Shelf registration
Encyclopedia
Shelf registration is a process authorized by the U.S. Securities and Exchange Commission under Rule 415 that allows a single registration
document to be filed by a company that permits the issuance of multiple securities
. Form S-3 issuers may use shelf-registration to register securities that will be offered on an immediate, continuous, or even on a delayed basis. Other special types of securities, such as those used in a business combination, Mortgage backed securities, and those of a closed-end fund.
In July 2005 the SEC put in place “automatic registration” shelf filings. This filing is a relaxed
registration process that applies to well-known, seasoned issuers (WKSIs, pronounced "Wiksy"), and covers debt securities,
common stock, preferred stock and warrants, among other various instruments. A WKSI is a company
that has filed all annual, quarterly and current reports in a timely manner, and either has a greater than
$700 million market capitalization or has issued $1 billion in registered debt offerings over the past
three years.
Shelf registration is a registration of a new issue which can be prepared up to three years in advance, so that the issue can be offered quickly as soon as funds are needed or market conditions are favorable. For example, current market conditions in the housing market are not favorable for a specific firm to issue a public offering. In this case, it may not be a good time for a firm in the sector (e.g. a home builder) to come out with its second offering because many investors will be pessimistic about companies working in that sector. By using shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable.
Finally, firms often use universal shelf filings and choose between debt and equity offerings based on the prevailing relative market conditions.
Securities Act of 1933
Congress enacted the Securities Act of 1933 , in the aftermath of the stock market crash of 1929 and during the ensuing Great Depression...
document to be filed by a company that permits the issuance of multiple securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
. Form S-3 issuers may use shelf-registration to register securities that will be offered on an immediate, continuous, or even on a delayed basis. Other special types of securities, such as those used in a business combination, Mortgage backed securities, and those of a closed-end fund.
In July 2005 the SEC put in place “automatic registration” shelf filings. This filing is a relaxed
registration process that applies to well-known, seasoned issuers (WKSIs, pronounced "Wiksy"), and covers debt securities,
common stock, preferred stock and warrants, among other various instruments. A WKSI is a company
that has filed all annual, quarterly and current reports in a timely manner, and either has a greater than
$700 million market capitalization or has issued $1 billion in registered debt offerings over the past
three years.
Shelf registration is a registration of a new issue which can be prepared up to three years in advance, so that the issue can be offered quickly as soon as funds are needed or market conditions are favorable. For example, current market conditions in the housing market are not favorable for a specific firm to issue a public offering. In this case, it may not be a good time for a firm in the sector (e.g. a home builder) to come out with its second offering because many investors will be pessimistic about companies working in that sector. By using shelf registration, the firm can fulfill all registration-related procedures beforehand and go to market quickly when conditions become more favorable.
Finally, firms often use universal shelf filings and choose between debt and equity offerings based on the prevailing relative market conditions.