Thought Leadership  •  April 19, 2024

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What is an SEC Form S-3 Filing?

A Form S-3 filing is a simplified version of Form S-1 which is used to register a company’s securities with the Securities and Exchange Commission (SEC). Specific requirements apply when an abbreviated Form S-3 can be used and when the more detailed Form S-1 must be filed. 

Keep reading to discover the main difference between Forms S-1 and S-3, when the S-3 SEC filing is used, and what the filing requirements are.

What Is an S-3 Filing?

The S-3 filing is a registration form used by publicly traded companies when they are introducing securities to the market. The form provides basic information about the securities and the company that is offering them. The S-3 is intended for use by U.S. companies. Foreign companies offering shares on the U.S. market are required to complete a separate registration form type called an F-3.

By filing a Form S-3, a company provides vital facts regarding the business which is used to assist investors with forming their investment decisions. The form is generally used for offerings regarding the sale of preferred and common stock shares. Registration statements such as Form S-3 also play a valuable role in reducing securities fraud.

Form S-3 consists of two main parts. The first part includes:

  • A cover page
  • A prospectus, which will later be made available to investors
  • Explanation of risk factors that impact the securities

The second part includes:

  • Exhibits and disclosures. 

While these are not made widely available to the public on a company’s website, they can be accessed via the SEC's database.

When Is the S-3 Used?

There are certain requirements for use of an S-3, as mentioned above. The company must be publicly traded and headquartered within the U.S. (including U.S. territories).

While there are additional nuances to note, in most cases:

  • The S-3 is used 12 months after a company's IPO, in which initial shares were listed.
  • The company must follow SEC regulations during the year preceding the S-3 filing, including Sections 12, 13, 14 and 15(d).
  • The company must not be remiss on any investor dividends on existing preferred stock shares and is not in default on any loans.

Who Needs to Make an S-3 SEC Filing?

Publicly traded companies that registered shares in an initial or secondary offering and that wish to raise capital, must do so by filing a Form S-3. Companies must meet all necessary regulation requirements prior to submitting a Form S-3 filing with the SEC.

What Is the Difference Between S-1 and S-3 Filing?

The S-3 is shorter than the S-1 filing, but is that the only difference?

Let's review what the Form S-1 filing entails.

The S-1 filing is referenced as an initial and/or secondary filing. An initial offering on Form S-1 is used to register the company as a public entity and register company shares. A Form S-1 must be filed with the SEC before a company is allowed to register with a national stock exchange.

It is typical for a company to complete its S-1 during the run-off to its initial public offering (IPO). However, if the company is going public through another means, such as a SPAC/De-SPAC, it will still need to complete an S-1 when the initial shares are listed.

The S-1 goes into detail about the company, its business model, and the type of information investors need to know regarding securities for sale.

When the S-1 transaction is completed and the company is ready to raise capital, a Form S-3 would be filed with the SEC. Prior to filing an S-3, all other criteria for the form as listed above must be met. 

The S-3 form is straightforward. Not only is it easier for investors to understand due to its brevity, it is also easier for companies to complete.

However, there are still some considerations to note. It takes time and effort to pull together the information required for an S-3 filing. There are accounting expenses and legal fees associated with the filing as well.

Rather than list small amounts of shares for sale frequently, which would necessitate a new S-3 filing for each offering, companies should consider delaying their S-3 filing until they have a financially meaningful number of securities to register.

How to File an S-3

The SEC requires electronic filing of most SEC form types, including the S-3. Filings must be made through the SEC's database, which is known as EDGAR. To quickly and accurately prepare forms for SEC filing while taking best-in-class data protection measures during data transmission, many companies use secure, cloud-based SEC filing software with the capability to encrypt data during transmission.

Software like that offered by DFIN includes collaborative features that provide access control for team members who need to collaborate on SEC filings, regardless of where individuals are located. Advanced SEC filing software use machine learning and artificial intelligence to check forms for accuracy. This reduces errors associated with manual filing while helping companies file their forms on time. 

Streamline your next SEC filing by investing in software that has the right built-in features and data protection, like DFIN's ActiveDisclosure.