Once all the proper registration information has been completed and submitted to both the SEC and NASD there is only one thing a company can do: wait. The particular examiner at the SEC that received the filing will typically issue a comment on the filing shortly thereafter. This comment will typically include the SEC file number for the share registration. The NASD will also typically review the registration to ensure the affiliated broker-dealer/underwriter does not violate any underwriting compensation limits. NASD reviews can take a long and unpredictable amount of time. Comment rounds can be issued in one to two month intervals and there is really no way to predict how long the process of registering your public shares may take.
Comments from the SEC on a registration can vary depending on the deal. Even more established firms with extensive experience in submitting such requirements to the SEC will receive different quality and quantity of comments which may vary depending on the business and its financials. Because the comments revolve around both financial and non-financial issues having direct access to accounting, finance and legal professionals throughout the review process to review and submit replies to SEC comments is important. Comments may request clarification or changes to submitted financial statements or potentially changes to the business description.
As long as there are not large issues brought on by the SEC which may require direct contact with the accompanying SEC examiner, most submitting companies will simply file an amendment to the SEC. Amendments to the comments will likely include individual and detailed responses to the single issues raised by the SEC. Once the amendment is filed with the corresponding responses, the SEC will iterate and provide yet another round of review and comments. Typically each round of comments will included far fewer comments than the previous round. The iterative process ceases once the reviewers run out of comments. The SEC can purposefully (although probably not admittedly) delay a filing if they have any suspicion for specific players in the deal or if something isn’t feeling or looking quite right.
After the completion of the SEC “back-and-forth” a share registration is deemed “effective.” An effective registration can be used to resell securities that were registered through the registration process. When it comes to taking a company public, especially if you’re doing it from scratch, there are processes and procedures that must be followed. With a little patience and a lot of expertise, share registration can be completed painlessly–at least for more.