4.1.5.1. Types of Issuers
Registering securities with the SEC is always an exhaustive, time-consuming process, no matter how large or established the company. However, size and familiarity can make the process less onerous. Large companies that have issued securities previously will have a much easier time registering their securities than smaller companies that are registering securities for the first time. The SEC recognizes five different categories of issuers, according to their size, presence in the market, and reporting history. These categories determine which registration documents the new issuers must file with the SEC and what activities and communications the issuer may engage in following a new securities issue.
A well-known seasoned issuer is defined by Securities Act Rule 405 as an issuer that is eligible to use Form S-3—or Form F-3, the equivalent for foreign issuers—and that either:
• Has a worldwide public float of at least $700 million in voting and non-voting common equity
or
• Has issued at least $1 billion in nonconvertible securities, other than common equity, in primary offerings for cash during the prior three years
A majority-owned subsidiary of a WKSI may qualify as a WKSI on its own account, provided the parent company has unconditionally guaranteed the payment obligations of the subsidiary.
Ineligible issuers, asset-backed securities issuers, business development companies, and registered investment companies are not eligible for WKSI status, even if they otherwise meet the requirements.
Membership in this category has its privileges: WKSIs are subject to fewer restrictions during the registration period of an offering than are other types of issuers.
A seasoned issuer is a large company (but not as large as a WKSI) that has previously issued securities with the SEC. A seasoned issuer has one of the following properties:
• Public float of at least $75 million
or
• Securities listed on