Series 24: Communications Guidelines: Post-filing Period

Communications Guidelines: Post-filing Period

Acceptable communications:

• • Offers. All kinds of offers are now acceptable.
• • Sales. Sales are now acceptable, but they must be accompanied or preceded by a prospectus.

Prohibited communications:

• • Research communications about IPOs.  Research analysts who work for a company that participated in an IPO (as either an underwriter or a dealer) may not make public appearances or release research reports on the issuer for 10 days from the IPO. This is called a quiet period; it can also be referred to as a blackout period. 
• • Research communications about follow-on offerings. Research analysts who work for a manager or co-manager must not make public appearances or release research reports on the company for three days from the offering.
•  There is an exception to these rules for “actively traded” securities.
• • Research communications surrounding lock-up agreements. A lock-up agreement is a contract between underwriters and company insiders that prohibits them from selling any shares of a newly issued stock for a specified period of time after the public offering, usually 180 days. Following the lock-up period, there is a black-out period for the lead manager or co-manager of an offering. Research analysts that work for the lead manager/co-manager cannot make public appearances 15 days before or after the expiration of a lock-up period. Lead managing firms cannot publish research reports 15 days before or after the expiration of a lock-up agreement. This rule was put into place to make sure that insiders do not try to promote the security shortly before they wish to sell their shares.