In an effort to address the timing issues related to FINRA's review of public offerings of securities registered on a "shelf" registration statement, on Monday, March 1, 2010, FINRA will implement a "Same Day Clearance Option" for base prospectuses, shelf takedowns, and concurrent shelf filings under FINRA Rule 5110. The option, if elected to be used, is intended to provide issuers with an ability to complete shelf offerings on a more expedited timeframe. This new option is separate from the current expedited process available for WKSI offerings.
Under the new option, FINRA will provide same-day, automatic clearance for the issuer's base prospectus and/or shelf takedown prospectus supplement, provided that certain representations are made to FINRA. Specific representations will likely include the following:
- the terms and arrangements between participating FINRA members and the issuer do not include any prohibited arrangements under FINRA Rule 5110(f);
- the aggregate underwriting compensation (commissions, expenses and other compensation) to be received by participating members will not exceed 8% of the gross offering proceeds;
- all underwriting compensation will be disclosed in the applicable offering document;
- participating members have not acquired unregistered securities of the issuer that would be deemed to be underwriting compensation during the 180-day period preceding the filing (with the exception of non-convertible or non-exchangeable debt securities and derivative instruments that are entered into at a "fair price"); and
- in the event that NASD Rule 2720(a)(2) applies, the QIU has been approved by FINRA within the 12-month period prior to the filing.
Filings submitted to FINRA after 4 PM Eastern time will be accepted the next business day.
FINRA's Corporate Financing Department will host four (4) WebEx training sessions regarding the new option: Tuesday, February 23, 2010, at 10 AM EST and 2 PM EST, and Wednesday, February 24, 2010, at 10 AM EST and 2 PM EST.