U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Securities Offering Reform Transition Questions and Answers

These questions and answers represent the views of the staff of the Division of Corporation Finance with respect to questions we have received regarding issuers’ transition to compliance with the new rules and forms adopted by the Securities and Exchange Commission in the Securities Offering Reform rulemaking. The questions and answers are not rules, regulations, or statements of the Commission. Further, the Commission has neither approved nor disapproved these questions and answers.
 
The answers to each of the questions below assume an issuer’s eligibility to use the form, the offering type, or the rule that is discussed.

Effective Date of the New Rules

Question 1

Q: What is the effective date of the rules adopted in the Securities Offering Reform rulemaking (Securities Act Release No. 8591)?
A: The new rules become effective on December 1, 2005.

Use of New Communications Rules

Question 2

Q: Can issuers and other offering participants rely on the new communications rules – Rules 134, 163, 163A, 164, 168, 169, and 433 – for offerings that commence before December 1, 2005?
A: The answer to this question will depend on the date the communication first occurs, not the time of commencement of the offering. Accordingly, regardless of the time the offering commenced, an eligible issuer or offering participant could rely on these rules for communications that first occur on or after December 1, 2005, even if the offering commenced before December 1.
 
For purposes of Rules 164 and 433, whether an issuer is an “ineligible issuer” will be determined at the time of commencement of the offering, even if the offering commenced before December 1.

Inclusion of New Undertakings

Question 3

Q: When must the new undertakings in Item 512 of Regulation S-K be included in registration statements?
A: The new undertakings must be included in all registration statements or the first amendments to registration statements filed on or after December 1, 2005. The incorporation by reference of an Exchange Act report, such as a Form 10-K, that updates a registration statement for purposes of Section 10(a)(3) of the Securities Act is not an amendment for purposes of this Question 3.

Question 4

Q: If an issuer has filed a registration statement before December 1, 2005, but the registration statement is not effective as of that date, must the issuer include the new Item 512 undertakings in that registration statement before it becomes effective?
A: No. The issuer need not include the undertakings in the registration statement before it becomes effective if the issuer does not file a pre-effective amendment after December 1, 2005. If the issuer files a pre-effective amendment to the registration statement after December 1, 2005, it must include the undertakings in that pre-effective amendment. However, the issuer is not required to file a pre-effective amendment solely for the purpose of including undertakings, and the staff of the Division of Corporation Finance will not request such a pre-effective amendment.

Question 5

Q: If an issuer has a registration statement that became effective before December 1, 2005, must the issuer take any action solely to include the undertakings in that registration statement?
A: No. The issuer need not take any action solely to include the undertakings in the registration statement. If the issuer otherwise files a post-effective amendment after December 1, 2005, it must include the undertakings in that filing. However, the issuer is not required to make such a filing solely for the purpose of including undertakings, and the staff of the Division of Corporation Finance will not request such a filing.

Question 6

Q: On or after December 1, 2005, if an issuer wishes to include the new undertakings in a registration statement that became effective before December 1, 2005, what filing should it make?
A: The issuer may include the new undertakings in one of two ways:
 
  • it may file a new registration statement, use Rule 429 to combine that new registration statement with the prior registration statement, and include the undertakings in that new registration statement; or
     
  • it may file a post-effective amendment to an effective registration statement and include the undertakings in that post-effective amendment.

Automatic Shelf Registration Statements

Question 7

Q: If, as of December 1, 2005, a well-known seasoned issuer has an effective Form S-3 or Form F-3 registration statement, can it change that registration statement to an automatic shelf registration statement by filing a post-effective amendment?
A: No. If the issuer has an effective Form S-3 or Form F-3 that was not an automatic shelf registration statement when it became effective, it cannot amend that registration statement to become an automatic shelf registration statement. Instead, the issuer must file a new registration statement on Form S-3 or Form F-3 designated as an automatic shelf registration statement. The issuer may rely on Rule 457(p) to carry forward unused filing fees for unsold securities from effective registration statements. 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 will be designated separately from other registration statements on Form S-3 or Form F-3 to enable them to become effective immediately.

Question 8

Q: Can 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) be transitioned to an automatic shelf registration statement?
A: Yes. Following the guidance in the answer to Question 7, 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 carry forward the filing fees paid for any unsold securities under Rule 457(p).

Other Shelf Issues

Question 9

Q: If an issuer has a resale registration statement on Form S-3 or Form F-3 that becomes effective prior to December 1, 2005, may it rely on Rule 430B on or after December 1, 2005 to use prospectus supplements for the purpose of making material amendments to the plan of distribution or replacing selling security holders due to transfers or adding new selling security holders?
A: Yes. An issuer with an effective resale registration statement may rely on Rule 430B and file prospectus supplements pursuant to Rule 424(b) to make material amendments to the plan of distribution or to add or replace selling security holders, provided that:
 
  • the filing of that prospectus supplement is on or after December 1, 2005; and
     
  • in the case of adding or replacing selling security holders, the other conditions in Rule 430B regarding naming selling security holders by prospectus supplement are satisfied.

Question 10

Q: If an issuer has a registration statement on Form S-3 or Form F-3 that discloses that it may be used for “at-the-market” offerings, and that registration statement became effective before December 1, 2005, can the issuer rely on the revised provisions of Rule 415(a)(4) regarding “at-the-market” equity offerings or must it file a post-effective amendment to the registration statement to add the names of underwriters?
A: On or after December 1, 2005, an issuer that has an effective Form S-3 or Form F-3 registration statement that discloses that it may be used for “at-the-market-offerings” and meets the conditions of the revised provisions of Rule 415(a)(4) for such offerings, may conduct such at-the-market offerings in compliance with the revised provisions of Rule 415(a)(4). As such, an issuer in that situation would not have to file a post-effective amendment to the registration statement to add the names of underwriters and would not be subject to the previous 10% limit.

Question 11

Q: Can an issuer that has a plan of distribution that does not include “at-the-market” offerings amend that plan of distribution after December 1, 2005 by prospectus supplement and then conduct at the market offerings in compliance with the revised provisions of Rule 415(a)(4)?
A: Yes. An issuer eligible to engage in “at-the-market” offerings under the revised provisions of Rule 415(a)(4) may amend the plan of distribution after December 1, 2005 by a prospectus supplement that is deemed part of the registration statement to provide for “at-the-market” offerings in accordance with the revised provisions of Rule 415(a)(4).

Question 12

Q: When does the three-year period specified in Rule 415(a)(5) begin for shelf registration statements?
A: The answer will depend on whether the registration statement became effective before December 1, 2005, as follows:
 
  • for any shelf registration statement that is effective before December 1, 2005, the three-year period will begin on December 1, 2005, regardless of the length of time the shelf registration statement has been effective as of that date; and
     
  • for any shelf registration statement that becomes effective on or after December 1, 2005, the three-year period will begin on the effective date of that shelf registration statement.

Form 10-K, Form 20-F, and Form 10-Q Amendments

Question 13

Q: Do the amendments to Form 10-K, Form 10-KSB, and Form 20-F, requiring disclosure of risk factors, unresolved comments, well-known seasoned issuer status, and voluntary filer status, apply to an issuer that has its fiscal year end before December 1, 2005 but its annual report filing date after December 1, 2005?
A: No. Those amendments to Form 10-K, Form 10-KSB, and Form 20-F apply to fiscal years ending on or after December 1, 2005.

Question 14

Q: As a follow-up question to Question 12, when must an issuer begin including the required risk factor disclosure in its Form 10-Q?
A: The risk factor disclosure required in Form 10-Q must be included only after the issuer is first required to include risk factor disclosure in its Form 10-K. Accordingly:
 
  • if the issuer’s fiscal year ends before December 1, 2005, the Form 10-K for that fiscal year would not be required to include risk factor disclosure and, therefore, risk factor disclosure would not be required to be included in the issuer’s Forms 10-Q until after the issuer was required to file its annual report on Form 10-K for its first fiscal year ending on or after December 1, 2005; and
     
  • if the issuer’s fiscal year ends on or after December 1, 2005, the Form 10-K for that fiscal year would be required to include risk factor disclosure and, therefore, risk factor disclosure would be required to be included in the issuer’s subsequent Forms 10-Q.

http://www.sec.gov/divisions/corpfin/transitionfaq.htm


Modified: 09/13/2005