Series 79: Delivery Of A Prospectus (Rule 172)

Delivery of a Prospectus (Rule 172)

After a registration statement becomes effective, Section 5(b)(1) of the Securities Act makes it unlawful to transmit any prospectus that is not a final prospectus; meanwhile, Section 5(b)(2) requires that delivery of the security must be accompanied or preceded by a final prospectus. Rule 172 modifies both of these requirements.

First, Rule 172 exempts from the no-non-final-prospectus requirement of Section 5(b)(1) two categories of communications: (1) written confirmations of sales of securities, as long as they contain only information customarily included in confirmations, and (2) notices of allocation of securities sold, provided certain conditions are met.

Second, Rule 172