Quick Answer
Effective registration permits sales subject to remaining requirements. Access-equals-delivery requires its eligibility and filing conditions, including a permitted good-faith timely-filing route. Purchasers generally receive a final prospectus or registration notice within two business days after sale completion. Dealer delivery periods depend on reporting status and offering conditions. Covered preliminary-prospectus delivery occurs 48 hours before confirmation is sent.
The post-effective period is when the deal sells. The principal's job is to make sure the firm's confirmation, delivery, and aftermarket-trading practices stay inside the access-equals-delivery + purchaser-notice + dealer-aftermarket + broker-dealer-delivery framework.
Access Equals Delivery
Historically, the "preceded or accompanied" prospectus-delivery requirement meant a paper prospectus had to physically reach the purchaser by the time of confirmation. The access-equals-delivery reform replaced that with access:
| Element | What Access-Equals-Delivery Provides |
|---|---|
| Conditions | Effective registration, no specified pending proceedings, and the required final prospectus filed or a good-faith reasonable effort to file within the applicable deadline, with any missed filing made as soon as practicable afterward |
| Effect | Qualifying confirmations and allocation notices are exempt from the prospectus-form requirement, and the final-prospectus delivery obligation for securities transfer is satisfied |
| Separate notice duty | A final prospectus or registration notice is generally due within two business days after completion of sale; this separate duty is not a condition of the access exemption |
| Limits | Exclusions include business combinations, employee-plan registrations, registered non-variable annuities, and registered investment companies other than closed-end companies |
The exemption can remove physical prospectus delivery when its actual conditions are met. A sentence on a confirmation does not independently establish compliance, and final filing need not always precede confirmation if the permitted good-faith filing condition is satisfied.
Exam Tip: Gotchas
- The exemption is not permission for unrestricted sales literature. It addresses qualifying confirmations, allocation notices, and securities-transfer delivery. Other written offers still need their own lawful basis.
- Access-equals-delivery does NOT apply to business combinations. A merger that involves a registered exchange of securities still requires actual delivery of the prospectus (typically via the security-holder-approval delivery rule, which deems delivery satisfied when securities are distributed in connection with security-holder approval).
- The filing condition includes a good-faith route. A reasonable effort to file timely and prompt filing after a missed deadline can satisfy its stated terms. A promise with no reasonable compliance effort is insufficient.
Notice to Purchaser
For covered sales, the seller must provide a final prospectus or registration notice no later than two business days after completion of sale:
| Element | What the Notice Requires |
|---|---|
| Notice content | The sale was pursuant to a registration statement or would have required final-prospectus delivery without the access exemption |
| Delivery mechanism | The notice may accompany confirmation or be sent separately within the deadline; providing the final prospectus is an alternative |
| Purpose | Tells the purchaser that the sale was a registered transaction (and where to find the prospectus) |
In practice, the purchaser notice is often printed on the trade confirmation. Providing it is not a condition of the access exemption, which has no notice condition of its own.
Exam Tip: Gotchas
- The purchaser notice is a notice obligation, not a delivery obligation. It tells the purchaser that a final prospectus exists and where to get it. It does not require the firm to mail the prospectus.
- The duty is per purchaser in a covered sale. A confirmation without notice is not automatically a violation if the final prospectus or separate notice is supplied within the deadline. Specific transaction and offering exclusions apply.
Dealer Aftermarket Prospectus Delivery
After the offering, dealers in the secondary market still have residual prospectus-delivery duties for a window of time before the dealer exemption from the framework kicks in. The dealer aftermarket rule sets that window:
| Offering Type | Aftermarket Delivery Period |
|---|---|
| Qualifying listed or eligible quoted offering by a non-reporting issuer | 25 calendar days after the later of effectiveness or the first bona fide offering |
| IPO of issuer NOT listed / quoted (over-the-counter only) | 90 days |
| Reporting-issuer follow-on offering | No aftermarket delivery requirement |
| Unlisted non-reporting-issuer follow-on offering within the ordinary statutory category | 40 days, absent an applicable exception |
Use the later of effectiveness or the first bona fide public offering. Prior reporting status is tested immediately before registration-statement filing. Unsold allotments, dealers still acting as underwriters, stop orders, and blank-check offerings have special treatment. Applicable request duties are separate from the ordinary aftermarket period.
| Memory Map | Period |
|---|---|
| Listed IPO | 25 days |
| Non-listed IPO | 90 days |
| Unlisted non-reporting follow-on | 40 days, subject to exceptions |
| Reporting follow-on | None |
Exam Tip: Gotchas
- Nasdaq is a national securities exchange. The 25-day provision applies to qualifying listed or eligible quoted securities of non-reporting issuers; it is not limited by an IPO label alone.
- Reporting-issuer follow-ons have NO aftermarket delivery period. The market already has the issuer's 10-K and 10-Q disclosure; no special prospectus-delivery period is needed in the secondary market. This is the most-tested distinction.
- Request duties have their own scope. Covered purchasers may request a final prospectus under the notice rule. Participating dealers also have a separate prompt written-request duty during its specified distribution and statutory periods; it is not an unlimited duty on every dealer forever.
Broker-Dealer Prospectus Delivery Duties
The broker-dealer prospectus-delivery rule is the FINRA / SEC-enforced framework that operationalizes prospectus delivery at the customer level:
The 48-Hour Preliminary-Prospectus Rule
| Element | Requirement |
|---|---|
| Trigger | A participating broker-dealer in a covered issue by an issuer not previously required to report; asset-backed securities have specific provisions |
| Duty | Deliver the preliminary prospectus to each person expected to receive a sale confirmation |
| Timing | At least 48 hours before sending the confirmation |
Reasonable Steps by the Managing Underwriter
The managing underwriter must take reasonable steps to ensure that all participating broker-dealers have sufficient copies of the preliminary and final prospectus to satisfy their delivery duties. The manager controls the print-and-distribute pipeline; this rule makes the manager responsible for the syndicate's delivery capability.
Associated-Person Knowledge
A broker-dealer must make available to all associated persons who solicit customer interest a copy of the preliminary prospectus so they can understand the offering before talking to customers.
Anti-Fraud Status
The broker-dealer prospectus-delivery rule is enforced under the Exchange Act's manipulative-or-deceptive-device prohibition. Violations are anti-fraud violations: the firm is not just out of compliance with a procedural rule but in the stronger anti-fraud category.
Exam Tip: Gotchas
- Prior reporting status matters more than the IPO label. A typical reporting-company follow-on is outside the ordinary trigger, but asset-backed offerings have specific treatment and other prospectus duties remain.
- The "expected to receive a confirmation" formulation is broader than "actually receives one." A customer who indicates interest is "expected to receive a confirmation" once the syndicate moves to allocation. The 48-hour rule attaches to the expectation, not the final allocation.
- The manager's "reasonable steps" duty is a supervisory failure point. A manager that does not confirm the syndicate has copies is exposed not just to a procedural violation but to an Exchange Act anti-fraud finding.
Securities Distributed in Connection with Security-Holder Approval
The security-holder-approval delivery rule deems a final prospectus to be delivered for prospectus-delivery purposes when securities are distributed in connection with security-holder approval (e.g., merger securities issued in exchange for target shares) and the prospectus has been mailed to the security holders before they approve the transaction.
This is the rule that makes business combinations work: in an M&A registered exchange, the prospectus is mailed with the proxy statement before the security-holder vote. Once the vote happens and securities are exchanged, the rule treats the prospectus as having been delivered.
Exam Tip: Gotchas
- The security-holder-approval delivery rule is the "prospectus before the vote" rule. It is the delivery mechanism for business-combination securities, where access-equals-delivery does NOT apply. The pre-vote mailing of the prospectus is what satisfies the delivery requirement at the post-vote distribution.
Filing of Prospectuses on EDGAR
The prospectus filing rule specifies which versions of a prospectus must be filed with the SEC, in what format, and how soon after first use:
| Filing Path | What It Covers |
|---|---|
| Post-effective pricing supplement | Prospectus filed for an offering already declared effective (most common for IPOs) |
| Shelf-takedown pricing supplement | Prospectus filed for shelf takedowns |
| Material-changes update | Prospectus that reflects material changes from the version at effectiveness |
| Shelf supplement | Prospectus supplements for shelf takedowns |
Apply the filing category's deadline. Access-equals-delivery has its own filing condition, which includes the specified good-faith timely-filing alternative and prompt filing after a failure.
Exam Tip: Gotchas
- The filing and delivery requirements must be assessed separately. Do not infer compliance merely from effectiveness or a notice on a confirmation.
- A shelf takedown uses the shelf-takedown filing path, not the post-effective pricing supplement. The post-effective pricing supplement is the IPO / non-shelf route; the shelf-takedown supplement paths are for shelf offerings.
Stale Prospectus After Nine Months
The stale-prospectus rule forces the issuer to refresh financial information once it ages out:
| Threshold | Requirement |
|---|---|
| Prospectus used MORE than 9 months after effectiveness | Information must be as of a date not more than 16 months before use, insofar as known or obtainable without unreasonable effort or expense |
The age test does not replace other financial-statement currency or material-change duties. The required update route depends on the registration form and undertakings: it may require an effective post-effective amendment, or permit specified incorporated reports or prospectus supplements.
Exam Tip: Gotchas
- The 9-month / 16-month rule is two thresholds, not one. Nine months from the effective date triggers the test; the test is whether the financials are more than 16 months old. A prospectus that has been on file 11 months but has financials only 14 months old is still acceptable; an 11-month-old prospectus with 18-month-old financials must be refreshed.
- The 16-month test never runs if the 9-month trigger has not been reached, no matter how old the financials already are. A prospectus that is only 7 months past effectiveness is fine under this rule even if its financials happen to be 21 months old.
- The 9-month mark is a gate, not a second, independent age limit. Read the prospectus age first. Only check the financials against 16 months once the prospectus has passed 9 months.
- Fundamental changes can require a post-effective amendment. Permitted incorporation or supplement alternatives depend on the form and applicable undertakings; they are not a universal replacement for amendments.
The Post-Effective Sequence at a Glance
| Step | What Happens |
|---|---|
| 1. Effectiveness declared | SEC declares the registration statement effective |
| 2. Filing arrangements verified | Required final prospectus is filed or meets the permitted good-faith filing condition |
| 3. Covered preliminary delivery verified | Delivery occurred at least 48 hours before confirmation is sent; it can occur before effectiveness |
| 4. Confirmation of sale | Qualifying confirmation and transfer rely on the actual access-exemption conditions |
| 5. Prospectus or purchaser notice | Provided within two business days after completion of a covered sale |
| 6. Aftermarket dealer delivery | 25 / 40 / 90-day window depending on offering type |
| 7. Stale-prospectus refresh | At 9 months post-effective, financials must be 16 months old or less |
The principal supervises the firm's place in this sequence. The firm may be the manager (responsible for syndicate distribution and managing-underwriter reasonable steps), a syndicate member (responsible for its own customer delivery), or an aftermarket dealer (responsible for the dealer aftermarket delivery). Each role has its own checklist.
Exam Tip: Gotchas
- Access-equals-delivery, purchaser notice, dealer aftermarket, and the broker-dealer prospectus-delivery rule are not the same rule. Access-equals-delivery is the deemed-delivery reform; the purchaser notice is the per-buyer informational duty.
- The dealer aftermarket period is the residual delivery window in the secondary market; the broker-dealer prospectus-delivery rule is the BD-level operational duty (48-hour for IPOs, plus manager reasonable-steps duty). The exam will test the differences directly.
- The common 25 / 40 / 90 / 0 periods require the right conditions. Check prior reporting, listing, offering history, and special exclusions before selecting a period.
What Should You Check on Exam Day?
- Can you state the access-exemption conditions and recognize its excluded offerings and transactions?
- Can you apply the common dealer periods while checking reporting status, listing, and exceptions?
- Can you state the 48-hour rule: a broker-dealer must send the preliminary prospectus to expected-confirmation customers before an IPO confirmation?
- Do you know the stale-prospectus rule, that financials must be no more than 16 months old once a prospectus is used past 9 months?