Securities offering reform proposal

Abstract

Purpose

To summarize changes to the communication, registration, and offering process under the Securities Act of 1933 as adopted by the Securities and Exchange Commission on June 29, 2005 – three changes that will modify and significantly enhance the communication, registration, and offering process under the Securities Act of 1933, which according to the Commission are intended to eliminate “unnecessary and outmoded restrictions” on registered offerings. This article highlights the key provisions contained in the new rule release that are likely to affect the conduct of registered offerings.

Design/methodology/approach

Discusses benefits of automatic shelf registration, new provisions that will liberalize written communications before and during registered securities offerings, new disclosure liability rules, a new “access equals delivery” model, a separate requirement that investors be notified that they have purchased securities in a registered offering, a provision that allows reporting issuers to incorporate by reference previously filed Exchange Act reports into a Securities Act registration statement, a slight expansion of safe harbors available for broker‐dealers to publish research that constitutes an offer around the time of a registered offering, and changes in Exchange Act report disclosure.

Findings

The Securities and Exchange Commission intends the new rules to make the make the communication, registration, and offering process under the Securities Act of 1933 more efficient and to eliminate unnecessary and outmoded restrictions on registered offerings.

Originality/value

A practical guide to the new communication, registration, and offering rules.

Citation

Sirignano, D.A. and Farrell, S.P. (2005), "Securities offering reform proposal", Journal of Investment Compliance, Vol. 6 No. 2, pp. 44-47. https://doi.org/10.1108/15285810510644866