Series 79 practice questionhardSEC Registration Statements
A Well-Known Seasoned Issuer (WKSI) can file an automatic shelf registration on Form S-3. Which is NOT a benefit of automatic shelf registration?
- AIt allows for registration of unspecified amounts of securities✓ Correct answer
- BIt is effective immediately upon filing
- CIt permits incorporation by reference to future SEC filings
- DIt exempts the issuer from all prospectus update requirements
Explanation
Why A — It allows for registration of unspecified amounts of securities
Automatic shelf registration is effective immediately, allows incorporation by reference, and provides flexibility in amount and types of securities. However, it does NOT exempt the issuer from prospectus update requirements; updates must still be filed. Assuming total exemption from updates is a common error.
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