When issuing securities, which of the following can occur prior to receiving the approval by the SEC of a registration statement? I. oral offer to buy shares
II) written offer to buy shares
III) final determination of the offer price
IV) distribution of a preliminary prospectus

Question

Quizplus · Accepted Answer

According to SEC rules, a preliminary prospectus (also known as a red herring) can be distributed to potential investors prior to SEC approval of a registration statement. Additionally, issuers can make oral offers to buy securities, but written offers cannot be made until the registration statement has been approved by the SEC. The final determination of the offer price cannot be made until after the SEC has approved the registration statement. Therefore, the correct answer is D, as oral offers and distribution of preliminary prospectuses are allowed prior to SEC approval.

When Issuing Securities, Which of the Following Can Occur Prior