Gunjumping Rules

  1. Pre-Filing Rules
    • Section 5(a)
    • Section 5(b)
    • Section 5(c)
    • Rule 405
    • Rule 433 (e)
    • Rule 163A
    • Rule 135

    • Rule 168
    • Rule 169
    • Rule 163
  2. Waiting Period Rules
    • Rule 430
    • Rule 433/164
    • Rule 134
    • Rule 135
    • Section 2(a)(10)(b)
    • Section 5(b)
    • Rule 405
  3. Post-Effective Period Rules
    • Section 8
    • Rule 137
    • Rule 139
    • Rule 461
    • Rule 460
    • Section 2(a)(10)
    • Rule 172
    • Rule 173
    • Rule 15(c)(2)-8(b)
    • Section 5(b)(1)
    • Section 5(b)(2)
    • Section 4
  4. Section 5(a)
    • unless reg statement in effect:
    • unlawful to sell
    • unlawful to deliver
  5. Section 5(b)
    • unlawful to transmit non section 10 prospectus
    • unlawful to carry security for sale without section 10 prospectus
  6. Section 5(c)
    unlawful to offer to sell or buy unless a reg statement has been filed
  7. Rule 405
    • definition of graphic communication:
    • written communication
    • does not include realtime info
  8. Rule 433 (e)
    • hyperlinks act as an offer if offer on website
    • excludes historical issuer info
    • separate section of website
  9. Rule 163A Pre-Filing Safe Harbor
    • exemption for purpose of Section 5(c)
    • 30 days before filing
    • no reference to offering
    • take steps to prevent further distribution
    • does NOT apply to underwriters or dealers
    • Reg FD does apply
  10. Reporting issuer Safe Harbor: Rule 168
    • exemption for purpose of Section 5(c) and 2(a)(10) : definition of offer & prospectus
    • factual business info:
    • ads of products
    • dividends
    • financial info
    • forward looking info
    • periodic exchange act info
    • cannot mention underwriter
    • underwriters and dealers excluded
    • can't mention offering
    • Must be previously released in ordinary course of business
    • materially consistent in timing, manner and form
    • Reg FD does apply
  11. Non-Reporting Issuer: Rule 169
    • same as 168 but does not include forward looking info
    • dissemenated in capcities as customers or suppliers
  12. WKSI: Rule 163
    • completely exempts oral and written communications including offers
    • treated as free writing prospectus
    • file with SEC promptly after filing reg statement
    • legend requirement
    • Reg FD applies
  13. Rule 135
    • Exemption from offer under 5(c)
    • short factual notices of proposed offering
    • only applies to issuers
    • can:
    • identify issuer
    • amount
    • basic terms
    • purpose of offering
    • anticipated timing
    • CANNOT mention name of underwriter
    • mandatory legend
  14. Rule 430: Preliminary Prospectus
    • filed with reg statement
    • no price info
    • can only be used during the waiting period
    • must be substantially similar to final prospectus
  15. Rule 433: Non-Reporting Issuers
    • Eligibility: only after filing reg statement
    • Section 10 Prospectus: must have filed, must accompany or precede FWP
    • Information: no info conflicting with reg statement, legend requirement, where to find reg statement
    • Filing: FWP filed with SEC no later than first use, have to file FWP prepared by other persons that contain issuer info
    • Record Retention: 3 years if not filed
  16. Rule 433: Reporting Issuers
    • Eligibility: only after filing reg statement
    • Section 10 Prospectus must have filed, no need to send prospectus
    • Information: no info conflicting with reg statement, legend requirement, where to find reg statement
    • Filing: FWP filed with SEC no later than first use, have to file FWP prepared by other persons that contain issuer info
    • Record Retention: 3 years if not filed
  17. Rule 433: Misc.
    • Media: no prospectus delivery requirement if uncompensated by issuer, issuer has to file communication as soon as they learn about it(within 4 days) OR file all materials provided to media including transcripts
    • Underwriter: only file FWP if distributed in a manner reasonably designed to achieve broad unrestricted dissemination
    • Inadvertent Filing Failures: can cure filing failures if good faith and reasonable care cure mistake as soon as practicable
  18. Tombstone Ad: Rule 134
    • can be used by issuers or underwriters or other participating offerors
    • allowed disclosures:
    • Issuer's legal identity
    • business location
    • amount & type of security
    • business of issuer
    • price of security or bona fide estimate
    • contact info
    • names of sellers
    • name of exchange
    • description of marketing events
    • geographic region

    • Mandatory disclosures:
    • legend
    • contact person to obtain prospectus
    • can just put a url
    • solicitations of interest allowed as long as you send a prospectus
  19. Section 2(a)(10)(b) definition of prospectus
    • includes any written communication or radio offering for sale
    • Not a prospectus if
    • from whom to get a prospectus
    • no more than identifies security , states the price, state whom is executing orders
  20. Section 8
    reg statement becomes effective 20 days after filing
  21. Delaying Amendment: Rule 473
    any amendment to reg statement resets the filing date for purposes of determining when reg statement efffective
  22. Research Reports: Rule 137
    • Safe harbor for broker dealers not involved in offering
    • can rely on 4(3) exemption if , not an underwriter, publication not during blackout periods in Rule 174, must be within regular course of business, must be uncompensated except for subscription fees
  23. Research Reports for Participating B-Ds: Rule 139
    • Issuer specific: only for Issuer eligible for S-3, 75 million Float requirement, must be in regular course of business, can't reinitiate coverage of issuer
    • Industry specific: all reporting issuers eligible, can't single out issuers, must be in regular course of business
  24. Rule 460
    requires distribution of preliminary prospectus to each underwriter and dealer who will participate before effective date
  25. Going Effective: Rule 430A
    • allows issuers to go effective even if omitting some info such as price
    • only for cash offerings
    • 15 days to provide price info or becomes amendment to reg statement have to file prospectus under Rule 424(b)(1)
    • Reg S-K Item 512(i): have to agree to treat Rule 424(b)(1) prospectus as if it was in effect earlier for antifraud purposes
  26. Rule 172: Access = delivery
    • Issuer must file final 10(a) prospectus with SEC
    • If satisfied, written confirmations of sales are exempted from 5(b)(1)
  27. Access= Delivery Rule 173
    • required if the 10(a) prospectus delivery requirement applies under Rule 174 and Section 4(3)
    • must be within 2 days of closing
    • notice that the sale took place under an effective registration statement or final prospectus
    • notice of rights to sue under Section 11 and Section 12(a)(2)
  28. Rule 15(c)(2)-8(b)
    requires participating broker to send a copy of prelim prospectus at least 48 hours prior to sending a written confirmation of sale
  29. Traditional FWP
    • Section 5(b)(1) proibits written or broadcast OFFER unless:
    • 10 (a) prospectus 10(b) prospectus Rule 430A prospectus Rule 431 summary prospectus Rule 433 Free writing prospectus

    Section 5(b)(2) requires that a 10(a) prospectus must precede or accompany SALE
  30. Section 4 Exempted Transactions from Section 5
    • does not apply to transaction besides issuer, underwriter or dealer
    • does not apply to issuer not involved in public offering
    • transactions by dealers if they do not solicit sales
    • does not apply to transactions by dealer except: if still acting as underwriters & follow Rule 174
    • Rule 174: must deliver prospectus if
    • within 0 days Reporting issuer prior to offering
    • within 25 days Issuer listed on national exchange
    • within 60 days non-IPO
    • within 90 days IPO
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Gunjumping Rules