DEFINITION of 'Effective Date'
The date, declared by the Securities & Exchange Commission (SEC), on which shares can start trading. This usually refers to the date when shares become available for sale in an initial public offering.
BREAKING DOWN 'Effective Date'
The effective date occurs approximately 20 days after the security is registered with the SEC, giving time for the SEC to review the registration. The registration will be either accepted or rejected by the twentieth day or earlier. Amendments can be made to the registration if the SEC deems that changes are necessary. If the items in question are not modified, the registration process is not completed.