Cooling-off Period
Once the registration statement has been completed, it will be filed with the SEC. The SEC will take 20 days to review it. This period is called the cooling-off period (also called the waiting period and registration period) because the company will not be able to sell shares to the public and only certain kinds of limited offers will be allowed. During this time, the SEC will not try to determine whether all statements are accurate or whether the security is a good investment, they will simply be trying to make sure that everything that is supposed to be in the registration statement is actually in it.
If there are no material omissions or misleading statements, the registration statement will become effective after 20 calendar days. If the SEC does find issues with the prospectus, it will give a “qualified decision” and the issuer will have to file an amendment to the prospectus. Once an
