Shelf Registration Under Rule 415 - Securities Regulation

Shelf Registration under Rule 415

1. Shelf Registration under Rule 415

   1. Rule 415(a)(1)(i) through 415(a)(1)(xi) provides for various types of securities for which shelf registration is permissible:

      • Rule 415 (Stat. Supp. pp. 134-36)

        • (a) Securities may be registered for an offering to be made on a continuous or delayed basis in the future. Provided, That-

          • (1) The registration statement pertains only to:

            • (i) Securities which are to be offered or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of the registrant or a person of which the registrant is a subsidiary;

            • (ii) Securities which are to be offered and sold pursuant to a dividend or interest reinvestment plan or an employee benefit plan of the registrant;

            • (iii) Securities which are to be issued upon the exercise of outstanding options, warrants or rights;

            • (iv) Securities which are to be issued upon conversion of other outstanding securities;

            • (v) Securities which are pledged as collateral;

            • (vi) Securities which are registered on Form F-6 . . . ;

            • (vii) Mortgage related securities, including such securities as mortgage backed debt and mortgage participation or pass through certificates;

            • (viii) Securities which are to be issued in connection with business combinations transactions;

            • (ix) Securities the offering of which will be commenced promptly, will be made on a continuous basis and may continue for a period in excess of 30 days from the date of initial effectiveness;

            • (x) Securities registered (or qualified to be registered) on Form S-3 of Form F-3 . . . which are to be offered and sold on an immediate, continuous, or delayed basis by or on behalf of the registrant, a majority-owned subsidiary of the registrant or a person of which the registrant is a majority-owned subsidiary; or

            • (xi) Shares of common stock which are to be offered and sold on a delayed or continuous basis by or on behalf of a registrant closed-end management investment company or business development company that makes periodic repurchase offers . . . .

   2. Pursuant to Rule 415(a)(3), the registrant must furnish the undertakings required by Item 512(a) of Regulation S-K.

      • In accordance with Item 512(a)(1)(i) of Regulation S-K, the registrant must undertake to file a post-effective amendment covering any prospectus required by § 10(a)(3).

        • This in effect means that the registrant must update its financial statements annually.

      • Any acts or events arising after the effective date of the registration statement that individually or in the aggregate represent a fundamental change in the information set of the registration statement are required by Item 512(a)(1)(ii) of Regulation S-K to be disclosed in a post-effective amendment.

      • Item 512(a)(1)(iii) of Regulation S-K requires a registrant to file a post-effective amendment for any material change with respect to the distribution.

   3. Under Rule 424(b)(2), for many of the securities where shelf registration is permissible, including securities registered pursuant to Rule 415(a)(1)(x), the filing of a prospectus supplement is not required until two days later, to accompany confirmation or delivery of the security.

      • Rule 424(b)(2) provides:

        • A form of prospectus that is used in connection with a primary offering of securities pursuant to Rule 415(a)(1)(x) . . . or a primary offering of securities registered for issuance on a delayed basis pursuant to Rule 415(a)(1)(vii) or (viii) . . . and that, in the case of Rule 415(a)(1)(viii) discloses the public offering price, description of securities or similar matters, and in the case of Rule 415(a)(1)(vii) and (x) discloses information previously omitted from the prospectus filed as part of an effective registration statement in reliance on Rule 430B . . . , shall be filed with the Commission no later than the second business day following the earlier of the date of the determination of the offering price or the date it is first used after effectiveness in connection with a public offering or sales, or transmitted by a means reasonably calculated to result in filing with the Commission by that date.

   4. Rule 430B

      • The shelf registration procedures contemplate that certain information regarding the distributed security will not be known until after the registration statement has become effective.

        • When this occurs, the information that is filed with the SEC and forms the registration statement when it becomes effective is known as the base prospectus.

        • Thereafter, the SEC's rules set certain time limits for the missing information to be provided.

        • Understanding this regulatory process begins with Rule 430B

      • Rule 430B broadly authorizes omissions from the base prospectus of information that is unknown or not reasonably available to the issuer (e.g., the price), as well as omitting details pertaining to the securities that will be sold via the base prospectus

        • In the case of seasoned issuers, the base prospectus can omit the identity of any selling security holders as well as the amounts they propose to sell.

          • This information can be provided via a later filing after the effective date.

        • A prospectus that omits information in accordance with Rule 430B is not a final prospectus

          • BUT is is nonetheless a prospectus that can be used in any case other than when a final prospectus is required.

        • When the supplemental information is combined with the base prospectus, they constitute a final prospectus.

          • Under Rule 430B(b), the information authorized to be omitted is later included in a post-effective amendment, a prospectus filed with the SEC pursuant to Rule 424 OR in certain instances through the issuer's periodic reports that are incorporated by reference.

            • Rule 430B provides that a prospectus supplement must be prepared and filed pursuant to Rule 424 when the information omitted from the base prospectus is later provided via an amendment to the issuer's Exchange Act's filings.

              • However, this requirement is satisfied if the prospectus supplement merely identifies the report in which the amendment has been made.

        • Rule 430B(e) expressly provides that when the earlier omitted information is subsequently included in the prospectus that this information becomes part of the registration statement so that the liability under § 11 attaches to the supplemented information.

        • Rule 430B applies to all offerings by (1) WKSIs, (2) shelf offerings pursuant to Rule 415(a)(1)(x), certain secondary offerings, and (4) offerings of mortgage backed securities.

2. Automatic Shelf Registration for Well-Known Seasoned Issuers

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