Question: An issuer has registered an "at the market" offering of its common stock in reliance on Rule 415(a)(4) and has engaged a broker dealer to sell the securities into the existing trading market. Does the broker dealer have a prospectus delivery obligation with respect to the primary offering of the issuer's securities into the trading market and, if so, may the broker dealer rely on Rule 153 to satisfy such prospectus delivery obligation? Also, does the broker dealer have an obligation to provide a Rule 173 notice and, if so, to whom?

Answer: An "at the market" offering of securities by a broker dealer on behalf of an issuer is a primary offering of the issuer's securities. There is a prospectus delivery obligation as to such primary offering. The provisions of Rule 153 apply only to transactions between brokers, as it covers the requirement of a broker or dealer to deliver a prospectus to a broker or dealer. Rule 153 does not affect a broker's delivery obligation to purchasers other than brokers or dealers. As a consequence, brokers or dealers effecting transactions in the issuer's securities under the registration statement may have a prospectus delivery obligation to their clients who acquired those securities (which may be satisfied in reliance on Rule 172) and similarly may have an obligation to provide a notice pursuant to Rule 173. Rule 173 excludes transactions solely between brokers or dealers in reliance on Rule 153, but not as to other purchasers of the issuer's securities under the registration statement. [Aug. 14, 2009]