Section 830-X-4-.03 - Content And Form Of Prospectus (Alabama Administrative Code)

§ 830-X-4-.03. Content And Form Of Prospectus

(1) The prospectus must contain information to provide full disclosure of financial and other information about the company and/or its securities which would enable a prudent individual to make an informed and realistic evaluation of the worth of the company and/or of the securities offered.

(2) Exhibit Form 1 to the Commission Application Form RQ provides the type of information that must be contained in a prospectus of a General Issue. For other types of issues, such as, but not limited to, Real Estate Programs and Oil and Gas Programs, form and guidelines as to disclosure provided by the Securities and Exchange Commission and the North American Securities Administrators Association, or its successor, will be acceptable to the Commission.

(3) The information required in a prospectus shall not be set forth in such fashion as to obscure any of the required information or any information necessary to keep the required information from being incomplete or misleading.

(4) All information contained in a prospectus shall be set forth under appropriate captions or headings reasonably indicative of the principal subject matter set forth thereunder. Except as to financial statements and other tabular data, all information set forth in a prospectus shall be divided into reasonably short paragraphs or sections.

(5) Every prospectus shall include a reasonably detailed table of contents showing the subject matter of the various sections or subdivisions of the prospectus and the page number on which each such section or subdivision begins.

(6) Except as to financial statements and information required in tabular form, the information set forth in a prospectus may be expressed in condensed or summarized form.

(7) Illustrations and comparative graphs to make comparisons with other companies or that incorporate projected data concerning any subject matter may not be used in a prospectus to be filed with any application for registration of securities unless the same are necessary to a full disclosure of material facts to enable an investor to make an informed judgement of the offering.

(8) Graphs or charts used in addition to the textual description to illustrate the dilution of the investors's equity, the difference of the public offering price and price paid by promoters and insiders, the percentage of equity purchased by the public investor and the percentage purchased by the insiders and/or the use of the proceeds from the offering will be acceptable to the Commission.

(9) Photographic reproductions of principal properties or important products in prospectuses are permissible where they do not create a misleading impression.

(10) Accurate maps or surveys, established corporation symbols or trademarks are permissible where they do not create a misleading impression.

(11) The prospectus may be printed, mimeographed, lithographed, or typewritten or prepared by any similar process which will result in clearly legible copies. If printed, it shall be set in Roman type at least as large as ten-point modern type, except that financial statement and other statistical or tabular matter may be set in Roman type at least as large as eight-point modern type. All type shall be leaded at least two points.

(12) When an offering of securities is being made in this state under an order of registration and the offering is also being made pursuant to a registration statement effective with the Securities and Exchange Commission or a Regulation A exemption under the provisions of the Securities Act of 1933, the prospectus submitted with the registration statement or the offering circular submitted with the Regulation A Notification to the appropriate SEC office may be used in this state instead of the prospectus required by the Securities Commission's rules.

Author:

(Filed September 30, 1982. Readopted: Filed November 9, 1983. Amended: Filed September 28, 1990.)

Statutory Authority: Code of Ala. 1975, § 8-6-23.

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