FINRA implements same‐day clearance process of shelf registration statements

Abstract

Purpose

The purpse of this paper is to explain the new “Same‐Day Clearance Option” FINRA has made available to issuers and members effective March 1, 2010.

Design/methodology/approach

The paper explains the background of pre‐offering review of registered securities offerings for compliance with FINRA's regulations and the increased volume of shelf takedown offering submissions that led FINRA to offer the Same‐Day Clearance Option; outlines the three same‐day clearance methods, base filing only, takedown filing, and concurrent based and takedown filing; and discusses the effect the Same‐Day Clearance Option will have on issuers and members.

Findings

Since September 2008, the financial markets have been extremely volatile, causing many issuers' market capitalizations to fall and the number of shelf takedown offering submissions to increase accordingly, placing a greater burden on FINRA and causing a delay in the review and approval process for a number of such offerings.

Practical implications

With this change, issuers will be better able to take advantage of market conditions when they prove amenable to offerings, and members will be better positioned to market and consummate an offering without the time constraints presented by the traditional FINRA approval process.

Originality/value

The paper provides practical guidance from experienced securities lawyers.

Citation

Bressman, S. and Ghorra, T.J. (2010), "FINRA implements same‐day clearance process of shelf registration statements", Journal of Investment Compliance, Vol. 11 No. 2, pp. 46-48. https://doi.org/10.1108/15285811011056402