Prospectus To Be Provided To Aftermarket Purchasers

Certain investors who purchase securities in the secondary market just after a distribution must also be provided with the final prospectus. The term for which a prospectus must be provided depends largely on the type of offering and where the issue will be traded in the after market. If the security has an after market delivery requirement a prospectus must be provided by all firms that execute a purchase order for the security during the term.  The prospectus delivery requirements are as follows:

  • For IPOs: 90 days after being issued for securities quoted on the OTCBB or in the pink sheets, 25 days for listed or NASDAQ securities
  • Additional offerings: 40 days for securities quoted on the OTCBB or in the pink sheets. No after market requirement for listed or NASDAQ securities

SEC Disclaimer

The SEC reviews the issuer’s registration statement and the prospectus but does not guarantee the accuracy or adequacy of the information.  The SEC disclaimer must appear on the cover of all prospectuses and states: “These securities have not been approved or disapproved by the SEC nor have any representations been made about the accuracy of the adequacy of the information.”

 

FREERIDING AND WITHHOLDING/FINRA RULE 5130

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