What is needed for a warrant in regard to a prospectus?

A prospectus is a formal document that provides details about an investment offering to the public, serving as a key disclosure tool for potential investors. The requirement outlined in the correct answer is based on regulatory frameworks that govern securities offerings.

In this context, a prospectus is required unless less than 20% of the issued shares have been offered over the last 12 months. This threshold is significant as it is designed to balance the need for investor protection through adequate information disclosure while allowing companies some flexibility in capital raising. By stipulating a 20% limit, regulators ensure that smaller offerings, which may not pose as much risk to investors, do not require the same extensive documentation as larger, potentially more impactful offerings. Consequently, the regulation encourages transparency in significant share distributions while recognizing that smaller transactions may not necessitate a full prospectus.

This understanding highlights why the other options fall short. If a prospectus is never required, it could lead to lack of transparency in all investments, which is contrary to investor protection principles. The idea that a prospectus is needed only if over 50% of issued shares are involved could impose unnecessary burdens on companies making smaller offerings. Lastly, suggesting that a prospectus is only required for institutional investors ignores the broader obligation to