Capital MarketsQuestion 354 of 398
During the cooling-off period, a registered representative may lawfully do which of the following with a prospective investor?
a.Accept payment and finalize a sale of the new shares
b.Send the investor the final prospectus
c.Guarantee the investor an allocation of shares
d.Send a preliminary prospectus and accept a non-binding indication of interest
Explanation
During the cooling-off period, no sales may be completed and no money may be accepted, but a representative may distribute a preliminary prospectus (red herring) and take non-binding indications of interest. Actual sales can occur only after the registration becomes effective.
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