6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement

6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement

The OS serves three basic functions:

1. It provides a description of the transaction its purpose, use of the proceeds, and a description of the securities offered and their source of repayment.
   
   
2. It assists with marketing the securities.
   
   
3. It discloses material information associated with investment in the securities, including the risks related thereto.

Because in most transactions the OS cannot describe the securities completely until after they have been sold, a POS is made available and distributed in advance of the offering. SEC Rule 15c2-12 requires the POS to be “final” except for pricing and information dependent upon or determined as part of the pricing. The POS is used by the underwriters to solicit interest in the securities. Depending upon the complexity and novelty of the transaction, the POS is generally distributed, usually by electronic posting, from a few days to a couple of weeks before the expected sale date. If material developments occur or material information comes to light after the POS has been distributed, the POS must be supplemented before the sale date.