8.2.2. Free Writing Prospectuses
In 2005, certain SEC restrictions were relaxed to allow additional kinds of offers. Perhaps the most influential modification was to allow free writing prospectuses (FWPs), which were introduced in Chapter 6. An FWP does not have to be accompanied by a preliminary prospectus. It also does not have to meet a preliminary prospectus’s content requirements. It may even contain additional information, just as long as it does not contradict the preliminary or final prospectus. FWPs must include a legend advising potential investors to read the preliminary prospectus, and telling them how to get one.
As previously mentioned, WKSIs are allowed to use FWPs in the pre-filing period, but other issuers can use them only after the registration statement has been filed. Ineligible issuers have extremely limited use of FWPs. Shell companies, blank check companies (including SPACs), and penny stock companies may not use them at all. Other types of ineligible issuers may use an FWP only if its contents are limited to a description of an offering or the terms of the securities in the offering.
Under most circumstances, an FWP must be filed with the SEC no later than the time of first use, and must be filed again each time its contents are substantively changed. If a WKSI uses an FWP during the pre-filing period, it may wait to file the FWP with the registration statement.
If a media report about the offering is based on information provided by the issuer, a distribution participant, or anyone acting on behalf of the issuer or a participant, then the media report is considered a free writing prospectus. In this case, the issuer or participant responsible for providing the information to the media outlet has until four business days after becoming aware of the publication or broadcast to file a copy of the communication with the SEC. This extended deadline only applies if the publisher or broadcaster is in the business of publishing or bro