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

Related Articles
  1. 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 ...
  2. Investing

    An Insight on the Prospectus of Corporate Bonds

    Making a well-informed decision with respect to buying a corporate bond involves reading the significant facts and details of the prospectus document.
  3. Investing

    Digging Deeper: The Mutual Fund Prospectus

    The legal jargon of this document can be daunting. Find out how to get to the important stuff.
  4. Investing

    The Issuance Procedure of High-Yield Bonds

    The issuance of corporate high-yield bonds can have several advantages over equity. A closer look.
  5. Investing

    Prepping for Canada Goose's First Public Earnings Report

    The first earnings report after an IPO provides lots of insight into newly public companies.
  6. Investing

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  7. Insights

    What are the Pink Sheets?

    Pink Sheets is a listing of over-the-counter stocks that are not listed on any established exchange such as the New York Stock Exchange or the NASDAQ.
  8. Insurance

    5 Tips For Investing In IPOs

    It’s not easy to profit from IPO​s, but the money is there.
  9. Personal Finance

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  10. Investing

    The Advantages and Disadvantages of Mutual Funds

    As with most investments, mutual funds have both advantages and disadvantages.
Frequently Asked Questions
  1. Do interest rates increase during a recession?

    Learn why interest rates do not rise in a recession; in fact, the opposite happens. Identify the factors that reduce interest ...
  2. What is the difference between deflation and disinflation?

    Learn what deflation and disinflation are, how supply and demand affect price levels, and the difference between deflation ...
  3. What rights do all common shareholders have?

    Learn what rights all common shareholders have, and understand the remedies that can be taken if those rights are violated ...
  4. What does CHIPS UID mean?

    Learn what CHIPS UID stands for and how it facilitates the transfer of funds as the back-end of the ACH network for both ...
Trading Center