šŸ“¢ Too many exams? Donā€™t know which one suits you best? Book Your Free Expert šŸ‘‰ call Now!

    Question

    If a company makes an offer of securities beyond the

    one-year validity period of the shelf prospectus, what is required?
    A The company must file a new shelf prospectus Correct Answer Incorrect Answer
    B The company must seek an extension of the existing shelf prospectus. Correct Answer Incorrect Answer
    C The company must only file a notice of offer with the Registrar Correct Answer Incorrect Answer
    D The company can continue using the expired shelf prospectus for the new offer Correct Answer Incorrect Answer
    E The company needs to inform the Securities and Exchange Board but not file a new prospectus Correct Answer Incorrect Answer

    Solution

    Option a is correct because once the one-year validity period of the shelf prospectus has expired, a new shelf prospectus must be filed for any further offers. Section 31.Shelf prospectus: (1) Any class or classes of companies, as theĀ  Securities and Exchange Board may provide by regulations in this behalf, may file a shelf prospectus with theĀ  RegistrarĀ  at the stage of the first offer ofĀ  securitiesĀ  included therein which shall indicate a period not exceeding one year as the period of validity of such prospectus which shall commence from the date of opening of the first offer of securities under that prospectus, and in respect of a second or subsequent offer of such securities issued during the period of validity of that prospectus, no furtherĀ  prospectusĀ  is required.

    Practice Next
    More Financial Management Questions
    ask-question