RegulationsQuestion 44 of 110
During the cooling-off period for a registered offering, a representative may:
a.Accept payment from customers who commit to buy
b.Send a preliminary prospectus and accept non-binding indications of interest
c.Send research reports praising the issuer to prospective buyers
d.Confirm sales at the anticipated offering price
Explanation
Between filing and effectiveness, the only permitted activities are distributing the preliminary prospectus, or red herring, and gathering indications of interest that bind no one. Taking money, confirming sales, or circulating promotional material would be an illegal offer or sale of an unregistered security. Sales may occur only after the registration is declared effective and the final prospectus is available.
Law Reference: Securities Act of 1933Practice all 110 questions free — no signup required.
Related questions on this topic
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