A formal written offer to sell securities publicly that provides an investor with the necessary information to make an informed decision, based on the issuer's registration statement filed with the SEC. A prospectus explains a proposed or existing business enterprise and must disclose any material risks and information according to the securities laws. A prospectus must be filed with the SEC and be given to all potential investors. Companies offering securities, mutual funds, and offerings of other investment companies are required to issue prospectuses describing their history, investment philosophy or objectives, risk factors and financial statements.