Securities RegistrationQuestion 51 of 100
A small issuer registers a stock offering by qualification. The Administrator is concerned that the business plan cannot be carried out unless a substantial portion of the offering is sold. The Administrator may:
a.Prohibit the offering outright without a hearing
b.Guarantee the offering by state funds
c.Require as a condition of registration that the proceeds be impounded in escrow until a specified amount is received
d.Require the underwriter to purchase any unsold shares
Explanation
The act lets the Administrator condition an effective registration on impounding the proceeds until the issuer receives a specified minimum amount, protecting investors in an undersubscribed deal. Escrow of proceeds is a condition, not an outright prohibition, and a denial would require notice and an opportunity for hearing. No state guarantees offerings, and the Administrator cannot force an underwriter into a firm commitment.
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