Prospectus_Flashcards (1)
What is the definition of a prospectus?
A document issued as a prospectus including any notice, circular, advertisement, or invitation offering securities to the public.
What is the purpose of a prospectus?
- Provides information to the public.
- Helps investors decide whether to invest in the company.
When can a prospectus be issued?
Any time after incorporation but before the expiry of the prospectus.
What is a shelf prospectus?
A single offering document allowing multiple offerings within a prescribed time and conditions.
What is a supplement to a shelf prospectus?
Issued when there are changes in disclosures or information in the shelf prospectus.
Who can approve a prospectus?
- Approved by the Commission.
- Cleared by the stock exchange where securities are listed.
What are exceptions to the approval requirement for a prospectus?
- Securities by the State Bank of Pakistan.
- Private offerings or placements.
- Shares issued as specie dividends.
- Securities for members or employees.
- Bonus shares.
What is the validity of an approved prospectus?
- Valid for 60 days from approval.
- Shelf prospectus may have extended validity.
What are the filing requirements for a prospectus?
- File a copy with the Registrar on or before publication.
- Signed by all directors or proposed directors.
What content must a prospectus include?
Must include prescribed information and reports as per Public Offering Regulations, 2017.
What is the purpose of listing risk factors in a prospectus?
- Highlights potential risks.
- Ensures investors are aware before making decisions.
What are the publication requirements for a prospectus in newspapers?
- Publish in full or abridged form.
- In one Urdu and one English newspaper.
- Between 7-30 days before public subscription.
Where must copies of the prospectus be made available?
- Registered office of the issuer.
- Securities exchanges.
- Bankers to the issue.
- Share registrar, balloter, and credit rating agency.
What are the requirements for uploading a prospectus on a website?
- Upload full text and subscription form on the website.
- Available from publication to closing of subscription.
What are the restrictions on advertisements announcing public offers?
- Prospectus must be published.
- Advertisement must provide an address to obtain the prospectus.
Can the terms of a prospectus be varied after publication?
Terms cannot be varied without Commission approval.
Who is considered an expert in a prospectus?
Includes banker, securities advisor, engineer, valuer, accountant, lawyer, or other professionals.
What are the conditions for including an expert’s statement in a prospectus?
- Expert must be independent.
- Must give written consent to include their statement.
3.The expert is not, and has not been, engaged in the formation, promotion, or
management of the company
What are the offences related to misstatements in a prospectus?
- Misleading, incorrect, or untrue statements.
- Omission of required information.
What is the compensation process for a false or misleading prospectus?
- File suit for losses due to reliance on the prospectus.
- Sue issuer, directors, or signatories.
What is the minimum subscription in a prospectus?
Amount specified in the company’s memorandum or entire share capital if not specified.
Which companies must obtain a certificate of commencement of business?
- Public companies with share capital.
- Private companies converted to public within one year.
What conditions must be fulfilled to obtain a certificate of commencement of business?
- Shares allotted for minimum subscription.
- Directors pay full amount for their shares.
- No repayment liability to applicants.
- Verified declaration filed with the Registrar.
What is the status of contracts made before obtaining the certificate of commencement of business?
- Provisional and non-binding before the certificate is obtained.
- Becomes binding once the certificate is issued.
