Series 79 practice questionmediumFollow-On Offerings
A company qualifies as a Well-Known Seasoned Issuer (WKSI). Which advantage does this status provide for follow-on offerings?
- AElimination of all SEC review of its registration statement
- BAbility to use an automatically effective shelf registration on Form S-3✓ Correct answer
- CExclusion from state blue sky laws
- DExemption from providing financial statements in the prospectus
Explanation
Why B — Ability to use an automatically effective shelf registration on Form S-3
WKSI status allows issuers to file automatic shelf registrations, which become effective immediately. The trap is thinking WKSI status eliminates SEC review or other disclosure requirements, which is not correct.
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