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Securities Issuance Post-filing Waiting Period

15. What are the limitations on an issuer during the “Post-Filing Waiting Period”?

During the post-registration, waiting period, special rules apply to the general dissemination of information about the issuance. Generally, oral discussions or offers to buy the securities are unregulated. This allows investment banks to carry on a “road show”, which is a concerted effort by the bank to build a book of subscribers for the security issuance. Written offers to sell (or other solicitations) must be accompanied by a prospectus that meets statutory standards for disclosure. Anyone submitting a written request to purchase must receive a prospectus that has been reviewed and approved by the SEC. No actual sales can occur until the registration statement “goes effective” for any issuer.

•    Note: One notable exception under Rules 164 and 433, seasoned issuers and WKSI can use a free-writing prospectus, so long as it contains information on where to get the statutory prospectus. Unseasoned issuers and non-reporting issuers (IPO filers) can use free writing so long as accompanied by statutorily approved prospectus.

•    Discussion: Why do you think the securities laws closely regulate written disseminations of information during the post-filing period? Why do you think these are treated differently than oral communications? Should there be a free-writing prospectus exception for certain issuers? Why or why not?

•    Practice Question: ABC Corp is a well-known, seasoned issuer. It has made the registration statement with the SEC and is awaiting approval. Jamie is an investor and approaches ABC Corp (through its representative) with a written request to purchase a large block of shares. If ABC Corp chooses to respond to Jamie’s inquiry with any information about the issuance, what are its obligations and limitations?

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