What happens when the SEC declares a registration statement effective?

When the SEC declares a registration statement effective, it signifies the conclusion of the cooling-off period that precedes the effectiveness of a registered offering. During this cooling-off period, which typically lasts 20 days, the issuer cannot conduct sales of the securities being registered, but can communicate with potential investors to gauge interest and finalize details. Once the SEC's declaration of effectiveness occurs, the issuer can proceed with the public offering, allowing the sale of the securities to take place.

This marks a critical transition in the process of bringing securities to market, as it indicates regulatory approval and readiness for investors to purchase the registered securities. The other choices do not accurately represent the implications of an effective registration statement; for example, a registration statement does not get withdrawn upon effectiveness, and there is no requirement to wait an additional 30 days. Additionally, while securities may be traded following an effective registration, this statement specifically pertains to the initiation of primary sales rather than unrestricted trading.