A well-known seasoned issuer (WKSI) with a market cap of $15 billion files an automatic shelf registration statement on Form S-3. Which of the following statements is TRUE?
- AThe WKSI must wait 20 days before the shelf registration becomes effective
- BImmediate effectiveness; WKSI can add securities by post-effective amendment✓ Correct answer
- CThe WKSI must obtain FINRA approval before the registration becomes effective
- DAutomatic shelf registrations are only available for debt offerings
Why B — Immediate effectiveness; WKSI can add securities by post-effective amendment
Under SEC rules, well-known seasoned issuers enjoy automatic effectiveness of their shelf registration statements upon filing, with no waiting period or SEC staff review required before the offering can proceed. WKSIs also have the unique ability to add new classes of securities and increase the amount of securities offered through post-effective amendments that also become effective immediately. This provides maximum flexibility for capital markets access, allowing WKSIs to opportunistically access markets when conditions are favorable.
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