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Securities Offering Reform
The SEC, effective December 1, 2005, adopted rules that will modify the registration, communications, and offering processes under the Securities Act of 1933.
Some major points of the release are highlighted below:
Well-Known Seasoned Issuers (WKSI):
Larger, more mature public issuers eligible for WKSI status will have the option of registering their securities offerings under a more streamlined registration process known as automatic shelf registration. Under this process, WKSIs can register offerings of different types of securities using new Form S-3ASR or Form F-3ASR registration statements that are effective upon filing.
Pay-As-You-Go Registration Fees:
WKSIs using automatic shelf registration statements will be permitted to pay filing fees in advance or at the time of a securities offering ("pay-as-you-go"). Under the new rules, issuers electing the "pay-as-you-go" option will not have to pay any filing fee at the time of filing the initial registration statement. The triggering event for a required fee payment is a takedown off a shelf registration statement. For each takedown, the issuer can file a prospectus supplement that includes a calculation of registration fee table or can file a post-effective amendment on new Form POSASR including the same information. The issuer must pay the appropriate fee within the time required to file the prospectus supplement pursuant to Rule 424.
424 Amendments:
A new paragraph (b)(8) is being added to Rule 424 for forms of final prospectuses not filed within the required timeframe under Rule 424.
Paragraph (b)(7) regarding term sheets sent or given in reliance on Rule 434 is being replaced (due to the elimination of Rule 434 in its entirety) with new paragraph (b)(7) for filing of prospectuses identifying selling security holders.
All 424 EDGAR headers will include fee data fields for WKSIs using automatic shelf registration.
Free Writing Prospectuses:
The rules as adopted permit written offers outside the statutory prospectus, if certain conditions are met. Such written offers outside of the statutory prospectus are defined as a "free writing prospectus." A free writing prospectus that satisfies specified conditions can be used by WKSIs at any time, including prior to filing the registration statement (pursuant to new Rule 163). Free writing prospectuses that satisfy the specified conditions can also be used by any other eligible issuer after a registration statement has been filed. Free writing prospectuses file under new Form Type FWP.
Form 10-K and Form 20-F:
WKSIs will have to indicate on a new check box on the cover page of Form 10-K and Form 20-F whether they are WKSIs.
Form S-2 and Form F-2:
The SEC is eliminating Form S-2 and Form F-2. Any amendments to Form S-2 and Form F-2 will have to be submitted using S-1/A or S-3/A and F-1/A or F-3/A, with an explanation on the facing sheet.
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