Regulations & ConductQuestion 107 of 125
During the cooling-off period of a registered offering, a broker-dealer may:
a.Sell the securities to customers
b.Accept binding purchase orders and payment
c.Collect non-binding indications of interest
d.Guarantee the offering price
Explanation
During the cooling-off period (after the registration statement is filed but before it is effective), sales and binding orders are prohibited. Firms may distribute a preliminary prospectus (red herring) and gather non-binding indications of interest, but no money or binding commitments may be accepted until the registration is effective.
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Related questions on this topic
- The primary purpose of the Securities Act of 1933 is to:
- A preliminary prospectus (red herring) used before a registration is effective:
- In a firm commitment underwriting, the underwriter:
- A private placement conducted under Regulation D of the Securities Act of 1933 is:
- The Securities Exchange Act of 1934 is best known for:
- Trading securities on the basis of material, nonpublic information is prohibited as:
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