Chapter 1: Seeking Business
This chapter covers 24% of the Series 6 exam (approximately 12 questions) and focuses on how broker-dealers communicate with the public about mutual funds and variable contracts, plus the mechanics of bringing new issues to market.
What You'll Learn
| Unit | Topic | Key Concepts |
|---|---|---|
| 1 | Communications with the Public | Retail vs. institutional vs. correspondence, principal approval, filing, mutual fund and variable product disclosures, SEC Rules 482/498/156, MSRB G-21 for 529 plans |
| 2 | Soliciting Business and New Issues | Prospectus requirements and timeliness, the new-issue process, municipal POS/OS/Notice of Sale, Regulation D private placements, exempt securities, networking arrangements |
Why This Chapter Matters
Before a customer can buy a mutual fund, variable annuity, or 529 plan, the firm has to reach them with a legally compliant communication and, for any new issue, deliver the right prospectus at the right time. This chapter covers both sides of that process: the content and approval rules for every piece of advertising, correspondence, and seminar material, and the timing and delivery rules that govern new mutual fund, variable contract, and municipal fund security offerings.
The exam tests whether you can classify a communication correctly, identify who must approve it, know which disclosures are required for each product type, and understand the prospectus delivery rules that apply to packaged products.
Exam Strategy
At 24% of the exam (12 questions), this chapter is heavily weighted for a two-unit section. Focus on:
- Communication categories: Retail (more than 25 retail investors in 30 days), institutional, and correspondence trigger different approval and filing rules
- Product-specific disclosures: Mutual fund performance advertising (Rule 482), profile prospectuses (Rule 498), and variable product illustrations each have their own required legends
- Prospectus timing: Delivery at or before confirmation for new issues; access-equals-delivery for most mutual funds
- MSRB Rule G-21: Municipal fund securities (529 plans, LGIPs, ABLE) have a separate advertising regime
- Reg D mechanics: Rule 506(b) vs. 506(c), accredited investor verification, resale restrictions, Form D filing within 15 days