During the Cooling Off Period, which activity is allowed?

• A. Indication of interest can be solicited with a red herring
• B. Solicitation of sales to the public
• C. Final purchase agreements can be executed
• D. Issuers may publicly advertise the offering

Answer: (A)

During the cooling-off period the registration statement has been filed but is not yet effective, so broad public marketing isn’t permitted. The allowed activity is for underwriters to seek indications of interest using a red-herring, a preliminary prospectus that omits the final price and size. This helps gauge demand without actually selling or finalizing terms. Public solicitation of sales, final purchase agreements, or public advertising would cross into prohibited activity during this period.