Effective only since Dec. 1, 2005, recent reforms to the Securities Act of 1933 — designed to modernize the securities-offering process — have begun to have an impact on securities distribution techniques. Before these rules took effect, the basic regulatory framework for securities distributions had changed little since 1933 despite enormous advances in communication technology and the size and sophistication of the securities markets. The new rules effect a number of significant changes, ranging from technical aspects of the registration process to fundamental issues of whether and when various offering participants have Securities Act liabilities.

Two of these rule revisions have particular potential to alter some of the most basic securities-offering practices. The first is the permissible use of “free-writing” prospectuses, and the second is a new interpretive rule that moves up the time at which the adequacy of disclosure to investors is assessed for purposes of certain Securities Act liabilities. This article discusses both changes in more detail, makes some observations about their impact to date and offers some modest predictions about their future.

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