A free writing prospectus (FWP) is a written communication regarding securities being publicly offered disseminated by the issuer during the waiting period of an initial public offering (IPO) that discloses information that would not be included in the registration statement. Rule 405 of the Securities Act defines a free writing prospectus as any written offer to sell securities made by means other than a final prospectus, a preliminary prospectus, a written communication made in reliance of Rule 167 or Rule 426, or any written communication delivered together with the final prospectus.
Sections 5 and 2(a)(3) of the Securities Act prohibit issuers from making written offers during the waiting period unless the written offer complies with Section 10. Under Rule 164, a free writing prospectus that satisfies the requirements of Rule 433 will be considered a prospectus under Section 10, and therefore an acceptable written offer. In general, to satisfy Rule 433, the free writing prospectus must contain information which is not included in the registration statement but does not conflict with the registration statement. Issuers often use a free writing prospectus when they make changes to their IPO, but their roadshow already began. Additionally, Rule 163 allows well-known seasoned issuers (WKSIs) to make free writing prospectuses during the pre-filing period.
[Last updated in January of 2022 by the Wex Definitions Team]