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← Series 79: Underwriting & New Financing
Series 79 practice questionmediumSEC Registration Statements

An issuer files a registration statement and receives a deficiency letter from the SEC. What does this mean?

  1. AThe registration is permanently rejected and the company cannot go public
  2. BThe SEC is requiring the company to use a different registration form
  3. CThe company's financial condition is too weak to proceed with the offering
  4. DCorrect the disclosure by amendment before effectiveness✓ Correct answer
Explanation

Why D — Correct the disclosure by amendment before effectiveness

A deficiency letter (also called a comment letter) from the SEC's Division of Corporation Finance identifies areas where the disclosure in the registration statement is inadequate, unclear, or potentially misleading. The issuer must respond by filing amendments that address each comment. This iterative process continues until the SEC staff is satisfied with the disclosure, at which point the registration statement can be declared effective. Comment letters and responses are publicly available on the SEC's EDGAR system.

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