Which statement best defines a prospectus?

• A. Any notice, circular, letter or communication, written or broadcast by radio or television that offers any security for sale or confirms the sale of a security
• B. A document filed with the securities regulator that schedules underwriting
• C. A marketing brochure used only after a sale is completed
• D. A contract between issuer and underwriter for services

Answer: (A)

A prospectus is the disclosure document used in securities offerings to inform investors about the security and the issuer, including essential details and risks. The statement that best defines a prospectus captures the broad reach regulators assign to the term: it includes any notice, circular, letter, or communication, in any medium, that offers any security for sale or confirms the sale of a security. That means advertising, mailings, or broadcasts that are used to solicit offers or to confirm that a sale is taking place fit the definition, not just a formal written filing.

The other descriptions miss key aspects. A document filed with the securities regulator that schedules underwriting is related to the offering process but isn’t itself the prospectus; it’s more of a regulatory filing or agreement. A marketing brochure used only after a sale is completed isn’t a prospectus because the prospectus is tied to informing investors about the offering itself, typically before or during the sale. A contract between issuer and underwriter for services is an underwriting agreement, not a prospectus.