What is an Offer to Sell Securities?
Sale of Securities
Written by Jason Gordon
Updated at September 25th, 2021
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Table of Contents
What is an offer to sell securities?Discussion QuestionPractice QuestionAcademic ResearchWhat is an offer to sell securities?
The 33 Act specifically regulates any offer to sell securities. The term offer is defined very broadly under the 33 Act as any attempt to solicit interest in buying shares. The definition of an offer to sell securities goes far beyond actually attempting to sell securities. As such, securities law regulates a much wider range of conduct than many people anticipate.
Note: Even if the communicator includes disclaimers or provisions stating that the information is not an offer and that the recipient cannot purchase securities at this time, the communication may still be considered an offer.
Example: Under this definition, direct mail or advertisement of any sort would constitute an offer. Posting information about a securities offering on a website would be considered a solicitation of offers. Further, any communication that discloses information about the decision to sell securities, depending upon the context, may be considered an offer.
Next Article: Who is Regulated in a Securities Issuance? Back to: SECURITIES LAW
Related Topics
- Securities Act of 1933
- What is an Offer to Sell securities?
- Who are the parties regulated in an offer to sell securities?
- What are the primary disclosure documents required in an offer to sell securities?
- Red Herring Prospectus (Securities) Definition
- Registration of Securities
- What is an issuer allowed to do at each stage of the registration process?
- How are issuers classified for purposes of the registration and offering process?
- What is an issuer allowed to do during the Pre-filing Period?
- What are the limitations on the issuer during the Post-filing, Waiting Period?
- What is an issuer allowed to do during the Post-Effective Period?
- What is an Emerging-Growth Company?
- What type of information must an issuer disclose?
- What laws govern the mechanics of disclosure in a securities offering?
- Deficiency Letter (Securities Law)
Discussion Question
Why do you think an offer to sell securities is defined so broadly? Do you think it is appropriate or overly broad? Why?
Practice Question
ABC Corp is considering raising money for operations by selling bonds to the public. ABC Corp wants to gauge public interest, and posts an announcement on a popular investment website stating the ABC Corp will be selling bonds at the end of the year. Does this activity implicate the securities laws?