Series 79: 6.1.1. The Pre-Filing Period

6.1.1. The Pre-Filing Period

The pre-filing period is simply the period before a registration statement for the public offering has been filed with the SEC. Securities cannot be offered, purchased, or sold during the pre-filing period.

The company that will offer the securities is referred to as the issuer. The issuer typically hires an investment bank to act as the underwriter for the offering. The underwriter assists the issuer with the registration process, as well as marketing and selling the securities to the public. Technically, the issuer does not sell the securities to investors. Rather, the issuer sells them to the underwriter at a discount, and then the underwriter sells them to investors. The difference between the price the underwriter pays to the issuer and the price it charges investors is called the underwriting spread or just the spread. This is how the underwriter gets paid.

Note: The term spread has several meanings in the world of securities: underwriting spread, bid-ask spread, credit spread, etc. Make sure your study notes are written so that when you go back to them, you know w