Primary Market
During the cooling-off period, which of the following is permitted?
During the cooling-off period, oral offers and indications of interest (non-binding) are permitted. The preliminary prospectus (red herring) can be distributed. However, no sales, orders, or payments can be accepted unti
Complete Analysis & Legal Rationale
During the cooling-off period, oral offers and indications of interest (non-binding) are permitted. The preliminary prospectus (red herring) can be distributed. However, no sales, orders, or payments can be accepted until the registration becomes effective.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Primary offering registration/prospectus framework and exemptions (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.