Canadian Securities Course (CSC) Practice Exam

Which type of prospectus is used by senior reporting issuers and focuses more on the security rather than the company itself?

1. Red prospectus

2. Blue prospectus

3. Green prospectus

4. Short-form prospectus

The correct answer is: Short-form prospectus

A Red prospectus is typically used by junior reporting issuers who are making an initial public offering (IPO), and provides comprehensive information about the company and the securities being offered. A Blue prospectus is used for new issues registered under the Securities Act of 1933, and contains detailed information about the company and the securities being offered. A Green prospectus is used for registered mutual funds, and provides information about the fund's objectives, risk profile, and fees. A Short-form prospectus is typically used by seasoned issuers who have a history of reporting and is an abbreviated version of the company's full prospectus. Therefore, none of these options accurately describe the type of prospectus used by senior reporting issuers that focuses more on the security rather than the company itself. The correct answer is the Short-form prospectus, as it provides a more concise overview of the security rather than the company.