SEC Rule 433

Overview and Regulatory Purpose

Prior to the 2005 Securities Offering Reform, the Securities Act's gun-jumping framework imposed severe constraints on written communications about a registered offering. Section 5(b)(1) prohibited the transmission of any prospectus relating to a registered security unless that prospectus met Section 10's requirements. Because the definition of prospectus in Section 2(a)(10) of the Act was broad — encompassing any written communication that constitutes an offer of a security — virtually any written document discussing the terms or merits of a registered offering was a prospectus subject to Section 10's requirements, and any prospectus that did not satisfy those requirements could not be transmitted during the offering period without a Section 5 violation.

The practical consequence of this framework was severe rigidity in the marketing of registered offerings. Underwriters, analysts, and issuers were constrained to communicate with investors through only two channels: the formal statutory prospectus and the strictly limited categories of communication exempted by Rules 134, 135, 137, 138, and 139. The electronic communications revolution of the 1990s — the internet, email, electronic road show materials — had dramatically expanded the range of written communications that market participants naturally wanted to use in marketing offerings, but the statutory prospectus framework had no mechanism for accommodating those communications without triggering Section 5 liability.

Rule 433 addresses this problem by creating a category of post-filing written offer — the free writing prospectus — that satisfies Section 10(b)'s requirement for a written prospectus and is therefore a lawful communication under Section 5(b)(1), without needing to meet the more demanding requirements of Section 10(a) that govern final statutory prospectuses. A free writing prospectus used in compliance with Rule 433's conditions is a Section 10(b) prospectus — it satisfies Section 5(b)(1)'s requirement that transmitted prospectuses meet Section 10's requirements, through the Section 10(b) route rather than the Section 10(a) route. 

This enables market participants to transmit supplementary written offering communications — ranging from investor presentations and term sheets to electronic road show materials and press releases about offering terms — without violating the gun-jumping rules, provided Rule 433's conditions are satisfied.

Statutory Authority and Rulemaking History

Rule 433 derives its statutory authority from Sections 5, 10, and 19 of the Securities Act of 1933. Section 5 establishes the prohibition framework within which free writing prospectuses must operate; Section 10(b) authorises the Commission to prescribe requirements for prospectuses used after the filing of a registration statement and before effectiveness, providing the statutory basis for Rule 433's Section 10(b) prospectus designation; and Section 19(a) provides the Commission's general rulemaking authority.

Rule 433 was adopted as a new rule in the 2005 Securities Offering Reform rulemaking, Securities Act Release No. 33-8591, published at 70 FR 44815, August 3, 2005. 

The adoption of Rule 433 was part of a comprehensive package of offering reform rules that together restructured the relationship between issuers, underwriters, and investors during the registered offering process. 

Rule 433 was designed to work in conjunction with Rule 164, which provides the legal mechanism through which a free writing prospectus satisfying Rule 433's conditions becomes a Section 10(b) prospectus, and with the free writing prospectus definition in Rule 405, which defines what communications qualify as free writing prospectuses in the first place. Rule 433 provides the conditions; Rule 164 provides the legal consequence of satisfying those conditions; and Rule 405 defines the category of communication to which both apply.

Rule 433 has been amended on four occasions since its 2005 adoption: February 13, 2006 — 71 FR 7413 — with a technical correction; September 24, 2014 — 79 FR 57331 — in connection with the Regulation AB II rulemaking; June 1, 2020 — 85 FR 33355 — in the Exempt Offering Framework rulemaking; November 25, 2022 — 87 FR 72846 — in connection with the registered non-variable annuity reform; and July 24, 2024 — 89 FR 60083 — in a further registered non-variable annuity amendment. No pending rulemaking proposes changes to Rule 433 through June 2026. The May 2026 Registered Offering Reform proposal would extend Rule 433's free writing prospectus regime to Exchange Listed Issuers — a benefit currently available to all Form S-3 eligible issuers following effectiveness of their registration statements — but does not propose substantive amendments to the rule's operative conditions.

Key Provisions and Operative Requirements

Rule 433(a) establishes the scope of the rule. Rule 433 applies to any free writing prospectus with respect to securities of any issuer that are the subject of a registration statement that has been filed under the Securities Act. A free writing prospectus satisfying Rule 433's conditions may include information whose substance is not included in the registration statement — this is a critical feature distinguishing free writing prospectuses from formal prospectus amendments. An issuer may use a free writing prospectus to communicate information about its offering that has not yet been incorporated into the formal registration statement, provided the conditions of Rule 433 are met, and those communications constitute lawful offers of the security.

Rule 433(b) establishes the eligibility conditions — the conditions under which a free writing prospectus may lawfully be used, which vary by issuer category. Rule 433(b)(1) provides the most permissive regime for well-known seasoned issuers: a WKSI may use a free writing prospectus at any time after the filing of a registration statement with respect to which the offering conditions of Rule 164 are satisfied. Because automatic shelf registration statements are effective immediately upon filing, a WKSI may in practice use a free writing prospectus essentially from the moment it files its automatic shelf. Rule 433(b)(2) establishes the conditions for eligible non-WKSI issuers and other offering participants where the issuer does not qualify as a WKSI. For these issuers, use of a free writing prospectus is permissible if prepared by or on behalf of, or used or referred to by, the issuer or any other offering participant, where consideration has been or will be given by the issuer or other offering participant for the dissemination of any free writing prospectus, only if a registration statement relating to the offering has been filed that includes a statutory prospectus satisfying Section 10 — including a price range where the offering involves a price range. This requirement that the registration statement be filed and contain a Section 10 prospectus before non-WKSI issuers may use free writing prospectuses reflects the Commission's judgment that the investor protection framework of the statutory prospectus must be in place before the supplementary communications of free writing prospectuses are added.

Rule 433(c) establishes the mandatory legend requirement. A free writing prospectus used in reliance on Rule 433 must contain substantially the following legend: "The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling [telephone number]." The mandatory legend serves the same investor access function as the Rule 173 notice in the prospectus delivery context — it ensures that recipients of free writing prospectuses are directed to the formal registration statement and statutory prospectus filed with the Commission, preventing free writing prospectuses from substituting for the formal disclosure document in investors' decision-making.

The legend requirement under Rule 433(c) is subject to a materiality exception under Rule 164(c): an immaterial or unintentional failure to include the specified legend does not result in a Section 5 violation so long as a good faith and reasonable effort was made to comply, the free writing prospectus is amended to include the legend as soon as practicable after discovery, and the corrected free writing prospectus is retransmitted to recipients by substantially the same means.

Rule 433(d) establishes the filing obligations applicable to free writing prospectuses. The issuer must file with the Commission any free writing prospectus that is used by or on behalf of the issuer. The timing of this filing obligation varies: a free writing prospectus must be filed on the date of first use, except that a free writing prospectus that is an electronic road show — a road show that is a written communication as defined in Rule 405 — need not be filed if a bona fide electronic road show satisfying the conditions of Rule 433(d)(8) is made available without restriction. For offering participants other than the issuer — underwriters, dealers, and other distribution participants — the filing obligation is more limited. An offering participant other than the issuer must file any free writing prospectus used or referred to by that offering participant that is distributed by or on behalf of the offering participant in a manner reasonably designed to lead to its broad unrestricted dissemination. This broad unrestricted dissemination standard, confirmed through FINRA Regulatory Notice 10-52, means that a broker-dealer distributing a free writing prospectus to its own customers on a restricted basis — through a password-protected website or direct email — is not engaged in broad unrestricted dissemination regardless of the number of customers reached, while a broker-dealer posting a free writing prospectus to an unrestricted public website or releasing it to the media is engaged in broad unrestricted dissemination requiring filing.

Rule 433(d)(1)(i) provides an immateriality carve-out parallel to that in Rule 164(b): an immaterial or unintentional failure to file a free writing prospectus as required does not result in a Section 5 violation, so long as a good faith and reasonable effort was made to comply and the free writing prospectus is filed as soon as practicable after discovery.

Rule 433(e) establishes the accompaniment condition applicable to free writing prospectuses used after the registration statement has been filed but before it has become effective. In those circumstances, a free writing prospectus must be accompanied or preceded by the most recent statutory prospectus satisfying Section 10 of the Act. For electronic communications, this condition is satisfied if the free writing prospectus contains an active hyperlink to the most recent statutory prospectus — a provision that has made electronic free writing prospectuses significantly simpler to deploy than their paper counterparts, since a simple hyperlink satisfies the accompaniment condition rather than requiring physical attachment or sequential mailing of the statutory prospectus.

Rule 433(f) establishes the retention obligation. Free writing prospectuses used in connection with a registered offering must be retained by the issuer for three years following the initial bona fide offering of the securities covered by the registration statement.

Scope of Application

Rule 433 applies to all issuers and offering participants using free writing prospectuses in connection with a registration statement that has been filed under the Securities Act. The rule's conditions — legend, filing, accompaniment, and retention — apply regardless of whether the issuer is a WKSI, a non-WKSI eligible issuer, or a foreign private issuer, subject to the differences in eligibility conditions established by Rule 433(b). Ineligible issuers as defined in Rule 405 — including blank check companies, shell companies other than business combination related shell companies, and issuers with recent antifraud-related proceedings — are generally excluded from the free writing prospectus framework, though Rule 164(e) provides a limited exception for free writing prospectuses that contain only descriptions of the terms of the offering.

Rule 433 is not available for offerings conducted under Securities Act exemptions — it applies only in the context of registration statements filed under the Act. An issuer conducting a Regulation D offering or a Regulation A offering does not use Rule 433 free writing prospectuses; those frameworks have their own communication rules. For Regulation A offerings, Rule 255's testing the waters framework serves an analogous but distinct function, permitting pre-qualification solicitation of interest communications that are explicitly subject to the antifraud provisions but are not classified as free writing prospectuses under Rule 433.

Relationship to Related Rules and Regulations

Rule 433 operates in a tightly integrated framework with Rule 164 and the free writing prospectus definition in Rule 405. Rule 164 provides the legal mechanism through which a free writing prospectus satisfying Rule 433's conditions becomes a Section 10(b) prospectus — satisfying the Section 5(b)(1) requirement that transmitted prospectuses meet Section 10. Rule 405 defines what communications qualify as free writing prospectuses, drawing the boundary between communications subject to Rule 433's conditions and communications that fall within the narrower safe harbours of Rules 134, 135, 137, 138, and 139. Together Rules 164, 405, and 433 constitute the complete free writing prospectus framework.

Rule 163 — the pre-filing free writing prospectus rule for WKSIs — is the companion rule to Rule 433 for the pre-filing period. Where Rule 433 governs free writing prospectuses used after the filing of a registration statement, Rule 163 governs free writing prospectuses used by WKSIs before any registration statement has been filed. The distinction between pre-filing and post-filing communications — and the corresponding applicability of Rule 163 versus Rule 433 — is one of the most commercially significant features of the WKSI communications framework.

Rule 433 also interacts with Rule 175's safe harbour for forward-looking statements. Free writing prospectuses frequently include projections, earnings guidance, and other forward-looking statements about the issuer's anticipated financial performance and business prospects. Where those statements appear in a filing with the Commission — such as a free writing prospectus filed as an exhibit to the registration statement under Rule 433(d) — they fall within the scope of Rule 175's safe harbour conditions, provided the reasonable basis and good faith requirements are satisfied. Where the statements appear in a free writing prospectus that has not been filed, they remain subject to the antifraud provisions but do not benefit from Rule 175's specific safe harbour mechanism.

Rule 433's filing conditions interact with Rule 408's catch-all materiality obligation. Where a free writing prospectus contains material information about the issuer that is not included in the registration statement, Rule 408 may require that information to be included in the registration statement itself — either because its omission would make required registration statement disclosures misleading, or because the information is required by the applicable form regardless of whether it has appeared in a free writing prospectus. Rule 433(a)'s confirmation that free writing prospectuses may include information not in the registration statement does not exempt issuers from the Rule 408 obligation — it simply means that the use of such information in a free writing prospectus does not by itself trigger a registration statement inclusion obligation.

Amendment History and Regulatory Evolution

Rule 433's amendment history reflects the continued refinement of the free writing prospectus framework since its 2005 adoption. The February 2006 technical amendment corrected a drafting error in the rule's original text. The September 2014 amendment addressed the treatment of ABS informational and computational materials in the context of Rule 433's filing conditions, aligning the rule with the broader Regulation AB II rulemaking. The June 2020 amendment integrated Rule 433 with the revised exempt offering framework. The November 2022 and July 2024 amendments addressed the treatment of registered non-variable annuity products — adding new offering categories and adjusting the conditions applicable to free writing prospectuses used in connection with those products.

The May 2026 Registered Offering Reform proposal would extend the free writing prospectus regime of Rule 433 to Exchange Listed Issuers — enabling those issuers to use post-filing free writing prospectuses under the same conditions as issuers currently eligible for Rule 433 benefits at the Form S-3 level. This extension would not change Rule 433's operative conditions but would expand the population of issuers entitled to rely on them, consistent with the proposal's broader goal of democratising access to the offering efficiencies currently concentrated among WKSIs and Form S-3 eligible issuers.

Enforcement Context and SEC Action Patterns

Rule 433 enforcement arises in three primary contexts. The first involves the use of free writing prospectuses by ineligible issuers — particularly blank check companies and shell companies that do not qualify for the free writing prospectus framework — in connection with IPO and SPAC transaction marketing. The 2024 SPAC rulemaking reinforced that SPACs, as blank check companies, are ineligible issuers under Rule 405 and their offering participants cannot rely on Rule 433's free writing prospectus framework for most purposes, with limited exceptions for communications describing only the terms of the offering.

The second enforcement context involves the filing obligation under Rule 433(d) — specifically, failures to timely file free writing prospectuses used in connection with registered offerings. The Division of Corporation Finance reviews registration statement filings for compliance with Rule 433's filing requirements and has identified unintentional filing failures in comment letter reviews, requiring issuers and underwriters to file omitted free writing prospectuses as corrections. Where filing failures are identified as part of broader Section 5 violations — where an offering participant has used a free writing prospectus without satisfying any of Rule 433's conditions — the Division of Enforcement has brought formal actions.

The third enforcement context involves free writing prospectuses containing material misstatements. Because free writing prospectuses are filed as exhibits to registration statements and are deemed part of those statements for Section 7 purposes, materially misleading statements in filed free writing prospectuses are subject to Section 11 liability in addition to the antifraud provisions of Section 17(a). The Commission has emphasised through enforcement actions and guidance that the filing and legend requirements of Rule 433 do not confer any immunity from the antifraud provisions — a free writing prospectus that satisfies every procedural condition of Rule 433 but contains a material misstatement or omission exposes the issuer and signatories to the same liability as a deficient statutory prospectus.

Examination Relevance and Key Takeaways

Rule 433 is examined at the Series 7 and Series 65 levels in the context of the registered offering communications framework and the distinction between statutory prospectuses and free writing prospectuses. Candidates should understand the basic structure of the rule — the conditions under which free writing prospectuses may be used after a registration statement has been filed, the mandatory legend requirement, and the filing obligations applicable to issuers and to other offering participants who distribute free writing prospectuses in a manner reasonably designed to lead to broad unrestricted dissemination. The distinction between WKSI eligibility — permitting free writing prospectus use at any time after filing — and the more restrictive conditions applicable to non-WKSI eligible issuers is consistently examined at the Series 65 level.

The electronic accompaniment condition — satisfied by an active hyperlink to the most recent statutory prospectus in an electronic free writing prospectus — is a frequently examined practical application of Rule 433 in the context of the modern electronic offering process. Candidates should understand that the hyperlink mechanism satisfies the accompaniment condition without requiring physical delivery of the statutory prospectus alongside every free writing prospectus transmission.

The key points to retain are these. Rule 433 establishes the conditions under which post-filing free writing prospectuses may lawfully be used by issuers and offering participants in connection with a registered offering without violating Section 5 of the Securities Act. 

A free writing prospectus satisfying Rule 433's conditions is a Section 10(b) prospectus for Section 5(b)(1) purposes, enabling its transmission to investors during the offering process. WKSIs may use free writing prospectuses after the filing of a registration statement; non-WKSI eligible issuers may do so after filing a registration statement containing a Section 10 prospectus. Every free writing prospectus must carry the mandatory legend directing investors to the EDGAR registration statement. Issuers must file all free writing prospectuses they use; other offering participants must file free writing prospectuses distributed in a manner reasonably designed to lead to broad unrestricted dissemination. 

The accompaniment condition for pre-effective free writing prospectuses is satisfied by an active hyperlink to the statutory prospectus in electronic communications. Ineligible issuers — including blank check companies such as SPACs — are excluded from the Rule 433 framework for most purposes. Rule 433 was last amended July 24, 2024 and no pending rulemaking proposes changes to the rule's operative conditions through June 2026.