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| Final Prospectus |
The final prospectus is the revised version of the preliminary prospectus (also called a red herring in the United States or a pathfinder prospectus in the United Kingdom), which a company that wants to sell its securities for the first time to public investors files with the appropriate regulatory authority such as the Securities and Exchange Commission (SEC) in the United States or the Financial Service Authority in the United Kingdom.
The final prospectus is prepared after the regulatory authorities have verified that the information contained in the preliminary prospectus is adequate and complies with the relevant securities laws and stock exchange regulations.
Generally, the regulatory authority may ask for additional information or further explanation to be provided in the final prospectus than what appeared in the preliminary prospectus. The regulatory authorities do not, however, guarantee either the accuracy or completeness of the final prospectus.
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The contents of the final prospectus may also reflect any clarifications deemed necessary as a result of the presentations, known as road shows, to investors. The final prospectus is the legal basis on which the securities in an initial public offering are sold.
Aggrieved persons in a new issue of securities can take legal action against the issuing company and its advisers for misrepresentations and false statements that appear in the final prospectus. The final prospectus, unlike the preliminary prospectus, must contain the final pricing information.
