Series 6: 1.2.1.4. Post-Effective Period

1.2.1.4. Post-Effective Period

The post-effective period is the period after the registration statement has become effective. At this point, the company is allowed to sell its securities to the public, although a few things need to be done first, such as setting the price and signing the underwriting agreement.

During the cooling-off period, the price of the offering will not yet have been set, and the underwriters present a price range to investors. If interest was high, the underwriters set the price at the high end of the range (even setting the price above the range if the issue is particularly hot, meaning it is appealing to investors and is in great demand). If interest was low, the underwriters set the price at the low end of the range. The price is usually set right after the registration statement becomes effe