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To print this article, all you need is to be registered or login on Mondaq. Originally published August 29, Keywords: Securities Offering Reform Initiative, SEC, shelf registration, Rule , WKSI, automatic shelf registration statements, Form S-3, Form F-3 Prior to its Securities Offering Reform initiative, the SEC's rules limited the amount of securities that could be registered under certain shelf registration statements to an amount that, at the time the registration statement became effective, was reasonably expected to be offered and sold within two years from the initial effective date of the registration statement.
Thus, registration statements, in each case other than automatically effective registration statements, registering the following types of securities are not subject to the three-year limit: Securities that are to be offered and sold solely by selling security holders; Securities that are to be offered and sold pursuant to dividend or interest reinvestment plans and that do not allow participation by persons who are not existing security holders of the company; Securities that are to be offered and sold pursuant to employee benefit plans typically registered on Form S-8 ; Securities that are to be issued upon the exercise of outstanding options, warrants or rights or upon conversion of other outstanding securities; Securities that are pledged as collateral; Securities that are registered on Form F—6 i.
If the replacement registration statement is not an automatically effective registration statement, the company may continue to offer and sell securities covered by the expiring registration statement until the earlier of: days after the expiration of the threeyear period for the expiring registration statement; and The time the "replacement" registration statement becomes effective. Edward S. Treasury stated that the report was issued in response to Executive Order Unless regulators back up their words with actions, this drama is mostly noise, and lenders are free to continue to make BSBY loans.
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The grace period Rule a 5 provides that, if a non-WKSI issuer files a replacement shelf registration statement in respect of the same securities prior to the third anniversary of the date on which the existing shelf became effective, it can continue to sell securities under the existing shelf until the earlier of: effectiveness of the new registration statement, or days after the expiration of the existing shelf. Given that the company has sold none of the securities covered by the expiring shelf over the last three years, can it save a few dollars by including its unsold securities on the replacement registration statement and offsetting some of the fees paid in against any fees payable in connection with the new Form S-3 filing?
However, a filing fee would be required for any new securities registered on the replacement registration statement; you can only rely on Rule a 6 to include on the new replacement registration statement securities that remain unsold on an expiring registration statement. Please contact the Gibson Dunn attorney with whom you work or any of the following:. Amy L. Goodman — Washington, D. Lane — Washington, D. Moloney — Orange County , jmoloney gibsondunn. Mueller — Washington, D.
Lee — Orange County , dlee gibsondunn. Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice. Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
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First Step: Assess status of shelf registration statement Although some types of shelf registration statements are exempt, many of the most commonly used types are subject to the three-year rule. The three-year rule covers the following types of shelf registration statements: Automatic shelf registration statements. All automatic shelf registration statements expire after three years, regardless of the type of offering. Registrations of offerings on a continuous or delayed basis.
Registrations of mortgage-related securities. This includes registration statements covering mortgage-backed debt as well as mortgage participation or pass-through certificates.
The three-year rule does not cover the following types of shelf registration statements: Selling securityholder registration statements. WKSIs are also afforded greater flexibility in various other respects in connection with utilizing Form S-3s in comparison to non-WKSIs which discussion is beyond the scope of this blog. In this regard, while the filing of shelf registration statements on Form S-3 does not, in most cases, result in SEC review, and the time it takes to receive SEC clearance following the filing of a Form S-3 is relatively short often, 10 days or less , this gap period between the public filing of a Form S-3 and its subsequent effectiveness is generally suboptimal for companies that want to move quickly and opportunistically to raise capital.
As such, in order to potentially avoid this gap between filing and effectiveness, non-WKSIs may want to have an effective Form S-3 on file in the event that they contemplate making a public equity or debt offering in the foreseeable future.
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