Requirements for a RELP Prospectus
The prospectus for a registered offering of interests in a RELP must follow very specific requirements. We will go into some detail about the information required for the cover page, and then highlight some of the major points from the other requirements.
Along with the basic information expected on any prospectus’s cover page—such as the name of the DPP and sponsor, and the number of securities—the closing date of the offering must be stated, as well as the minimum required purchase and a brief description of any escrow arrangements. Significant risk factors should be briefly identified. A small table stating the offering price, minimum funding for the RELP to commence operations, and maximum funding sought must also be included. It should be no more or less complicated than this:
|
Price to Public |
Selling Commissions |
Partnership Proceeds |
|
|
Per Limited Partnership Interest |
$1,000 |
$70 |
$930 |
|
Total Minimum |
$1,000,000 |
$70,000 |
$930,000 |
|
Total Maximum |
$5,000,000 |
$350,000 |
$4,650,000 |
The next page after the cover page must describe the suitability standards investors must meet and the methods that will be used to verify that dealers are only selling to investors who meet these standards. An explanation of the reasons behind the suitability standards must also be included.
The prospectus must then describe the partnership’s characteristics. The summary must include contact information for the general partners and any other decision-makers with regard to the RELP’s investment decisions. The RELP’s i