conceptSM_ch20 - CONCEPT QUESTIONS CHAPTER 20 20.2 What are...

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CONCEPT QUESTIONS - CHAPTER 20 20.2 What are the basic procedures in selling a new issue? 1. Obtain approval of the Board of Directors. 2. File a preliminary prospectus with the OSC. 3. Distribute prospectus to potential investors. 4. Determine offer price once the final prospectus is approved. 5. Place tombstone advertisements. What is a preliminary prospects? A document filed with the OSC containing information relevant to the offering. What is the POP system and MJDS and what advantages does it offer? The Prompt Offering Prospectus (POP), introduced by the OSC in 1983, is a streamlined reporting and registration system for large companies that issue securities regularly. Because the OSC has an extensive file of information on these companies, only a short prospectus is required when securities are issued. In the early 1990s, securities regulators in Canada and the SEC in the U.S. introduced a Multi-Jurisdictional Disclosure System (MJDS). Under MJDS, large issuers in the two countries are allowed to issue securities in both countries under disclosure documents satisfactory to regulators in the home country.
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