Final Prospectus

What is a Final Prospectus

A final prospectus is the final version of a prospectus for a public offering of securities. This document is complete in all details concerning the offering and is referred to as a "statutory prospectus" or "offering circular."

BREAKING DOWN Final Prospectus

A final prospectus is the primary source for investors when seeking information on a publicly offered investment. Companies are required to file prospectus documents with the Securities and Exchange Commission (SEC) in order to raise capital for the product being offered. A prospectus can be either preliminary or final as the filing process progresses.

The Securities Act of 1933 mandates that all companies seeking to raise capital for new publicly offered products in the U.S. must file a prospectus with the Securities and Exchange Commission. New prospectus filings can be monitored and viewed on the SEC’s website. Management investment companies offering a range of managed investment funds comprise the majority of prospectus filings. A broad range of companies offering various types of alternative investments must file prospectuses also. Some companies and products may be exempt from prospectus fillings, including private offerings to a limited number of persons or institutions; offerings of limited size; intrastate offerings; and securities of municipal, state, and federal governments.

Prospectus Filing Process

With public offerings of securities, investors first receive what is called a preliminary prospectus, commonly called a "red herring" because of the pinkish color of the paper on which it is printed. Subsequently, the final prospectus is made available to investors who are considering a purchase of the security in question. A key difference between a final prospectus and a preliminary prospectus is that the final prospectus contains the security's price.

Management Investment Company Filings

Management investment companies typically do not file preliminary prospectus documents. Thus, most fund prospectuses filed with the SEC by management companies will provide the final details on the fund being offered.

Mutual fund companies can file both a statutory prospectus and a summary prospectus. Both documents will be available for investors with the summary prospectus providing only a brief summary of the fund’s details.

Mutual fund companies are required to include certain information in a mutual fund prospectus. Common details include the fund’s investment objective, investment strategy, risks, fees and expenses, performance, information about the fund’s investment advisers and portfolio managers, and procedures for purchasing and redeeming shares.

Transparency and investor awareness are two key aspects mandated by prospectus legislation. Information in a prospectus must be presented in a standard format for fund comparison. Investors must also receive a copy of a fund’s prospectus after they purchase shares.

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  1. U.S. Securities and Exchange Commission. "Registration Under the Securities Act of 1933." Accessed Nov. 4, 2020.

  2. U.S. Securities and Exchange Commission. "Investor Bulletin: Investing in an IPO." Accessed Nov. 4, 2020.

  3. U.S. Securities and Exchange Commission. "Information Available to Investment Company Shareholders." Accessed Nov. 4, 2020.

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