Rule 3 of 14 in this unit1.4

1.4 Offerings

SIE outline 1.4

The Delivery Ladder: 90, 40, 25, None

Securities Act Section 4(a)(3) exempts ordinary dealer transactions from Section 5: but not for 40 days after the offering, and not for 90 days where the securities were not previously sold under an earlier effective registration statement. Rule 174(d) shortens it to 25 calendar days after the offering date for a listed or quoted issue of a non-reporting issuer, and Rule 174(b) removes it where the issuer already reported. NOT "a dealer delivers a prospectus forever." Every rung of the ladder ends, and the last rung: an already-reporting issuer: never starts.

The method for this kind of question
  1. 1h45m ÷ 80 items = 78.75 seconds per item. A sequencing item should cost you 30.
  2. Ask one question first: where on the clock is this stem standing?
  3. Nothing before the filing: Securities Act Section 5(c). "Before the registration statement was filed" is the trap.
  4. 20 days is Section 8(a)'s default: the SEC may accelerate it, and a pre-effective amendment restarts it.
  5. Delivery ladder in decreasing order of how unknown the issuer was: 90 · 40 · 25 (Rule 174(d)) · none (Rule 174(b)).
  6. "Purchased the entire issue" → firm commitment. "Best efforts" → the issuer keeps the unsold shares, and contingency money goes to a separate account or escrow under Rule 15c2-4(b).
  7. Next: SIE Practice Quiz #3: Offerings & Underwriting, every answer explained.

Now answer

1 question on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

After an issuer files its registration statement, how long is the default cooling-off period before the statement can become effective?

How sure are you?

Correct: A. Section 8-A sets the effective date at the twentieth day after filing, or such earlier date as the Commission may determine.
B. 90 days appears nowhere in the offering timeline the outline names.
C. 6 months is a Rule 144 resale holding-period figure, not the registration cooling-off period.
D. 20 days is the outline's own stated default, though the SEC may move it earlier.

Unit: SIE outline 1.4

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