SEC’s Clarification of Conditions for Use of WKSI Shelf Registration After Loss of WKSI Status

February 3, 2009

In its recently issued Compliance and Disclosure Interpretations, the Division of Corporation Finance of the U.S. Securities and Exchange Commission (“SEC”) clarified the procedure that an issuer must follow in order to be able to continue to issue securities under a well-known seasoned issuer (“WKSI”) shelf registration statement on Form S-3 or F-3 (a “WKSI Shelf”), without interruption, upon the loss of its WKSI status. Prior to issuing the clarification, there was uncertainty as to whether a WKSI Shelf would remain effective and eligible for use once the issuer’s WKSI status is lost. Given the recent turmoil in the financial markets, many issuers may lose their WSKI status imminently.

The SEC clarified that even if an issuer is no longer a WKSI at the time that it files its annual report on Form 10-K or Form 20-F, it may nonetheless continue to offer and sell securities under its existing WKSI shelf, but only if, prior to the filing of that annual report, the issuer amends the WKSI shelf so that it conforms with the requirements for Forms S-3 or F-3 for non-WKSI issuers. Specifically, the amendment must (i) register a specific amount of securities and pay the associated filing fee and (ii) include all information that would have been included in the shelf registration if it had been filed by a non-WKSI filer. In addition to amending the existing WKSI Shelf, promptly after the annual report is filed, the issuer must remain eligible to use Form S-3 or F-3 and must file either a post-effective amendment to the WKSI shelf or file a new shelf registration to convert the WKSI shelf to a non-WKSI shelf, which will be subject to review by the SEC before being declared effective. Pending the effectiveness of this filing, the issuer may continue to offer and sell securities using the amended WKSI Shelf.


Related Attorneys