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    Question

    Which of the following is true relating to Red- herring

    Prospectus? a.         It is issued prior to the issue of a prospectus  b.         It shall carry the same obligations as are applicable to a prospectus c.         It shall be filed with the Registrar at least three days prior to the opening of the subscription list and the offer
    A A and B Correct Answer Incorrect Answer
    B A only Correct Answer Incorrect Answer
    C B and C Correct Answer Incorrect Answer
    D A, B and C. Correct Answer Incorrect Answer

    Solution

    Section 32. Red herring prospectus: (1) A company proposing to make an offer of securities may issue a red herring prospectus prior to the issue of a prospectus; (2) A company proposing to issue a red herring prospectus under sub-section (1) shall file it with the  Registrar  at least three days prior to the opening of the subscription list and the offer; (3) A red herring prospectus shall carry the same obligations as are applicable to a prospectus and any variation between the red herring prospectus and a prospectus shall be highlighted as variations in the prospectus.

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