Ch 2 Deck 6 Flashcards

1
Q

A prospectus is a sales document but also must provide

A

accurate and complete information - Everything that an investor needs to know to make an informed choice.

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2
Q

Section 2 of Securities Act of 1933 gives a general definition of prospectus

A

Any written or broadcast offer to sell securities is considered a prospectus

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3
Q

Any written offer to sell or solicitation of an offer to buy the securities in an offering that is used after a registration statement is filed

A

Free writing prospectus

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4
Q

FWP can be used before registration is filed only by

A

WKSI’s

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5
Q

For FWP’s, “Written” offer includes

A

scripted offer, i.e.

  • broadcast on TV
  • roadshow presentation slides
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6
Q

FWP may include info not

A

in final prospectus

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7
Q

FWP may not disagree with

A

info in final prospectus

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8
Q

FWP must include legend saying

A
  • registration statement has been filed

- place that they can obtain a copy of the preliminary prospectus

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9
Q

FWP must be filed with the SEC no later than

A

first use

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10
Q

FWP doesn’t need to be filed if

A

no substantive changes

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11
Q

Preliminary prospectus is also called

A

red herring

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12
Q

Preliminary prospectus is used during the time

A

between the filing of the registration statement and the effective date

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13
Q

Preliminary prospectus is reviewed by

A

SEC

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14
Q

When reviewing the preliminary prospectus SEC will issue a stop order if

A

it finds that the registration statement contains material omissions or misleading information

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15
Q

If the SEC issues a stop order after reviewing a red herring, it suspends the process until

A

a rewrite is done and the amendment is filed

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16
Q

If the SEC believes there has been insufficient disclosure in the registration statement, then

A

the issuer will receive a deficiency letter and the SEC will require an amendment

17
Q

if SEC requests no changes registration becomes effective

A

after 20 days

18
Q

Preliminary prospectus legend must be

A

on front cover in red

19
Q

Preliminary prospectus has all the same information as final except

A

doesn’t contain offering price

20
Q

Price is generally put in prospectus

A

right before the offering

21
Q

Must file how many copies of preliminary prospectus with SEC

22
Q

Final prospectus is used to

A
  • register the security

- as a disclosure document for investors

23
Q

Must file how many copies of final prospectus with SEC

24
Q

Instructions for Narrative Disclosure in final prospectus found in

A

Regulation S-K

25
Instructions for Financial Information found in
Regulation S-K
26
SEC rule 405 defines a written communication as
Any communication that is "written, printed, a radio or television broadcast, or a graphic communication"
27
SEC rule 405 includes in a graphic communication
Need to know All forms of electronic media, including, but not limited to, audiotapes, video tapes, facsimiles, CD-ROM, Electronic mail, Internet websites, substantially similar messages widely distributed (rather than individually distributed) on telephone answering or voicemail systems, Computers, computer networks and other forms of computer data compilation."
28
Does red herring legend need to be red?
Traditionally is, but doesn't have to be
29
prelimary prospectus is carried on
road show
30
Instructions for Financial Information is found in
Regulation S-X
31
An FWP must be in what form?
Written form
32
An FWP is a written offer to what
Sell or buy securities in an offering
33
An FWP can only be used after
a registration statement is filed (only WKSI's can use before)
34
Who can use FWP's before a registration statement is filed
WKSI's