Rule 429: Using a Single Prospectus for SEC Filings

Under the Securities Act of 1933, companies must file a registration statement with the U.S. Securities and Exchange Commission (SEC) before offering securities for sale. A component of this statement is the prospectus, a document providing investors with material information about the company and the securities. For companies that frequently raise capital, managing multiple registration statements can be administratively burdensome.

To address this, SEC Rule 429 permits a company to use a single, consolidated prospectus for securities offered under two or more separate registration statements. This allows an issuer to combine unsold securities from a previous offering with a new offering under one cohesive disclosure document. The function of Rule 429 is to simplify the offering process and ensure investors receive a clear prospectus covering all actively marketed securities.

Conditions for Using a Combined Prospectus

Before a company can use Rule 429, it must satisfy eligibility requirements. The primary condition is that the securities being offered from the different registration statements must be issued by the same entity, the registrant. This ensures the combined prospectus pertains to a single company’s securities, avoiding potential investor confusion.

A further requirement is that securities carried forward from an earlier registration statement must be of the “same class” as the securities being registered on the new statement. The concept of “same class” is interpreted to mean that the securities share identical rights and characteristics. For example, shares of common stock from a prior offering could be combined with a new offering of common stock, but not with an offering of preferred stock.

This rule is frequently employed with shelf registrations, particularly those filed on Form S-3. Shelf registration allows a company to register securities and then sell them into the market over time. When a company with an effective shelf registration files a new one, Rule 429 provides the mechanism to carry forward any unsold securities from the old shelf to the new one.

Using a combined prospectus under Rule 429 is a procedural convenience and does not alter the underlying registration requirements. Each offering must still be properly registered, and the combined prospectus must contain all the information that would be required if separate prospectuses were used.

Required Disclosures and Undertakings

When preparing a registration statement that relies on Rule 429, a company must include specific information and legal declarations. The cover page of the new registration statement must be clearly marked to indicate its relationship to previous filings.

An important disclosure is the identification of the earlier registration statements whose securities are being included in the combined prospectus. On the facing page of the new registration statement, the company must list the SEC file numbers of these prior registrations. This cross-referencing provides a clear audit trail for regulators and the public.

The prospectus itself must be drafted to function as a single, integrated document. It needs to present information about both the newly registered securities and the unsold securities being carried forward. This means the prospectus must be complete and current, reflecting all material information about the company and the terms of all securities being offered, not just an attachment of an old prospectus to a new one.

A legal component of a Rule 429 filing involves including certain undertakings in the registration statement. The filing of the new registration statement is then treated as a post-effective amendment to the earlier registration statement. This updates the effective date for the offering of the carried-forward securities to that of the new registration statement, which is important for determining liability under the Securities Act.

Filing Process, Fees, and Post-Effective Actions

The administrative side of a Rule 429 filing involves careful management of SEC filing fees and the formal disposition of the prior registration statement. The SEC allows companies to avoid paying registration fees twice on the same block of securities. This is accomplished by offsetting the fee for the new registration with fees previously paid on the unsold securities being carried forward.

To claim this offset, the company must provide specific information in the fee table on the cover of the new registration statement. This includes the file number of the prior registration, the type of securities, the amount of securities being carried forward, and the dollar amount of the fee previously paid on those securities.

The filing process follows a clear, two-step sequence. The first action is the submission of the new registration statement to the SEC. This filing will contain the combined prospectus, the required undertaking, and the fee offset calculations. This new registration statement goes through the standard SEC review process, though some filings, like an automatic shelf registration by a well-known seasoned issuer (WKSI) on Form S-3, become effective immediately.

The second action occurs after the new registration statement is declared effective. The company must then promptly file a post-effective amendment to the earlier registration statement. The sole purpose of this amendment is to formally deregister the exact number of securities that were carried forward to the new filing. This finalizes the transfer of the securities and ensures the company’s public filings are accurate and up-to-date.