Updating And Correcting The Registration Statement - Securities Regulation

Updating and Correcting the Registration Statement

1. Post-Effective Amendments

   1. Correcting Material Inaccuracy

      • The registration statement can be amended after it has become effective, and under § 8(c), a post-effective amendment "shall become effective on such date as the Commission may determine."

      • § 10(b) provides that "a prospectus . . . shall contain the information in the registration statement."

        • Sales of securities by means of a materially deficient prospectus exposes sellers to liability under § 12(a)(2) of the '33 Act as well as the '34 Act's anti-fraud provisions.

      • § 10(a) requires the prospectus to "contain the information contained in the registration statement."

        • In practice, this language is interpreted to require a post-effective amendment of the registration statement only when the post-effective amendment of the registration statement only when the post-effective information is to be substituted for, but not added to, information appearing in the registration statement.

        • Information that does not portend the type of substantive change or addition referred to in Rule 424(a) can occur without filing an amendment to the registration statement.

          • Usually, such an addition occurs by placing a sticker containing the new information on the prospectus.

            • The stickers are affixed to the cover page or sometimes other appropriate pages in the prospectus.

            • The procedures for filing the stickered prospectus with the Commission are set forth in Rule 424(b)(3)-(5), and such filing does not constitute an amendment to the registration statement.

        • Post-effective amendments do not become effective without action by the Commission's staff.

          • While waiting for the staff to declare the amendment effective, the distribution efforts can continue using the stickered prospectus because the filing of a post-effective amendment does not disturb or suspend the effectiveness of an earlier effective registration statement.

          • When the post-effective amendment is declared effective, it reaffirms all that appears in the registration statement, and under § 11(a), the entire registration statement is deemed to speak as of the date that the post-effective amendment became effective.

            • This could create a liability problem if some of the information in the original registration statement was incorrect as of the date on which the post-effective amendment became effective.

            • EXCEPTION

              • § 10(a)(3) requires that whenever a prospectus is used more than nine months after the registration statement became effective, the information in such prospectus must not be from a date more than 16 months prior to such use.

              • § 10(a)(3) therefore demands that more recent information be substituted for that appearing in the earlier effective registration statement in those instances in which a prospectus is being used more than nine months after the registration statement became effective.

              • § 10(b)(3) however does not require this more recent information to be filed as an amendment to the registration statement. Does that even make sense?

   2. Supplementing Information that is Permitted to be Omitted Prior to Effectiveness

      • Rule 430A permits a registration statement to become effective despite the omission of certain price-related information.

      • Rules 430B and 430C permit a good deal of information to be omitted from the base prospectus for shelf registration offerings.

        • All three of these rule require that this information be filed with the SEC

          • One means of doing this is an amendment to the prospectus that includes the missing information

            • Rule 424(b)(2) requires that within two days of the sale, the information permitted to be omitted by Rule 430B in connection with a shelf registration must be filed with the SEC.

              • Such a post-effective amendment to the prospectus becomes a part of the registration statement.

              • Rule 430B(f)(1) provides that the registration statement is amended as of the earlier date the newly filed prospectus was first used or the first sale subsequent to filing the prospectus.

              • BUT this change applies only as to issuers and underwriters.

              • This will affect the liability of the various parties under § 11.

2. Undertakings to Update

   1. An important component of the shelf registration provision in Rule 415 is that undertaking extracted through Item 512(a) of Regulation S-K that the registrant will file a post-effective amendment to its registration statement:

      • (1) Any prospectus required by §...