A Rule 415 offering, governed by the Securities and Exchange Commission (SEC) under Rule 415 of the Securities Act of 1933 (17 CFR § 230.415), is a registration statement filed by an issuer to offer securities for purchase in subsequent transactions (Law Insider, n.d.).
Key Facts
- Definition: A Rule 415 offering is a registration statement filed by an issuer to offer securities for purchase in subsequent transactions.
- Types of Securities: Rule 415 allows for the registration of various types of securities, including those offered by persons other than the issuer, securities issued upon exercise of options or conversion of other securities, collateralized securities, and securities issued in connection with business combination transactions.
- Continuous Offering: Rule 415 permits offerings that are made on a continuous basis and may continue for a period exceeding 30 days from the date of initial effectiveness.
- Shelf Registration Statement: A Rule 415 offering is often referred to as a “shelf registration statement” because it allows the issuer to have the securities “on the shelf” and ready for sale when market conditions are favorable.
- At the Market Offering: Rule 415 also covers “at the market offerings,” which are offerings of equity securities into an existing trading market for outstanding shares of the same class at a price other than a fixed price.
- Duration: Securities registered under Rule 415 can be offered and sold for up to three years from the initial effective date of the registration statement, with certain conditions and exceptions.
- SEC Compliance: The issuer must clear any SEC comments and fulfill the necessary requirements and undertakings specified by the SEC for Rule 415 offerings.
Types of Securities
Rule 415 allows for the registration of various types of securities, including:
- Securities offered by persons other than the issuer
- Securities issued upon exercise of options or conversion of other securities
- Collateralized securities
- Securities issued in connection with business combination transactions (17 CFR § 230.415(a)(1))
Continuous Offering
Rule 415 permits offerings that are made on a continuous basis and may continue for a period exceeding 30 days from the date of initial effectiveness (17 CFR § 230.415(a)(1)(ix)).
Shelf Registration Statement
A Rule 415 offering is often referred to as a “shelf registration statement” because it allows the issuer to have the securities “on the shelf” and ready for sale when market conditions are favorable (Bloomberg Law, n.d.).
At the Market Offering
Rule 415 also covers “at the market offerings,” which are offerings of equity securities into an existing trading market for outstanding shares of the same class at a price other than a fixed price (17 CFR § 230.415(a)(4)).
Duration
Securities registered under Rule 415 can be offered and sold for up to three years from the initial effective date of the registration statement, with certain conditions and exceptions (17 CFR § 230.415(a)(5)).
SEC Compliance
The issuer must clear any SEC comments and fulfill the necessary requirements and undertakings specified by the SEC for Rule 415 offerings (17 CFR § 230.415(a)(3)).
References
- Bloomberg Law. (n.d.). Capital Markets Overview: At-the-Market Offerings – Legal Issues. Retrieved from https://www.bloomberglaw.com/external/document/XN7CUBO000000/capital-markets-overview-at-the-market-offerings-legal-issues
- Law Insider. (n.d.). Rule 415 Offering. Retrieved from https://www.lawinsider.com/dictionary/rule-415-offering
- U.S. Securities and Exchange Commission. (2020). 17 CFR § 230.415 – Delayed or continuous offering and sale of securities. Retrieved from https://www.law.cornell.edu/cfr/text/17/230.415
FAQs
What is a Rule 415 offering?
**Answer:** A Rule 415 offering is a registration statement filed by an issuer to offer securities for purchase in subsequent transactions.
What types of securities can be offered under Rule 415?
**Answer:** Rule 415 allows for the registration of various types of securities, including those offered by persons other than the issuer, securities issued upon exercise of options or conversion of other securities, collateralized securities, and securities issued in connection with business combination transactions.
Can offerings under Rule 415 be made on a continuous basis?
**Answer:** Yes, Rule 415 permits offerings that are made on a continuous basis and may continue for a period exceeding 30 days from the date of initial effectiveness.
What is a shelf registration statement?
**Answer:** A shelf registration statement is a type of Rule 415 offering that allows the issuer to have the securities “on the shelf” and ready for sale when market conditions are favorable.
What are at-the-market offerings?
**Answer:** At-the-market offerings are offerings of equity securities into an existing trading market for outstanding shares of the same class at a price other than a fixed price. Rule 415 also covers at-the-market offerings.
How long can securities registered under Rule 415 be offered and sold?
**Answer:** Securities registered under Rule 415 can be offered and sold for up to three years from the initial effective date of the registration statement, with certain conditions and exceptions.
What are the SEC’s requirements for Rule 415 offerings?
**Answer:** The issuer must clear any SEC comments and fulfill the necessary requirements and undertakings specified by the SEC for Rule 415 offerings.
What are the benefits of using a Rule 415 offering?
**Answer:** Rule 415 offerings provide issuers with flexibility in terms of timing and pricing of their offerings. They also allow issuers to take advantage of favorable market conditions and reduce the costs associated with multiple offerings.