Series 82: Prospectus

Prospectus

When most of us think of a prospectus, we think of a long, detailed document. In fact, a prospectus is any written or broadcast offer to sell securities. It can be as short or as long as you like. What defines a prospectus is its contents. Section 2 of the Securities Act gives the following broad definition of prospectus:

Any notice, circular, advertisement, letter, or communication, written or broadcast, which offers a security for sale or confirms the sale of any security.

Thus, any written or broadcast communication that contains an offer to sell securities, explicitly or implicitly, is a prospectus.

Two kinds of prospectuses (offers to sell securities) are critical to a public offering. A