Final answer:
A firm must file a preliminary registration statement with the Securities and Exchange Commission (SEC) when marketing new securities, particularly during an initial public offering (IPO).
Step-by-step explanation:
When a firm markets new securities, such as in the process of an initial public offering (IPO), a preliminary registration statement must be filed with the Securities and Exchange Commission (SEC). This step is mandated by the Federal Securities Act as part of the legal requirements for transparency in transactions involving publicly traded securities. Firms engage in an IPO to raise capital from the public, which includes a variety of investors like individuals, mutual funds, insurance companies, and pension funds. The capital raised is often used to repay early-stage investors, such as angel investors and venture capital firms, as well as to provide the company with financial resources for expansion. The SEC plays a crucial role in regulating and supervising the sale of securities and ensuring that potential investors have access to essential information about the firm's financial health and business prospects.
When a firm markets new securities, a preliminary registration statement must be filed with the Securities and Exchange Commission (SEC). The SEC is responsible for regulating and supervising the sale of securities and the brokers, dealers, and bankers who sell them. It ensures that investors are provided with accurate and relevant information about the securities being offered.