Question: Does a transfer of restricted securities from a person’s employee benefit plan account to the person’s IRA need to be registered?

Answer: No, because there is no sale. The transfer does not effect a change in the beneficial ownership of the securities. [Nov. 26, 2008]

Question: A shelf registration statement is filed for the sale of preferred stock. The issuer contemplates that some of the preferred stock may be issued at a later date in a series that permits immediate conversion of the preferred into common stock. Must the issuer register the common stock on the shelf registration statement at the time of effectiveness?

Answer: No. When this series of convertible preferred stock is to be offered at a later date, however, the common stock underlying it would have to be registered in a separate registration statement (unless the conversion is exempt, e.g., under Securities Act Section 3(a)(9)). An alternative would be for the shelf registration statement at the outset to include a sufficient amount of common stock to cover the issuance pursuant to the convertible series. (N.B.: A separate registration statement would not be necessary if the issuer was eligible to file, and did file, an automatic shelf registration statement at the outset and the common stock was subsequently included on the automatic shelf registration statement.) [Nov. 26, 2008]

Question: Where the offer and sale of convertible securities or warrants are being registered under the Securities Act, and such securities are convertible or exercisable within one year, must the underlying securities be registered at that time?

Answer: Yes. Because the securities are convertible or exercisable within one year, an offering of both the overlying security and underlying security is deemed to be taking place. If such securities are not convertible or exercisable within one year, the issuer may choose not to register the underlying securities at the time of registering the convertible securities or warrants. However, the underlying securities must be registered no later than the date such securities become convertible or exercisable by their terms, if no exemption for such conversion or exercise is available. Where securities are convertible only at the option of the issuer, the underlying securities must be registered at the time the offer and sale of the convertible securities are registered since the entire investment decision that investors will be making is at the time of purchasing the convertible securities. The security holder, by purchasing a convertible security that is convertible only at the option of the issuer, is in effect also deciding to accept the underlying security. [Aug. 14, 2009]