Deficiency Letter

What Does Deficiency Letter Mean?
A letter, issued by the Securities and Exchange Commission (SEC) indicating a significant deficiency or omission in a registered statement or prospectus. A deficiency letter should be dealt with promptly, and the SEC should be alerted of any actions taken to remedy the situation.

Investopedia explains Deficiency Letter
When issuing securities, a deficiency letter will usually disrupt the process. The letter will often halt the registration process, postponing the date of the issue. This prevents a company from receiving funds at an expected date. Furthermore, a stop order may be issued along with the deficiency letter. This will prevent any sale of the securities in the issue until the deficiency is handled.