A:

A. It is a summary of the registration statement.

B. A preliminary version is often called a "red herring".

C. It provides information about the issuing company, its management and the securities to be offered.

D. It is made public shortly after it is submitted to the FINRA and posted to its website.


Correct answer: D
The prospectus is actually submitted to the Securities and Exchange Commission (SEC). The SEC is responsible for ensuring fairness for the individual investor and FINRA is responsible for overseeing virtually all U.S. stockbrokers and brokerage firms. In the grand scheme of things, FINRA is overseen by the SEC.

RELATED FAQS
  1. How are asset management firms regulated?

    Find out how the asset management industry is regulated and how those regulations fit within the broader scope of financial ... Read Answer >>
  2. I want to start my own brokerage company, how do I become a member of FINRA?

    Before you read on, note that the Financial Industry Regulatory Authority (FINRA), (previously the National Association of ... Read Answer >>
  3. What is the difference between a prospectus and summary prospectus?

    Learn about the differences between the summary prospectus and statutory, or full, prospectus, and discover what mutual fund ... Read Answer >>
  4. I need special accommodations when taking the Series 63 exam. How are such arrangements ...

    Learn more about special accommodations offered by Series 63 testing sites, and discover how to request special accommodations ... Read Answer >>
  5. If my employment with my current firm terminates relatively soon, do I have two years ...

    Yes. When your employment ends with the current firm, your registration with the Financial Industry Regulatory Authority ... Read Answer >>
  6. What is the Central Registration Depository?

    The Central Registration Depository (CRD®) is an automated database used by FINRA and NASAA to store and maintain historical ... Read Answer >>
Related Articles
  1. Financial Advisor

    SEC's CARDS Plan Creates Controversy for Brokers

    The securities industry isn't happy with the hand it may be dealt with the SEC's proposed CARDS rules.
  2. Insights

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  3. Investing

    What's a Prospectus?

    The Security and Exchange Commission (SEC) requires that any company raising money from potential investors through the sale of securities must file a prospectus with the SEC and then provide ...
  4. Financial Advisor

    Investigating The Securities Police

    Learn about the history of FINRA and how this organization protects investors.
  5. Financial Advisor

    Steps to Starting Up an Independent Broker Dealer

    Launching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
  6. Financial Advisor

    The Issuance Procedure of Corporate High-yield Bonds

    Issuing debt over equity can have several advantages for companies. Here we have a detailed look on the issuance procedure of corporate high-yield bonds.
  7. Insights

    Understanding the SEC

    The SEC's triple mandate of investor protection, maintenance of orderly markets and facilitation of capital formation makes it a vital player in capital markets.
  8. Financial Advisor

    Expect FINRA to Ask These Culture Questions

    This month, FINRA kicks off its culture examinations for brokerage firms. Here's how to cram for the test.
  9. Personal Finance

    How to Evaluate Financial Advisors Via BrokerCheck

    Many people research restaurants or movies, but few select brokers or financial advisors with much due diligence. Here's how BrokerCheck can help.
  10. Investing

    Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.
RELATED TERMS
  1. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association ...
  2. SEC Form S-20

    A filing with the Securities and Exchange Commission (SEC), more ...
  3. Final Prospectus

    1. The final version of a prospectus for a public offering of ...
  4. SEC Form 10

    A filing with the Securities and Exchange Commission (SEC), also ...
  5. SEC Form BD

    A form that is completed and submitted to the Securities and ...
  6. SEC Form 424A

    The prospectus form that a company must file if it has made significant ...
Hot Definitions
  1. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  2. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
  3. Portable Alpha

    A strategy in which portfolio managers separate alpha from beta by investing in securities that differ from the market index ...
  4. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  5. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  6. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
Trading Center