General Securities Sales Supervisor (Series10) Practice Exam

When must a joint proxy statement/prospectus be delivered to shareholders during a merger of two public companies?

1. At or prior to filing with the SEC

2. At least 20 business days prior to the vote

3. At least 10 business days prior to the vote

4. No later than 1 business day after the vote

The correct answer is: At least 20 business days prior to the vote

A joint proxy statement/prospectus must be delivered to shareholders at least 20 business days prior to the vote in a merger of two public companies to ensure adequate time for review. This timing allows shareholders to thoroughly assess the information provided, which includes details on the proposed merger, the rationale behind it, the financial implications, and any potential risks involved. The requirement for a 20-business day period is a regulatory measure intended to promote transparency and informed voting among shareholders. By providing this critical documentation well in advance of the vote, companies fulfill their obligation to shareholders, enabling them to make educated decisions regarding their investments. This practice is a fundamental aspect of good corporate governance and compliance with SEC regulations, ensuring that shareholders are not rushed into making decisions that could significantly affect their financial interests.