What term defines an offering of securities from the issuer's treasury requiring a prospectus?

• A. Distribution
• B. Underwriting
• C. Market Making
• D. Private Placement

Answer: (A)

The correct answer is defined as a "Distribution." In the context of securities, a distribution refers specifically to the process of offering securities to the public or specific groups of investors directly from the issuer's treasury. This process necessitates the use of a prospectus, which is a legal document that provides essential details about the investment offering, including financial statements, risks, and the use of proceeds from the securities being sold.

When securities are distributed, it typically involves a comprehensive effort to market the securities to potential buyers, ensuring that all necessary disclosures are made to protect investors and comply with regulatory requirements. The use of a prospectus is crucial in this context as it facilitates informed decision-making by the investors.

Other terms like underwriting involve a slightly different context, usually relating to the financial intermediaries that assist in the production of a public offering rather than the sale directly from the issuer. Market making pertains to the process of providing liquidity in the markets, facilitating trades between buyers and sellers. Private placement involves selling securities to a select group of investors without requiring a formal prospectus, thus falling outside the definition of distribution requiring a prospectus.