4.1.6.2. Free Writing Prospectus (FWP)
The gun-jumping provisions in Section 5 of the Securities Act restrict any party from making offers of a security before the registration statement has become effective, unless the offer is made through the preliminary prospectus. These provisions were put in place to protect the retail investor by making sure that each investor could make an informed decision by having access to the same information.
In 2005 the restrictions were relaxed to allow additional kinds of offers. Perhaps the most influential modification was the introduction of the free writing prospectus. A free writing prospectus (FWP) is a written offer to sell or a solicitation to buy the securities in an offering. It differs from a formal prospectus in that it does not have to meet a formal prospectus’s content requirements and it may contain additional information, just as long as it