Question: Section 2(a)(10) of the Securities Act sets forth the definition of “prospectus.” Clause (a) of Section 2(a)(10) provides an exception from the definition of “prospectus” for a communication that is sent or given after the effective date of the registration statement if “it is proved that prior to or at the same time with such communication a written prospectus meeting the requirements of subsection (a) of Section 10 at the time of such communication was sent or given to the person to whom the communication was made.” Is Rule 172 available to satisfy the condition to the exception in clause (a) of Section 2(a)(10) that the Section 10(a) prospectus be “sent or given to the person to whom the communication was made”?

Answer: No. Rule 172 provides that a final Section 10(a) prospectus will be deemed to precede or accompany the carrying or delivery of a security for sale for purposes of Securities Act Section 5(b)(2) and provides a conditional exemption from Securities Act Section 5(b)(1) for written confirmations and notices of allocations. Rule 172 does not provide a means to satisfy the “sent or given” language in clause (a) of Section 2(a)(10). As the Commission stated in Securities Act Release No. 8591 (Jul. 19, 2005), in footnote 561, “a final prospectus only filed as provided in Rule 172 will not be considered to be sent or given prior to or with a written offer within the meaning of clause (a) of Securities Act Section 2(a)(10).” [Nov. 26, 2008]