The Research Report Safe Harbors

What this video covers

• How the three safe harbors share a common definition of research report: a written communication with information, opinions, recommendations, or analysis about an issuer or security, whether or not sufficient to base an investment decision on
• The three-year lookback period and why it reaches predecessor companies that were blank check companies, shell companies (except those related to a completed business combination), or penny stock issuers
• Why the "regular course of business" requirement disqualifies promotional pushes tied to an offering and how each safe harbor adds its own twist to this condition
• The non-participant safe harbor: how it keeps a firm out of the underwriter definition by shielding publication from the words "offers," "participates," and "participation," and why it never extends to qualified institutional buyer (QIB) private resales or offshore offerings
• The different-class safe harbor: the specific security-type split (common stock and convertible securities versus non-convertible debt and non-participating preferred stock) and why it, together with continuing coverage, extends to QIB resales and offshore deals
• The continuing-coverage safe harbor: why initiation or resumption of issuer-specific coverage is an automatic fail, and the three strict hurdles for industry reports with financial projections
• The exam's favorite definition swap trap: which safe harbors alter the underwriter definition versus which alter the meaning of an offer, and why crediting the wrong one to the wrong function kills the answer