DEFINITION of 'Deficiency Letter'

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.

BREAKING DOWN '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.

RELATED TERMS
  1. Deficiency

    Conceptually, the numerical difference between the amount of ...
  2. Asset Deficiency

    A situation where a company's liabilities exceed its assets. ...
  3. Deficiency Balance

    The amount owed to a creditor if the sale proceeds from the collateral ...
  4. Deficiency Agreement

    An arrangement in which a party provides a firm with funds to ...
  5. Letter Security

    A security that is not registered with the SEC, and therefore ...
  6. Confirmed Letter Of Credit

    A second guarantee, in addition to a letter of credit, that commits ...
Related Articles
  1. Managing Wealth

    Letter Of Instruction - Don't Leave Life Without It

    This simple document can take the guesswork and headache out of settling your estate.
  2. Investing

    Financial Analyst Cover Letters That Get You Hired

    Crafting a strong cover letter for a job can increase your chances of standing out from the crowd and landing an interview. Some techniques that help.
  3. Small Business

    Letter of Credit

    A letter of credit is a document from a bank promising to pay the holder a certain amount if the holder fulfills certain obligations. Sellers in commercial transactions often require buyers to ...
  4. Investing

    What's a Prospectus?

    The Security and Exchange Commission (SEC) requires that any company raising money from potential investors through the sale of securities must file a prospectus with the SEC and then provide ...
  5. Financial Advisor

    Your Advisor and Myths of International Investing

    Wall Street touts diversification and improving portfolios via investing in international equities. But do we know the whole story they're selling?
  6. Personal Finance

    7 Cover Letter Blunders

    Your resume might be stellar, but if your cover letter is a mess, that resume is likely to go straight into the trash unread.
  7. Managing Wealth

    Don't Be Without A Letter Of Intent

    If you don't have a letter of intent in your desk, write one now. Here's why – and what should be in it.
  8. Insights

    Hilary Clinton Sends Letters to FTC and FDA Asking for Drug Inquiry

    Today, Presidential Candidate Hillary Clinton released letters to both the FDA and FTC asking each agency to take action in response to drug price increases, specifically addressing Turing Pharmaceuticals's ...
  9. Investing

    Why Contrarian Investing Is Not Very Smart

    Like most allegedly sure-fire methods in the investment industry, this one has its flaws too.
RELATED FAQS
  1. When is it necessary to get a letter of credit?

    Capitalize on assets and negate risks by using a letter of credit. Letters of credit are often requested for buying, selling ... Read Answer >>
  2. What are the different types of letters of credit?

    Learn more about the different types of letters of credit that are used to facilitate exchanges between parties that might ... Read Answer >>
  3. When do I need a letter of credit?

    Learn more about the function of a letter of credit for both the buyer and the seller, and get some examples showing when ... Read Answer >>
  4. Can entities other than banks issue letters of credit?

    Obtaining a letter of credit from a non-bank is legally acceptable according to the ICC, but companies tend to prefer to ... Read Answer >>
  5. When are you legally required to get a letter of credit?

    Learn how exporters or importers who deal in international trade use letters of credit to ensure that transactions are safe, ... Read Answer >>
  6. What content does a letter intent have to have?

    Review some of the standard language that ought to be included in a letter of intent between two parties in a business transaction. Read Answer >>
Trading Center