Prospectus Requirements and Shelf Registration
Chapters in this video
- 0:00 Why Ivan the issuer cannot email a stock brochure to Carla
- 1:02 Prospectus essentials: mandatory risk factors and use of proceeds
- 2:10 The 9-month update rule for stale financials
- 3:12 Three SEC prospectus rules: preliminary, pricing-omission, and WKSI
- 4:40 Shelf registration mechanics and the takedown process
- 6:27 Free writing prospectus rules for IPO versus seasoned issuers
- 8:17 Rapid-fire exam recap
What this video covers
- Why a prospectus is legally deficient if it omits risk factors or use of proceeds, even with perfect financials and glowing management bios
- How the 9-month update rule forces issuers to refresh stale financial information in an active prospectus
- The distinction between the preliminary prospectus rule, the pricing-omission rule, and the WKSI base-prospectus rule
- How shelf registration lets issuers register securities once and sell portions over time via takedowns and prospectus supplements
- Why shelf registrations last up to 3 years for WKSIs and why each takedown requires a supplement, not a new registration statement
- What constitutes a free writing prospectus (FWP), from emails to brochures to website text
- Why IPO issuers must accompany or precede any FWP with the most recent preliminary prospectus, and why every FWP must be filed with the Securities and Exchange Commission (SEC)
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