Term
| No holding period required |
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Definition
| • Rule 144 governs sales by two different categories of people-affiliates (control persons) and nonaffiliates. The rule also applies to two categories of stock-registered and unregistered. Therefore, to answer questions concerning restrictions on stock sales under Rule 144, two issues are involved. In this question, the seller is an affiliate and the stock is registered. Therefore, the sale is subject to the volume restrictions imposed by Rule 144, but no holding period is required. |
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Term
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Definition
• For WKSIs, shelf registration statements (SEC Rule 415) are effective immediately, good for 3 years and may use free writing communication.
• Form SB-1 is a registration statement that may be used by issuers who wish to sell $10 million or less in securities. The form may also be used for amendments. If so, the amendments filed are effective immediately. |
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Term
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Definition
| • For new issues that qualify for listing on an exchange or Nasdaq, the prospectus delivery requirement period in the aftermarket is 25 days. If the new issue will trade on the OTCBB or OTC Pink Market, the period is 90 days. |
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Term
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Definition
| • Form 144, which alerts the SEC to the impending sale of unregistered or control stock, must be filed concurrently with or before the sale. |
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Term
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Definition
| • Securities with an ADTV of at least $100,000 and a public float value of at least $25 million are subject to a restricted period of one day, the business day before the effective date. |
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Term
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Definition
| • In order to allow FINRA to determine the fairness and reasonableness of the compensation to be received by the underwriters, the syndicate manager, within one business day of filing a registration statement with the SEC, must file information on the terms of the offering with FINRA. |
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Term
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Definition
| • Market makers who are also syndicate members in additional issue offerings must advise Nasdaq one business day prior to the beginning of the restricted period as to whether they elect to seek an excused withdrawal or to function as passive market makers. |
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Term
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Definition
| • Regulation A requires that an offering circular be provided to purchasers at least 48 hours before the confirmation of sale. |
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Term
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Definition
| • Insiders are required to report changes in their holdings to the SEC on Form 4 within two business days of the change. |
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Term
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Definition
| • Form 8-K is used to report newsworthy events to the SEC. The reporting time limit is four business days. |
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Term
| At Least 10 Business days |
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Definition
| • If the terms are changed, the offer must be open for at least ten business days from the date of change but never for less the original 20 business days. |
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Term
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Definition
| • Once a tender offer is announced, the target company, within ten business days of the announcement, must provide its shareholders with a statement indicating acceptance or rejection of the offer and the reasons for the position taken. |
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Term
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Definition
• Sarbanes-Oxley requires that within 10 days of becoming an officer or director of a publicly traded issuer, such person must file with the SEC a statement as to his/her ownership of the common stock of the issuer. The initial statement of ownership is done on Form 3. Subsequent changes are made on Form 4 within 2 business days.
• Within 10 days of reaching the 5% threshold, Form 13D must be filed with the issuer, the SEC and the market where the security principally trades. |
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Term
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Definition
| • SEC Rule 503 requires that issuers of unregistered securities file Form D (Notice of Sales Made) with the SEC within 15 days of the first sale. |
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Term
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Definition
| Regulation A requires notification to the SEC 20 calendar days before the sale |
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Term
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Definition
| • If the terms are changed, the offer must be open for at least ten business days from the date of change but never for less the original 20 business days |
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Term
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Definition
• For new issues that qualify for listing on an exchange or Nasdaq, the prospectus delivery requirement period in the aftermarket is 25 days. If the new issue will trade on the OTCBB or OTC Pink Market, the period is 90 days.
• The prospectus delivery requirement periods in the aftermarket are as follows: For IPOs, 90 days if the security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq. For additional issues, there is no requirement to deliver a prospectus in the secondary market if the security is listed or on Nasdaq. Once the distribution is complete, there is no further obligation to deliver a prospectus. If the security is non-Nasdaq, the prospectus delivery requirement period is 40 days. |
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Term
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Definition
| • After filing, a 30-day waiting period begins during which time the FTC will make a determination as to whether the proposed business combination violates antitrust laws. |
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Term
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Definition
| • The prospectus delivery requirement periods in the aftermarket are as follows: For IPOs, 90 days if the security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq. For additional issues, there is no requirement to deliver a prospectus in the secondary market if the security is listed or on Nasdaq. Once the distribution is complete, there is no further obligation to deliver a prospectus. If the security is non-Nasdaq, the prospectus delivery requirement period is 40 days |
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Term
| 45 Calendar days after the end of each quarter |
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Definition
| • Because the Investment Company Act of 1940 prohibits investment companies from attempting to control any issuer of securities, there is no need for immediate reporting. The position must be reported on Form 13G within 45 calendar days after the end of the year. |
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Term
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Definition
• The prospectus delivery requirement periods in the aftermarket are as follows: For IPOs, 90 days if the security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq. For additional issues, there is no requirement to deliver a prospectus in the secondary market if the security is listed or on Nasdaq. Once the distribution is complete, there is no further obligation to deliver a prospectus. If the security is non-Nasdaq, the prospectus delivery requirement period is 40 days.
• Section 302 of SOX requires that signing officers must certify that they have reviewed all periodic financial reports, that they do not contain any material untrue statements or omissions of material facts and that they have evaluated their internal controls within the previous 90 days and have reported on their findings.
• Once filed with the SEC, Form 144 is good for 90 days. |
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Term
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Definition
• An affiliate, in any 90-day period, may sell up to 5,000 shares or less or may sell stock with a value of $50,000 or less without having to file Form 144 with the SEC.
• For new issues that qualify for listing on an exchange or Nasdaq, the prospectus delivery requirement period in the aftermarket is 25 days. If the new issue will trade on the OTCBB or OTC Pink Market, the period is 90 days. |
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Term
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Definition
| • Securities purchased in a standby arrangement are not subject to FINRA Rule 5130 as long as the arrangement is disclosed in the final prospectus, the arrangement is in writing, and the managing underwriter represents in writing that it was unable to find other purchasers for the securities. These securities may not be resold for a period of at least three months. |
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Term
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Definition
• The lockup period is 180 days from the effective date.
• The CFD will review any compensation received by the underwriters during the 180 days preceding the filing. |
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Term
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Definition
| • During the offering period of a Regulation A offering, sales reports must be filed with the Securities and Exchange Commission every six months. A sales report must also be filed with the SEC when the offering period ends |
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Term
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Definition
• As long as the issuer is a reporting company, a nonaffiliate may sell unregistered shares after satisfying a holding period of six months.
• To sell unregistered stock under Rule 144, the shares must be held fully paid for six months and there must be current information available regarding the issuer (e.g., the issuer is filing reports with the SEC). Control stock is always subject to volume restrictions. |
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Term
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Definition
| • Rule 147 stock cannot be sold to a nonresident of the state for a period of 9 months from the last date of sale by the issuer. |
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Term
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Definition
• A Regulation A offering exemption allows issuers to sell up to $5 million of securities without going through a full-blown registration. A Regulation A offering is sometimes called the small offering exemption. The $5 million ceiling is measured over a 12-month period.
• Shares sold in a Regulation S offering are generally restricted for resale to a U.S. resident for a 12 month “seasoning” period from the offering date |
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Term
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Definition
| • Once effective with the SEC, a shelf registration is good for two years. This allows issuers who are looking for a window of opportunity to have an effective registration in place if and when the window opens. For well-known and seasoned issuers (WKSI), a shelf registration statement is good for three years. WKSI may take advantage of a safe harbor and make use of free writing communication during the shelf life. |
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Term
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Definition
• As long as the issuer is a reporting company, a nonaffiliate may sell unregistered shares after satisfying a holding period of six months.
• For WKSIs, shelf registration statements (SEC Rule 415) are effective immediately, good for 3 years and may use free writing communication |
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Term
| 9 months from last date of sale |
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Definition
| • Rule 147 stock cannot be sold to a nonresident of the state for a period of nine months from the last date of sale by the issuer. |
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Term
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Definition
| • Rule 144 allows the selling of 1% of the outstanding shares every three months or the weekly average of the last four weeks' trading volume, whichever is greater |
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Term
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Definition
| • SEC Form 13-D is filed when an unaffiliated entity acquires a 5% or more interest in an issuer. Investment companies would file Form 13-G. Insiders would file SEC Form 4. |
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Term
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Definition
| • With carve-out procedures in place, no more than 10% of the profit from a new issue equity investment may be attributed to the accounts of restricted partners. |
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Term
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Definition
• If the beneficial interests of restricted persons do not exceed 10% of an account, the account may purchase a new equity issue.
• The Corporate Financing Department considers shares acquired by an underwriter in excess of 10% of the total offering to be unreasonable compensation. |
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Term
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Definition
| • A Green Shoe over allotment option in an underwriting agreement allows the underwriters to sell up to 15% more shares than registered. The additional shares are provided by the issuer. Over-allotment provisions must be disclosed in both the registration statement and the final prospectus. |
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Term
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Definition
| • If there is a restricted period required by Regulation M, market makers that are also syndicate members in an additional issue offering can either seek an excused withdrawal for the period or elect to function as a passive market maker. As a passive market maker, a firm's net daily purchases are limited to 30% of the market maker's average daily trading volume in that stock. |
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Term
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Definition
• Under Rule 147, an issuer must be deemed a resident of a particular state. The issuer's home office must be in that state, and the 80% test applies to revenues, assets, and proceeds of the offering. The 100% test applies to purchasers.
• At least 80% of an issuer's gross assets must be physically located within its home state. |
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Term
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Definition
| • An offering at the market occurs when the offering price is not fixed, meaning that it can change many times daily. This public offering pricing technique applies only to additional issue offerings, in which case the open market price for existing stock (which will fluctuate during the day) is used to price the new stock on the offering date |
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Term
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Definition
| WKSIs may pay filing fees at the time of filing or on a "pay as you go" basis. |
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Term
| No higher than the highest independent bid |
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Definition
| • If there is a restricted period required by Regulation M, market makers that are also syndicate members in an additional issue offering can either seek an excused withdrawal for the period or elect to function as a passive market maker. As a passive market maker, a firm's net daily purchases are limited to 30% of the market maker's average daily trading volume in that stock. |
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Term
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Definition
| • Regulation D offerings are exempt transactions under the Act of 1933. Rule 504 deals with private placements in which the dollar amount to be sold is $1 million or less. Rule 505 offerings are those in which the offering amount is between $1 million and $5 million. Rule 506 deals with private placements in which there is no ceiling on the dollar amount sold. |
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Term
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Definition
| • To be considered an actively traded security, an issue must have an average daily trading volume of $1 million or more and a public float of $150 million or more. If a security is actively traded, there are no restrictions placed on market makers trading the issue before an offering of its securities. |
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Term
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Definition
| • The maximum size of an offering under Regulation A is $5 million per issuer and $1.5 million per affiliate. Sales are measured over a 12-month period |
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Term
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Definition
| • The maximum size of an offering under Regulation A is $5 million per issuer and $1.5 million per affiliate. Sales are measured over a 12-month period. |
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Term
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Definition
| • The Trust Indenture Act of 1939 applies to corporate bond issues of $5 million or more sold interstate. The act requires the issuer to appoint a trustee to protect the rights of future bondholders. |
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Term
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Definition
| • If the value of the proposed transaction exceeds $66 million, a report must be filed with the FTC and the Dept. of Justice. |
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Term
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Definition
| Under SEC rules, a seasoned issuer must have a public float value of at least |
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Term
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Definition
| • To be considered an actively traded security, an issue must have an average daily trading volume of $1 million or more and a public float of $150 million or more. If a security is actively traded, there are no restrictions placed on market makers trading the issue before an offering of its securities. |
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Term
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Definition
• A WKSI is an issuer in which nonaffiliated investors own at least $700 million in common equity. An advantage to being a WKSI is that shelf registrations are effective immediately and are good for three years, not two years. In addition, when filing an S-3ASR they are permitted to use a free writing prospectus (FWP) at anytime.
• A well-known, seasoned issuer must have a market capitalization of at least $700 million held by nonaffiliates. Alternatively, an issuer may qualify if, during the preceding three years, it issued, in the aggregate, $1 billion or more of nonconvertible securities other than common equity. |
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