How long does a shelf registration with the SEC last?

A shelf registration with the SEC allows a company to register a new security offering and sell it over a specified period without needing to register each sale individually. This type of registration is advantageous for companies that want the flexibility to issue securities when market conditions are favorable.

The correct duration for a shelf registration is three years. After the initial registration is filed and declared effective, the issuer has three years to sell the registered securities. This time frame allows companies to capitalize on favorable market conditions while not restricting their ability to respond to changes in the financial landscape.

Once the three-year period elapses, if the company has not sold all the securities covered by the registration statement, it would need to file a new registration statement for any unsold securities. This is why understanding the duration of a shelf registration is critical for both issuers and investors, as it impacts how and when securities can be sold in the market.