Way Cleared for 3-Day Trade Settlement : Securities: The SEC amends some rules to ensure a smooth transition to the new standard.

The Securities and Exchange Commission on Wednesday eased rules to speed the delivery of offering documents to investors when a shorter three-day trade settlement period goes into effect next month.

At an open meeting, the agency also amended other rules to ensure a smooth transition to the new settlement period.

In October, 1993, the SEC adopted three business days as the standard settlement period for most broker-dealer trades. The standard is to become a mandate on June 7.

The latest action adopts proposals by the Securities Industry Assn. and four leading Wall Street brokerages, which had raised concerns that three-day settlements might not be feasible for many new offerings because of the time needed to print and deliver prospectuses.

Five-day settlement has been the industry norm, although some brokerages already try to meet the newer three-day standard, including CS First Boston Corp., Goldman, Sachs & Co., Lehman Bros. Inc. and Morgan Stanley & Co.

The SEC’s action will allow securities issuers to deliver preliminary prospectus information in several documents and in stages. Brokers are currently required to deliver a final prospectus that has all the data required to be disseminated about an offering.

The SEC will also let issuers rearrange their prospectuses so that pricing information can be printed ahead of other parts of the documents.

However, filings with the SEC concerning offerings will continue to be required.

Any supplemental information provided to investors must be clearly marked as prospectus supplements, with all disclosures written clearly, concisely and without deviation from any preliminary prospectus, SEC Chairman Arthur Levitt Jr. said.

As part of its action, the SEC also amended rules that will:

* Extend the period within which an offering may be priced, to 15 days from five.

* Permit the registration of an increase of not more than 20% of an offering through an abbreviated registration statement that becomes effective upon filing.

* Allow the filing of the shortened statements by fax or through the agency’s EDGAR electronic filing system from 5:30 p.m. to 10 p.m.

* Eliminate the exemption from three-day settlements for firm commitment offerings--in which brokers purchase shares outright from issuers for sale to the public--that the SEC allowed when it made the new settlement cycle standard.

* Permit trades in offerings priced after the market closes to settle on the fourth day after the trade date.

* Allow the managing underwriter and the issuer to agree to an alternate time frame, without specific time limits or conditions, for settling a firm commitment offering.

The SEC said it will also make available a free brochure containing answers to common questions raised by investors on the new settlement rules. The brochure may be obtained by calling (800) SEC-0330.