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Giant Investments, a family of mutual funds, is introducing a new fund. G iant has recently filed a
registration statement for the new fund with the SEC and is waiting for the SEC to declare the registration
statement effective. While it does so, Giant may:
I. place advertisements in financial publications that announce that a new fund is expected to be available
soon, along with Giant's contact information.
II. mail preliminary prospectuses to existing and prospective clients.
III. mail existing clients who have been pre-screened to determine that the fund's objectives are in line
with their investment objectives with information on the price they can lock in today to purchase the
shares once the registration statement is deemed effective.
A. I, II, and III
B. I and III only
C. I and II only
D. I only
Answer: C
Explanation:
While Giant is waiting for the SEC to declare its registration statement effective, it may
engage only in the activities described in Selections I and II. It may place advertisements in financial
publications that announce that a new fund is expected to be available soon, along with its contact
information-i.e., a tombstone advertisement; and it may mail preliminary prospectuses to existing and
prospective clients. It may not make any offer to sell the securities to clients, prescreened or otherwise,
prior to the effective date of the registration statement.
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