The firm issued about $36 billion of investment products after registering with U.S. regulators in August 2019 to sell up to $20.8 billion, according to a statement Monday. The error will require the firm to repurchase affected securities — a so-called rescission offer — at their original price.
Major banks typically file for blanket registrations that allow them to regularly issue notes that give clients a chance to bet on everything from market volatility to the performance of Tesla Inc. shares. Market observers couldn’t recall a bank’s issuance exceeding the amount it registered, let alone blowing billions past its limit.
A shelf registration is an agreement with regulators to allow finance firms to issue securities without applying for approval each time. It allows for a series of issuances without requiring further prospectuses to be filed.