Investment Company Tombstone Ads
The SEC does allow communications/advertisements about the new offering that include only general information about the offering. Often, this information is presented in a tombstone ad, which is a very basic advertisement that investment bankers place in a newspaper or financial magazine to announce a new securities offer.
Unlike generic advertisements, tombstone advertisements may contain a solicitation for the sale of particular securities. However, they may only be published after an issuer has filed a registration statement that includes a prospectus.
An investment company tombstone ad may not incorporate a fund’s performance data. The information a tombstone ad may convey includes the following items:
- • Factual information about the legal identity and business location of the issuer
- • The title of the securities and the amounts being offered
- • A brief indication of the general type of business of the issuer
- • The price of the security, if known, or the method for its determination
- • A brief description of the intended use of the offering’s proceeds
- • The name, address, phone number, and e-mail address of the sender
- • The type of underwriting and the identities of the underwriters
- • The anticipated schedule for the offering
- • A description of the procedures by which the underwriters will conduct the offering
- • Whether the security is exempt from specified taxes
- • Any legend required by any state l