Shelf Registrations

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A shelf registration is the registration of a new issue of securities that can be filed with the SEC up to three years in advance of the actual distribution of such securities. This allows a company to obtain funds quickly when needed, rather than compiling a registration document and then waiting for the SEC to declare the registration effective. It is especially useful for debt offerings, since a public company can wait for interest rates to decline before issuing any securities.

A shelf registration is governed by the SEC’s Rule 415. It can be accomplished through a Form S-3 filing, which in turn is restricted to certain companies that meet the SEC’s eligibility rules. It is also possible to use a Form S-1 to initiate a shelf registration, but only if the intent is to sell the securities “on an immediate, continuous, or delayed basis,” with all sales being completed within the next two years.

A shelf registration must be declared effective by the SEC before any securities sales related to it can be initiated. However, the SEC’s Rule 462(e) allows for some registration statements to be declared effective immediately upon their dates of filing. This automatic shelf registration is available only to well-known seasoned issuers (WKSI). A WKSI is a company whose common stock belonging to non-affiliates has a market value of at least $700 million, or which has issued at least $1 billion of non-convertible securities within the past three years and will register only non-convertible securities other than common equity. In addition, such filings have reduced information filing requirements.