shelf registration investment & finance definition

The process of a company registering with the Securities and Exchange Commission (SEC) to sell shares or debt to the public at an undetermined time during the next two years. Shelf registrations are allowed under SEC Rule 415, which was passed initially in March 1982 and approved on a permanent basis in November 1983. A shelf registration gives a company a maximum amount of flexibility to be able to tap the capital markets whenever conditions are most favorable. Shelf registrations have gained in popularity in recent years with diminishing fears that a shelf registration will create an overhang on the market price of a company’s stock. Overhangs exist when investors are concerned that additional stock shares coming onto the market will depress the price of the shares of stock that they own.