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Giant Investments, a family of mutual funds, is introducing a new fund. G iant has recently filed a
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I. place advertisements in financial publications that announce that a new fund is expected to be available
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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 and III only
B. I and II only
C. I only
D. I, II, and III
Answer: B
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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