shelf, the filing fee should be based on the market value of the registrant’s shares as provided in Rule 457(c), since the targets are not yet known.
A company that had only public debt outstanding, no market for its common stock and a negative book value was registering shares issuable upon exercise of stock options none of which had yet been granted at the time of filing (so there was no option exercise price). The company should calculate the filing fee, for purposes of Rule 457(h), based on a good faith estimate of the value of the securities underlying the options.
A letter of credit guarantee backing municipal bonds was issued by a corporation rather than a bank and therefore had to be registered even though the underlying securities were exempt. If the filing fee were based on the amount of municipal securities covered by the guarantee the fee would be overstated. The entire amount of the offering need not be allocated to the guarantee and the filing fee may be based on the amount charged by the corporation for issuing the letter of credit by analogy to Rule 457(k) and (l).
An issuer proposed to register redeemable notes 90% of which were expected to redeemed within 30 days of issuance. Because most of the securities being registered would be outstanding for only a brief period of time, the issuer sought relief from the filing fee requirements by analogy to Rule 457(m), which provides relief in certain circumstances when exempt commercial paper is being registered along with non-exempt commercial paper. Since the notes in question were not commercial paper, the full filing fee was payable.
A company filed a registration statement on October 1, 2003, paying a $50,000 filing fee. Only half of the securities so registered were sold. On March 1, 2008, the company filed a different registration statement for which it owed a filing fee of $15,000. The company was able to offset this fee by transferring $25,000 of the earlier $50,000 filing fee. The $25,000 represented the entire filing fee paid on all unsold shares from the October 1, 2003 registration statement. For purposes of future transfers under Rule 457(p), the $25,000 so transferred was considered paid on March 1, 2008. Assuming the other conditions of Rule 457(p) were satisfied, the $10,000 that was transferred in excess of the fee due for the second registration statement, as well as any portion of the $15,000 fee that remained unused after completion or termination of the offering would be available for transfer to another registration statement initially filed before March 1, 2013.
An asset-backed issuer may offset fees, under the fee offset provisions of Rule 457(p), paid by another registrant/depositor if both registrant/depositors were "brother-sister" entities, that is, wholly owned subsidiaries of the same parent company.

Rule 461 — Acceleration of Effective Date

It is not necessary for the managing underwriters to join in the written request for acceleration under Rule 461 in connection with a shelf registration statement, even if they are named as potential underwriters. Very similarly, the underwriter need not join in the registrant’s request for acceleration when the registration statement is a delayed-offering shelf filing.
Written notification that the issuer and the underwriter will be making oral acceleration requests may be made by counsel for the issuer or the underwriter in its cover letter accompanying the registration statement or an amendment thereto. Oral acceleration requests should not simply be left on voicemail of a Corp Fin staff member.

Rule 462 — Immediate Effectiveness of Certain Registration Statements and Post-Effective Amendments [see also the interps under Rule 457]

In order to rely on the automatic effectiveness provisions of Rules 462 and 464 that apply to a Form S-3 or Form F-3 for a dividend reinvestment plan, the plan must satisfy the Rule 405 definition of "dividend or interest reinvestment plan." In particular, any plan that allows any person (including an employee) to make an initial purchase of the securities through the plan would not be a dividend or reinvestment plan under Rule 405.
Other than Rule 430A price-related information, an abbreviated registration statement filed pursuant to Rule 462(b) may not contain any information other than the cover page, the page incorporating the earlier registration statement by reference, the required signatures and any additional opinions and consents required as exhibits. Rule 462(b) registration statements are not available as a mechanism to make any material changes required to be made to the original effective registration statement.
For a delayed primary shelf registration statement, the available dollar amount permitted to be registered under Rule 462(b) is based upon the amount remaining on the shelf immediately prior to the final takedown from the shelf that depletes all shelf-registered securities. Thus, Rule 462(b) can only be used once per delayed shelf registration statement and only at the time of the final takedown. Similar treatment is afforded to registration statements that are used solely for the purpose of continuous offerings in connection with dividend reinvestment plans.
Except for continuous offerings in connection with dividend reinvestment plans, Rule 462(b) may be used for a continuous primary offering or a delayed or continuous secondary offering pursuant to Rule 415 only to increase the number of shares registered prior to sending the confirmation for the first sale of securities in the offering.
It is not appropriate to file a post-effective amendment under Rule 462(c) if the information contained in the amendment reflects changes in price and volume that represent more than a 20% change in the maximum aggregate offering price set forth in the effective registration statement. Rule 462(c) provides a mechanism for issuers to file a post-effective amendment that becomes automatically effective. It allows issuers the flexibility of automatic effectiveness when the sole purpose of the post-effective amendment is to restart the 15-business-day period in which pricing must occur under Rule 430A(a)(3). Rule 462(c) may not be used if the post-effective amendment contains any substantive change from, or addition to, the prospectus in the effective registration statement, other than price-related information omitted from the registration statement in reliance on Rule 430A.
Rule 462(b) is available for registration of additional securities if the conditions of the rule are satisfied, even if the financial statements in the original effective registration statement for the offering, which were within the age limitations of Rule 3-12 of Regulation S-X as of the effective date, are no longer within the age limitations set by Rule 3-12 at the filing date of the Rule 462(b) registration statement.. The registrant should consider, however, whether more current financial information would be required to be disclosed to investors to make the information in the registration statement not misleading.
Pursuant to Rule 457(a), a company registered 2,300,000 shares at $22.6875 per share for an aggregate offering price of $52,181,250. After effectiveness, the shares were priced at $31. That higher price was never reflected in the calculation of registration fee table on the cover page of the registration statement. The company wishes to increase the size of the offering using Rule 462(b). It must register the additional shares at the $31 price. Thus, the company may register up to 336,653 additional shares at $31 under Rule 462(b) (calculated by taking 20% of $52,181,250 and dividing it by $31).
In a single offering (not relying on Rule 415) that is both primary and secondary, the 20% increase in the offering size available under Rule 462(b) is calculated on the total aggregate dollar amount of the offering and may be allocated between the primary and secondary sellers in any manner desired. For example, an offering of $100 million in securities — $80 million primary and $20 million secondary — could be increased by $20 million under Rule 462(b) and all $20 million could be allocated to the previously identified secondary seller(s).
Pursuant to Rule 457(a), a company included in the calculation of registration fee table on its initial Form S-3 filing 1,000,000 shares of common stock at $20 per share for an aggregate offering price of $20,000,000. Before effectiveness, the company included a supplemental fee table in an amendment to the S-3 to register 200,000 more shares of common stock at the new higher bona fide estimate of $25 per share (for an increase in the aggregate offering of $5,000,000). After effectiveness and pricing at $26 per share, the company wishes to register additional shares under Rule 462(b). The Rule 462(b) limit for registering additional shares is calculated by taking 20% of $25,000,000 (derived by adding the $20,000,000 and the $5,000,000) and dividing it by the $26 actual price to permit registration under Rule 462(b) of no more than 192,307 shares.
A registration statement for 1,000,000 shares of preferred stock went effective with an estimated offering price of $15 per share, with the fee calculated and paid in reliance on Rule 457(a). After the effective date, but prior to the commencement of sales, the registrant sought to increase the number of shares to 1,150,000 and increase the offering price to $17.50 per share. Because more shares are going to be sold than were registered, the registrant must file a new registration statement to register the additional 150,000 shares at $17.50 per share. A short-form registration statement under Rule 462(b) would be possible since the number of additional shares (150,000) times the new price ($17.50) is less than 20% of the aggregate dollar amount in the calculation of registration fee table in the original effective registration statement ($15,000,000). However. no confirmations may be sent prior to the filing of the Rule 462(b) registration statement.
A registration statement registered $15,000,000 of preferred stock under Rule 457(o). The prospectus indicated that 1,000,000 shares were being offered. After the effective date, but prior to the commencement of sales, the registrant sought to increase the price from the intended $15 maximum to $17.50, without changing the number of shares in the offering. Because the stock was registered by dollar amount (Rule 457(o)), not by number of shares (Rule 457(a)), and because the dollar amount was increasing, the registrant must file a new registration statement to register the additional $2,500,000 of preferred stock. A short-form registration statement under Rule 462(b) would be possible since the $2,500,000 is less than 20% of the aggregate dollar amount registered in the calculation of registration fee table in the original effective registration statement ($15,000,000). However, no confirmations may be sent prior to the filing of the Rule 462(b) registration statement.
For EDGAR header purposes, when filing a Rule 424(b) prospectus supplement in connection with an offering that involves an initial effective registration statement and a second registration statement registering additional securities under Rule 462(b), the Rule 424(b) supplement must be filed under the registration number (33- or 333-) for the initial registration statement. The cover page of the Rule 424(b) supplement should, however, set forth the registration numbers of both the initial registration statement and the Rule 462(b) registration statement.
A registrant has an effective shelf registration statement with $500 million of unused capacity. The registrant wanted to use Rule 462(b) to increase the shelf capacity by 20% to $600 million, and then simultaneously takedown $200 million in common stock and $400 million in convertible debt, in separate offerings. However, Rule 462(b) was not available in this situation, as it can only be used once per delayed shelf offering and only at the time of final takedown. The registrant could takedown $200 million in common stock and then increase the convertible debt capacity from $300 million to $360 million in connection with a final takedown of convertible debt that would deplete the shelf.
Where a registration statement on Form S-4 registered insufficient shares to cover shares issuable upon the exercise of options during the period after the effective date of the registration statement but prior to the consummation of the merger, Rule 413(a) does not permit the registration of additional shares by post-effective amendment. The registrant could (1) rely on Rule 462(b) to prepare and file a short-form registration statement provided the amount to be registered was within the 20% limit and the other conditions were met; or (2) file a new registration statement that could be combined with the earlier registration statement pursuant to Rule 429.

Rule 463 — Report of Offering of Securities and Use of Proceeds Therefrom

Rule 463 requires periodic disclosure of sales of securities and use of proceeds during an issuer’s first registered offering. If the offering is a shelf offering of asset-backed securities, the Rule 463 reporting obligation is deemed satisfied by a report at the end of the first takedown. However, if new issuers are formed in connection with subsequent takedowns, for example, a series of single purpose corporations, each takedown by a new issuer will give rise to a new Form 10-D or Form 10-K Rule 463 reporting obligation.
Since a registered spin-off transaction typically does not generate any proceeds for the issuer, Item 701(f) of Reg S-K disclosure pursuant to Rule 463 is not required.
Securities of a one-bank holding company are issued pursuant to an automatically effective registration statement filed in reliance on General Instruction G to Form S-4. At a later date, the company files a registration statement on Form S-1 covering an offering for cash. The reporting obligation of Rule 463 is conditioned on the effectiveness of the issuer’s first registration statement and, accordingly Reg S-K Item 701(f) disclosure need not be provided with respect to the offering registered on Form S-1.
When a registration statement contemplates separate closings of limited partnerships to be formed in a series, the closing of each partnership in the series will be considered an "effective date" for purposes of triggering an obligation to provide disclosure pursuant to Rule 463.
If a registrant’s first filing under the Securities Act is a secondary offering, no disclosure need be provided in response to Item 701(f) of Reg S-K since there is no use of proceeds. However, the secondary offering would not constitute "the first registration statement filed under the Act by an issuer" for purposes of Rule 463. Accordingly, the first primary Securities Act offering by that registrant would necessitate disclosure under Item 701(f).
Use of proceeds disclosure is required in the issuer’s first periodic report filed following the effective date of its first registration statement filed under the Securities Act, even if the registration statement covered a best-efforts offering that has not closed on the due date of that periodic report.
On the same registration statement, in its IPO, a company registered X shares for sale to the public and Y shares for issuance pursuant to employee benefit plans. The company need report the use of proceeds as required by Rule 463 and Item 701(f) of Reg S-K only for the shares sold to the public and could omit the information relating to the employee benefit plan shares in reliance on Rule 463(d)(3). The result is premised on the representation that the employee benefit plan shares were originally registered for that purpose; had the plan shares been converted from shares originally registered for sale to the public that remained unsold, this position would not apply.

Rule 464 — Effective Date of Post-Effective Amendments to Registration Statements Filed on Form S-8 and on Certain Forms S-3, S-4, F-2 and F-3

To rely on the automatic effectiveness provisions of Rules 462 and 464 that apply to a Form S-3 or Form F-3 for a dividend reinvestment plan, the plan must satisfy the Rule 405 definition of "dividend or interest reinvestment plan." In particular, any plan that allows any person (including an employee) to make an initial purchase of the securities through the plan would not be a dividend or interest reinvestment plan under Rule 405.

Rule 466 — Effective Date of Certain Registration Statements on Form F-6

A depositary may not rely on Rule 466 to designate a date and time for a registration statement on Form F-6 to go effective when, in addition to a change in the ratio of American Depositary Receipts to the underlying foreign shares, the registration statement contains terms of deposit that differ from those disclosed in a previously filed registration statement on Form F-6. Rule 466 may be used only for changes in the ratio of ADRs to the underlying foreign shares. In all other respects, the terms of deposit for the new registration statement on Form F-6 must be identical to a previously filed registration statement on Form F-6.

Rule 477 — Withdrawal of Registration Statement or Amendment

A registration statement may be withdrawn under Rule 477 before effectiveness or after effectiveness if no securities were sold. Once any security has been sold under a registration statement, Rule 477 withdrawal becomes unavailable. Instead, the registration statement can be post-effectively amended to deregister the remaining unsold securities.
A registrant filing an IPO on Form S-1 may incorporate by reference exhibits it filed with a previous Securities Act registration statement even if it was withdrawn pursuant to Rule 477. The withdrawn registration statement remains a filed document for purposes of Rule 411(c) and, accordingly, the exhibits may be incorporated by reference.

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