Provisions Applicable to All Registration Methods

Now that you understand the three individual methods, several rules apply across all of them. These common provisions under the Uniform Securities Act (USA) Section 305 govern who may file, escrow requirements, registration duration, and more.

Who May File

A registration statement may be filed by:

  • The issuer
  • Any other person on whose behalf the offering is made
  • A registered broker-dealer

A local broker-dealer (BD) may file independently of the issuer. This is particularly important in coordination cases, where a BD in one state may file on behalf of an out-of-state issuer.

Common Filing Requirements

Regardless of which registration method is used, the following information must be included:

  • The amount of securities to be offered in this state
  • States in which a registration statement or similar document has been or is to be filed
  • Any adverse order, judgment, or decree entered by regulatory authorities, any court, or the SEC in connection with the offering

Escrow and Impounding

The Administrator may require, as a condition of registration by qualification or coordination (NOT filing):

  • Escrow: Securities issued to a promoter for consideration substantially different from the public offering price, or for non-cash consideration, be deposited in escrow
  • Impounding: Proceeds from the sale of the registered security in the state be impounded until the issuer receives a specified amount from the sale

Exam Tip: Gotchas

Escrow and impounding conditions can be imposed on coordination and qualification registrations, but NOT on registration by filing. This makes sense because filing is for established issuers where promoter stock and proceeds impounding are less of a concern. If the exam asks which method(s) allow escrow/impounding, the answer is coordination and qualification only.

Duration of Registration

  • Every registration statement is effective for one year from its effective date (or longer if the security is still being distributed in a non-exempt transaction)
  • All outstanding securities of the same class as a registered security are considered registered for non-issuer transactions while the registration is effective
  • A registration statement may not be withdrawn for one year from its effective date if any securities of the same class are outstanding
  • Otherwise, withdrawal is at the Administrator's discretion

Exam Tip: Gotchas

  • Reports no more often than quarterly. Even while a registration is effective, the Administrator cannot demand monthly or weekly reports; quarterly is the maximum frequency permitted under Section 305.

Prospectus Delivery

The Administrator may require, as a condition of registration under any method (filing, coordination, or qualification), that a prospectus be sent or given to each person to whom an offer is made.

Reports

While a registration is effective, the Administrator may require the registrant to file reports to keep information current and disclose offering progress. These reports may not be required more often than quarterly.