Question

"A brokerage research department has been following the common stock of Acme Corporation and has prepared a favorable research report on the company. The brokerage firm is a member of a syndicate handling an issue of Acme common stock that is currently in registration. A registered representative wishes to send the research report to all of his customers. Which statement is TRUE?"

Answer 1

Complete question reads;

"A brokerage research department has been following the common stock of Acme Corporation and has prepared a favorable research report on the company. The brokerage firm is a member of a syndicate handling an issue of Acme common stock that is currently in registration. A registered representative wishes to send the research report to all of his customers. Which statement is TRUE?"

A. The report can be sent only if it has been approved by a supervisory analyst

B. The report can be sent only if it is accompanied or proceeded by, a preliminary prospectus.

C. The report can be sent only if it has been approved by the branch office.

D. The report cannot be sent until registration is effective.

Answer:

D. The report cannot be sent until registration is effective.

Explanation:

Usually, under the guidelines of the Securities Act of 1933, no offer can be made to the customer unless a final registration has been made and effected by means of a prospectus.

Thus, the report cannot be sent until registration is effective..