Public Offerings

The densest rule unit on the Series 79 on one sheet: the registration spine, the periods, the prospectus forms, permitted communications, shelves, the EGC scale-downs, Regulation FD, delivery duties, and the FINRA fairness review.

The One-Liners That Win Points

• Offers require FILING; sales require EFFECTIVENESS. Two separate gates: the offer gate opens at filing, the sale gate opens at effectiveness.
• Pre-filing means ANY offer, oral or written. A press interview or road-show appearance that conditions the market before filing is gun-jumping.
• The waiting period permits oral offers but NOT oral sales. A binding contract of sale cannot form until effectiveness; indications of interest are non-binding by design.
• The red herring is a real statutory prospectus, not a marketing piece. It omits final pricing, carries the required red-ink legend, and carries the same anti-fraud exposure for the content in it.
• Regulation S-K is the narrative (business, risk factors, management's discussion and analysis (MD&A)); Regulation S-X is the financial statements. Both are filed together in every registration statement.
• Access-equals-delivery covers the FINAL prospectus, satisfied once effective and either filed on EDGAR or a good-faith effort to file has been made. It does NOT eliminate the 48-hour preliminary-prospectus rule for a previously nonreporting issuer.
• The issuer has NO due-diligence defense for material misstatements in the registration statement (strict liability); underwriters, directors, signing officers, and experts all get the reasonable-investigation defense.
• A conflict does NOT automatically require a QIU. A conflicted member may proceed with prominent disclosure alone if a nonconflicted qualified member primarily manages the deal, the securities have a bona fide public market, or they are investment grade; a QIU is the fallback only when none of those applies.
• The Securities Act registers the SECURITIES; the Securities Exchange Act of 1934 registers the COMPANY. An IPO triggers both.
• A permitted free-writing prospectus (FWP) is still liable for material misstatements. Use-permission is not liability-shielding; the anti-fraud provision reaches every offer-related communication regardless of safe-harbor status.

Numbers to Lock In

Registration Spine and the Three Periods

• Pre-filing (quiet): no offer to sell or buy, written or oral; all selling efforts prohibited. "Conditioning the market" is the test, not "advertising the offering."
• Waiting (cooling-off): after filing, before effectiveness. Permitted: oral offers, the red herring, tombstone announcements, road shows, FWPs, and research within the safe harbors. Prohibited: sales and written offers outside the permitted formats.
• Post-effective: after the SEC declares effectiveness. Sales and offers allowed; the issuer must have filed the final prospectus, or made a good-faith, reasonable effort to file it on time; selling efforts must stay consistent with the statutory prospectus.
• Three statutory prohibitions form the spine: no sale before effectiveness, written offers must be a statutory prospectus or permitted FWP, and no offer before filing (gun-jumping). Gun-jumping can give buyers rescission rights.

Forms of Prospectus

• Preliminary (red herring): waiting-period document for indications of interest; omits final price and price-dependent items; required red-ink legend on the cover.
• Pricing omission at effectiveness: the registration can go effective without the final price; the price is filed by prospectus supplement within 2 business days.
• Base prospectus plus prospectus supplement (shelf): the base is filed at shelf effectiveness (generic); the supplement is filed at each takedown (deal-specific terms). The supplement is a piece of the base, NOT a new registration statement.
• Final prospectus: full statutory content, filed with the SEC, the compliance document for the delivery duty after effectiveness.

Permissible Communications by Period

• Pre-filing safe harbors (six): the WKSI free-writing exemption (oral AND written, no audience limit, WKSIs only); the non-exclusive 30-day safe harbor (any issuer, more than 30 days out, no offering reference, not for underwriters); the non-exclusive regularly-released factual and forward-looking information safe harbor (reporting issuers); regularly-released factual information only (non-reporting issuers, for customers/suppliers/non-investors); generic announcements; and EGC test-the-waters.
• Waiting-period toolkit (three written lanes plus oral): the tombstone (names the deal, cannot solicit indications of interest), the red herring (takes indications of interest), and the FWP (everything else in writing, legended and filed). Oral offers, including the live road show, sit outside all three written lanes.
• FWP framework: unavailable to ineligible issuers (timely-filing failures, shells, recent bankruptcy); issuer FWP generally filed; underwriter FWP filed only if broadly disseminated; unfiled FWPs retained 3 years.
• Research safe harbors (four): non-participating broker-dealer (not participating or proposing to participate, no interested-party consideration, any class); other-class (participating firm, specifically paired different class); regularly-published (participating firm, same class, ordinary-course pattern, industry reports need breadth and no extra prominence); asset-backed securities (participating firm, prior similar-collateral research history, cannot identify or emphasize the registered ABS). All require ordinary-course (or, for ABS, reasonably regular) publication.

Shelf Registration and WKSIs

• Shelf registers securities for continuous or delayed offerings; each takedown is a prospectus supplement, not a new registration.
• WKSI = short-form eligibility PLUS either 700 million dollar public float OR 1 billion dollar of registered non-convertible debt in the last 3 years (OR, not AND); cannot be an ineligible issuer.
• Automatic shelf (WKSI) goes effective immediately on filing with NO SEC review; combined with the WKSI free-writing exemption it enables next-day execution.
• Primary and automatic shelves expire 3 years after effectiveness; resale shelves run until the registered securities are sold.

Exam Tip: Gotchas

WKSI status is OR, not AND: 700 million dollar public float OR 1 billion dollar registered debt. A debt-heavy issuer with a small equity market cap can still be a WKSI.

JOBS Act and Emerging Growth Companies

• EGC status persists up to 5 fiscal years post-IPO (ends at that fiscal year-end); also lost on any one of these triggers: annual gross revenue exceeding 1.235 billion dollar (fiscal year-end timing), or, on the specific date crossed, large-accelerated-filer status or more than 1 billion dollar of non-convertible debt issued in the prior 3 years.
• Test-the-waters: an EGC may talk to qualified institutional buyers (QIBs) and institutional accredited investors (IAIs) before OR after filing; retail is excluded.
• Confidential submission: draft registration statement reviewed nonpublicly; public filing at least 15 days before the road show.
• Scaled disclosure package: 2 years of audited financials (not 3), reduced executive-compensation disclosure, exemption from the internal-controls audit attestation, and a forward-looking research carve-out.

Regulation FD

• Prohibits a reporting issuer from selectively disclosing material nonpublic information (MNPI) to securities market professionals or to holders likely to trade without public disclosure. A NARROW, conditional exclusion covers only specified registered-offering communications (registration statement/prospectus, post-filing FWP, tombstone/generic notices, post-filing oral offering communications); some shelf offerings fall outside the exclusion, so Reg FD can still apply inside a deal.
• Intentional selective disclosure (knowing or reckless as to materiality and nonpublic status): cure by disclosing publicly SIMULTANEOUSLY.
• Non-intentional: cure PROMPTLY, within 24 hours or before the next NYSE open, whichever is LATER (the "later of" is the tested part).
• Public disclosure by Form 8-K or another method reasonably designed for broad, non-exclusionary distribution; an invitation-only call is not broad distribution.

Exam Tip: Gotchas

The non-intentional cure window is "24 hours OR the next NYSE open, whichever is later." A Friday after-close slip runs to Monday's open, not Saturday.

Corporate Financing and Conflicts of Interest

• Corporate-financing rule: no unfair or unreasonable underwriting terms, covering both cash AND noncash compensation, evaluated case by case with NO fixed percentage ceiling; 180-day lock-up from commencement of sales; filed with FINRA within 3 business days of the SEC filing.
• Conflicts rule / QIU: a conflict (member offers its own securities, is an affiliate of the issuer, or receives 5 percent or more of net proceeds, excluding underwriting compensation) can proceed with prominent disclosure alone if a nonconflicted qualified member primarily manages the deal, the securities have a bona fide public market, or they are investment grade. A QIU is the fallback only when none of those applies; the QIU cannot own more than 5 percent of any class, must have served as an underwriter (sole, book-running lead, or co-manager) in 3 similar offerings in 3 years, and accepts an underwriter's full legal responsibilities and liabilities, including registration-statement liability.
• Two separate 5 percent tests: 5 percent of proceeds triggers the conflict; 5 percent ownership caps QIU eligibility.
• Disclosure duties: control relationships need written disclosure either up front or, if the initial disclosure was oral, supplemented by written disclosure at or before completion; distribution-participation disclosure must always be in writing, at or before transaction completion.

Civil Liabilities and Exchange Act Registration

• Registration-statement liability: strict liability for the issuer at effectiveness; due-diligence (reasonable-investigation) defense for non-issuers, with less diligence required on expertised (audited-financials) portions. Plaintiff must be a purchaser able to trace the shares to the offering.
• Prospectus-and-communications liability: selling-in-violation path (gun-jumping, sale before effectiveness, NO reasonable-care or due-diligence defense) plus a material-misstatement path that requires privity and gives a reasonable-care defense.
• General anti-fraud provision: reaches any offer or sale; negligence is enough under two of its three prongs; applies to exempt offerings too. Plaintiff is the SEC, not a standard private purchaser (courts are split on any implied private right); the registration-statement and prospectus-and-communications provisions are the reliable private-plaintiff routes.
• Exchange Act registration of the company: exchange-listed path (Form 8-A, most common), unlisted-trading-privileges path, and the asset-and-holder-count path (more than 2,000 holders of record or 500 or more non-accredited, plus total assets over 10 million dollar).

Top Gotchas

• Offers require filing; sales require effectiveness. Do not merge the two gates.
• The 48-hour preliminary-prospectus rule for a previously nonreporting issuer is separate from access-equals-delivery for the final prospectus; both can apply to the same offering.
• WKSI status is OR, not AND: 700 million dollar public float OR 1 billion dollar registered debt; a debt-heavy issuer with small equity can still be a WKSI.
• There is no current fixed FINRA compensation percentage ceiling; the real standard is "unfair or unreasonable" case by case, and it covers noncash compensation too. Treat any specific percentage figure as stale, legacy color, not the tested rule.
• A conflict does not automatically require a QIU; check the nonconflicted-manager, bona-fide-public-market, and investment-grade routes first.
• Two separate 5 percent tests in the conflicts rule: 5 percent of proceeds triggers the conflict, 5 percent ownership caps QIU eligibility.
• Reg FD's non-intentional cure is "24 hours OR next NYSE open, whichever is later" (a Friday after-close slip runs to Monday's open, not Saturday).
• The EGC revenue cap is 1.235 billion dollar, inflation-indexed; older sources quoting 1.07 billion dollar are stale.
• The pricing-omission mechanism is NOT access-equals-delivery; one lets the registration go effective without a price, the other satisfies the delivery duty after pricing.
• A permitted FWP or a research report inside a safe harbor is still exposed to the anti-fraud provision; clearing the registration spine does not clear the liability gate.

One-Breath Recap

Every registered offering rides the registration spine: pre-filing means silence (any offer, oral or written, conditions the market and is gun-jumping), the waiting period opens oral offers plus three written lanes (tombstone, red herring, free-writing prospectus) with sales still barred, and the post-effective period allows sales once the final prospectus is filed.

Access-equals-delivery satisfies the final-prospectus duty in the post-effective period, while the 48-hour rule still forces preliminary-prospectus delivery for a previously nonreporting issuer.

Layered on top are shelf registration and the WKSI automatic shelf (3-year life, effective on filing, no review, qualifying via 700 million dollar float OR 1 billion dollar registered debt) and the JOBS Act EGC framework (5 years, 1.235 billion dollar revenue cap, test-the-waters with QIBs and IAIs, 2 years of audited financials).

Regulation FD polices selective disclosure between offerings (intentional cured simultaneously, non-intentional within 24 hours or the next NYSE open, whichever is later).

The FINRA corporate-financing and conflicts rules run the fairness review: no fixed compensation ceiling, an unfair-or-unreasonable case-by-case standard, 180-day lock-up, 3-business-day filing, and a QIU only when no other compliance route applies for a member taking 5 percent or more of proceeds.

Master which period an activity sits in, and this fourteen-section unit answers itself.

Need more than the recap? Read the full Public Offerings unit.