I Fixed annuity contracts However, Tier 2 offerings (up to $50 million) are subject to purchase limitations only for non-accredited purchasers. Under SEC rules, the purchaser of a Regulation D private placement must complete and sign a(n): Correct C. II, III, IV Additional commissions or charges above the P.O.P. StatusC C. II or III, whichever is greater Restricted securities can be sold under Rule 144 if all of the following conditions are met EXCEPT: $1,000,000 of assets that it invests on a discretionary basis StatusD D. None of the above. 220,000 shares III Full disclosure must be made to investors III FINRA regulation Intrastate offerings are exempt from the Securities Act. The best answer is A. Correct A. I and III In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered StatusC C. II, III, IV PlayerSteveYoungPeytonManningKurtWarnerTomBradyJoeMontanaCarsonPalmerDaunteCulpepperRating96.894.793.292.992.390.189.9TD%5.65.75.15.45.25.14.9Inter%2.62.83.42.42.63.13.2. 2 years Week Ending Volume III The issuer must still go through a 20 day cooling off period during which the SEC may require more information to be submitted A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. Industrial Company issues 485,000 shares StatusD D. 90 days. 220,000 shares A. municipal broker-dealer always makes a market in the municipality's securities that are being recommended The Form 144 is filed on Monday, October 5th. I Sending a customer a "red herring" preliminary prospectus Correct C. I and IV Correct Answer C. the stock must be held for 6 months, fully paid Nov 21 Incorrect Answer C. 12 months I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period Rule 147 is an exemption for an intrastate offering. Correct B. III and IV only Regarding individual investors, either a minimum income ($200,000 for an individual or $300,000 for a married couple) or net worth test ($1,000,000 net worth) must be met to be accredited. IV Spin off of a subsidiary as a publicly held company Correct D. II and IV. StatusA A. I and III (see Accredited investor), To claim a private placement exemption: StatusD D. Foreign Government Debt. the disclosure document that must be filed with the SEC under the Securities Act of 1933 by all companies planning to offer non-exempt securities to the public. StatusD D. I, II, III. The VC funding will be given preferred stock with warrants, or convertible debt that the company has to Thereafter, they can be resold interstate. The failure of the weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them. D. II and IV only. Which of the following statements are TRUE regarding Rule 415? D. There is no time limitation on the period that a stabilizing bid can be maintained. The best answer is C. September 20th A. the SEC rule that requires issuers to file registration statements with the SEC when securities are created due to such actions as a merger, divestiture, or spin-off. United Way can sell the stock without restriction: Regulation D permits a private placement to be sold to a maximum of 35 non-accredited investors and an unlimited number of accredited (wealthy and institutional) investors. StatusA A. Eurodollar Debt StatusB B. II and III only Under Rule 144, the Form 144 is filed: U.S. Government securities are guaranteed by the U.S. Government and have the government's direct backing. September 27th 280,000 shares III $50,000 Restricted stock is stock which was never registered and cannot be sold in the public markets unless registration takes place or an exemption (such as Rule 144) is available. III Any purchaser will pay the Public Offering Price The SEC encourages the use of the internet and permits private placements under Regulation D to be offered via the web. Rule 144 allows the sale of the greater of 1% of the outstanding shares or the weekly average of the preceding 4 weeks trading volume every 90 days. Oct. 23rd If the officer wishes to sell the shares, the officer must meet all of the following requirements EXCEPT: Incorrect Answer D. I, II, III, IV. StatusB B. I and IV III Merger with another publicly held company 490,000 shares Because the offering only StatusA A. I and III The rules: require all transactions under Regulation Crowdfunding to take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period $100,000 StatusD D. An unlimited number. Most of the registration statement is a copy of the Prospectus to be given to investors. Incorrect Answer C. II and III Generally, registered secondary distributions are used by officers of public held companies and larger shareholders, who when selling shares, are subject to the requirements of Rule 144 (public notice of sale and limits on the amount of shares that can be sold each quarter). However, the offering must still be registered in that state, under the state "Blue Sky" laws. hich of the following securities are eligible for trading by the Federal Reserve? U.S. Government issues, savings and loan issues, and municipal issues are exempt. Control shares are registered shares owned by a key officer or director. StatusD D. I, II, III. October 4th 16,000 shares WebThe Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company.b. Under Regulation D regarding private placements, how many non-accredited investors are allowed to invest in the offering? Correct Answer C. 250,000 shares StatusA A. I and III only Tier 1 gives an "E-Z" registration process to offerings of no more than $20 million in a 12 month period. The best answer is D. There is no limit on the number of accredited investors that can purchase a private placement under Regulation D. Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. D)can be used to review the issue's creditworthiness. The best answer is B. September 13th The sale of Direct Participation Programs is regulated by all of the following EXCEPT: This is submitted to the offerer through the website, who then can give access to the potential investor. Real Estate Investment Trusts are regulated similarly to Investment Companies, and their securities are non-exempt and must be registered under the Securities Act of 1933. In April 2017, it was adjusted to $2,200. The best answer is C. II Resale of the securities is permitted outside that state immediately following the initial offering Business entertainment does not fall under the $100 gift limit. Which statements are TRUE regarding intrastate offerings? (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers IV at, or prior to, the placement of the order IV secondary distribution ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? StatusC C. 9 months The best answer is B. StatusA A. I and IV only the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. The best answer is B. II The rule exempts intrastate issues from State registration WebTo purchase an intrastate offering, the purchaser must be a primary resident of that state. are not allowed. C. MSRB Rules Regulation D The best answer is C. Form 144 does not have to be filed to sell restricted or control stock if 5,000 shares or less, worth $50,000 or less, is sold during each 90 day period. In April 2017, it was adjusted to $1,070,000. occupation. StatusA A. I and II Once the "shelf" filing is made, by giving 2 days' notice to the SEC, the issuer can sell new securities in the market. StatusC C. II and III The best answer is A. Thus, a corporation distributing a stock dividend or splitting its stock would not require a registration statement filing. StatusB B. Treasurer of the township, whose bonds the firm is offering on an agency basis, is on the Board of Directors of the municipal firm In reality, private placements are sold to a relatively small number of institutional investors. 750,000 shares Only the proceeds from the primary distribution will go to the company. Industrial companies are not exempt from the Securities Act of 1933. with a list of things you could do StatusA A. The Form 144 is simply a notification to the SEC that stock will be sold in compliance with the Rule - the SEC does not approve of the sale. StatusB B. II and IV only 600,000 shares StatusD D. the sellers want to reduce their holding in the company's stock so that they fall under the threshold for being considered to be an "insider". 6 months StatusA A. I and II only Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. II Advertisement of the issue and other investments. Then write StatusB B. I and IV The "idea" is that if a large block of stock were dumped into the open market by a selling shareholder, it could hammer the market price of the shares. IV The preliminary prospectus does not constitute an offer to sell the issue Under the Securities Act of 1933, new issues are not marginable until 30 days have elapsed from the issue (effective) date. A customer that regularly purchases new common stock issues from her broker-dealer sends an e-mail to her registered representative asking that all prospectuses be forwarded to her electronically at her e-mail address. B. StatusA A. Rule 144 permits the sale of the greater of 1% of the shares outstanding or the weekly average of the preceding 4 weeks' trading volume. Rule 147 StatusA A. I and II only The best answer is C. Rule 144A issues are private placement securities sold in minimum $500,000 blocks only to QIBs - Qualified Institutional Buyers (institutions with at least $100MM of assets available for investment). StatusC C. issuer's representation letter III Solely from the standpoint of percentage of shares outstanding, a maximum of 1% of the company's shares can be sold at this time StatusA A. I and II only The last 4 weeks' trading volumes are: Once the registration statement is filed, the issue enters the 20-day cooling off period. StatusB B. III and IV Incorrect Answer C. I and III only StatusD D. The registered representative must forward the e-mail to the branch manager for handling. C. II, III, IV III U.S. Government Bonds (see Regulation D), Which of the following are accredited investors? The best answer is B. A registered representative who handles the accounts of wealthy clients is told the StatusA A. The best answer is A. StatusD D. effective cost to potential purchasers has been established by the SEC. D. Securities Act of 1933. Which statements are TRUE regarding intrastate offerings under Rule 147? It simply notifies the SEC that the issue is being offered in compliance with the exemption. D. can recommend stocks. Correct Answer D. 6 months. Do not confuse Rule 144A with Rule 144, which covers the sale of "restricted" and "control" stock in the open market. StatusC C. The research report may only be sent to customers who have bought new issues within the preceding 12 months Since this customer made the request by e-mail, we know that the customer has internet access and the firm can follow the customer's instructions. Oct. 30th The research report may be sent to any customer expressing an "indication of interest" III primary distribution d. What is your decision regarding H0? Correct Answer B. I and IV StatusB B. IV secondary distribution The registration statement must be amended, and the 20 day cooling off period starts recounting from the date of the amendment filing. 100% of the issue must be sold solely to state residents to obtain the exemption. If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. A spouse is considered an affiliated person. The MSRB has no regulatory authority over limited partnerships. Which statement is TRUE regarding Commercial Paper? WebIntrastate securities offerings are exempt from the registration requirements of the Securities Act of 1933. For the exam, know the base amount and the fact that it is indexed for inflation periodically. Incorrect Answer B. While no prospectus is required, each buyer must be given disclosure in an Offering Circular. 2 years Taxes & Tax Shelters: Tax Advantaged Investme, Series 7: Regulations (Other Federal and Stat, Temperature and Pressure Conditions at STP, Regulations: Other Federal and State Regulati, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Transmucosal Drug Delivery I: Bioadhesive Pol. StatusC C. I, II, III StatusA A. The Securities Act of 1933 is primarily concerned with registration of:: The best answer is C. The Securities Act of 1933 requires that new issues that are not exempt from the Act be registered with the SEC. Intrastate Crowdfunding The Act makes crowdfunding legal in Michigan. Common carriers, small business investment companies, and benevolent associations are all exempt. B. I and IV ", Which statements are TRUE regarding intrastate offerings under Rule 147? Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. 525,000 shares StatusC C. The client cannot make the investment because the offering is only available to institutional investors An "accredited investor questionnaire" is required when which type of offering is made to investors? During this time period, the issue may not be sold nor advertised, so neither firm orders, nor deposits can be taken. 400,000 shares III FINRA regulation Correct Answer A. Prior to the "20 day cooling off period," the filing had not been made, so nothing can be done that involves contacting the public about that issue. Correct C. 18,250 shares 250,000 shares Incorrect Answer A. A Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment. Correct Answer A. I or III, whichever is greater The best answer is B. The prospectus is the disclosure document for new issues that are not exempt from registration. III Resale of the securities is not permitted within that state for 6 months following the initial offering II A registered representative pays for a $300 meal with a customer An officer of a company has acquired shares of that issuer in the open market. This research report cannot be sent, since it would be considered to be a prohibited "offer to sell" the securities. The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. Conduct the following test of hypothesis using the .08 significance level.a. Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. Statement A is untrue - options have greater risk than the underlying securities because they are more volatile and lose time value each day. The best answer is C. Bankers Acceptances are a money market instrument used to finance imports and exports. The Securities Act of 1933 regulates the subsequent public trading of StatusA A. Private placements are exempt transactions under the Securities Act of 1933. The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. The best answer is A. MNO has 50,000,000 shares outstanding. a notice from the Securities and Exchange Commission to an issuer who has filed a registration statement under the Securities Act of 1933, that the disclosure is not adequate. September 6th WebWhich of the following statements is true? A. A new issue offering to a maximum of 35 non-accredited investors that has not been registered with the SEC is: Week Ending Volume Nov. 5th Which of the following are non-exempt issues under the Securities Act of 1933? III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days StatusB B. II and III only Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person C. I and III only As long as the 6-month holding period requirement has been met on the restricted shares (the officer held them 3 years) when they are donated, the charity can sell them immediately. StatusB B. III and IV only StatusA A. seller's representation letter Please note that a registration statement is not required to be filed if a corporation splits its stock or distributes a stock dividend, since such a distribution affects only the par value of the outstanding shares - it does not create a new class of security. IV sales of restricted stock The best answer is A. IV Resale is permitted to state residents only, for the 180 day period following the offering I by the seller of the restricted shares I 1% of the outstanding shares 18,000 shares Intrastate offerings are exempt from Federal StatusC C. Small Business Investment Company issues It is permitted to distribute a red herring preliminary prospectus; to take non-binding indications of interest; and to publish an tombstone announcement. All of the following statements about e-mail sent by a registered representative to 50 retail clients are true EXCEPT the communication: The best answer is A. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. Second, I objected to part of proposed new Rule 147 that holds if an offering is conducted pursuant to an exemption from state law registration, the offering must be The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. The filing of Form D is not a registration. 400,000 shares Nov. 12th II Solicitations of orders All of the following are exempt issues under the Securities Act of 1933 EXCEPT: The best answer is C. Real Estate Investment Trusts are regulated similarly to Investment Companies, and their securities are non-exempt and must be registered under the Securities Act of 1933. The firm has more than 300 lawyers and other professionals practising in New York, New York; Washington, DC; Los Angeles and San Diego, California; Chicago, Illinois; Stamford, Connecticut; Parsippany, New Jersey; and Houston, Texas. Webanswer questions of a general nature regarding the registration process or exemptions from registration. Week Ending Volume III Treasury Bonds Rule 147 is considered a safe harbor under Section 3(a)(11), providing objective standards that a company can rely on to meet the requirements of that exemption. I Intrastate offerings are subject to Federal registration To obtain the 147 exemption, both the issuer and the purchaser must be state residents. Rule 147 is the intrastate exemption; Rule 144 is an exemption from SEC registration for the resale of private placement stock owned by an investor where the company subsequently went public; and Regulation A is an exemption from registration for the sale of a small dollar amount ($50 million or less). This market is not available to individuals. FINRA regulates the sale of limited partnerships. A: Intrastate offerings are subject to federal registration only B: Intrastate offerings are exempt from state The Securities Exchange Act of 1934 consists of a variety of rules covering the trading (secondary) market. StatusD D. I, II, III, IV. Correct Answer A. I only The maximum amount that can be invested in a single offering under Regulation Crowdfunding is $100,000. Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. 600,000 shares The issuer must file a Form D with the SEC within 15 days of the offering to claim the exemption. C. MSRB Rules \hline \text { Steve Young } & 96.8 & 5.6 & 2.6 \\ 3 months Non-profit organization with assets in excess of $2,000,000 now to prepare yourself to pursue the StatusC C. This is permitted under SEC rules as long as the potential viewer completes and signs an arbitration agreement before being given the password to enter II Eurodollar Debt Thus, issuers can sell private placements to these QIBs, who can then trade the private placement issues among themselves. WebKelley Drye & Warren LLP has provided carefully tailored legal counsel to its clients for more than 180 years. II by the buyer of the restricted shares Correct C. Rule 144A issues trade in the PORTAL market from QIB to QIB StatusD D. II and IV, The best answer is A. Crowdfunding offerings are used by start-up companies to raise "seed" money, with the maximum amount permitted to be raised capped at $1,000,000 per offering. "Options involve a lower degree of risk than trading the underlying securities because the capital requirements are lower" The weekly average of the preceding 4 weeks' trading volume is: 35 Q Which statements are TRUE? September 13th 19,000 shares 1 year Which of the following statements are TRUE regarding the preliminary prospectus? I This rule allows seasoned issuers to file a blanket registration which covers a 3 year period Intrastate offerings are subject to: I Individual earning $200,000 per year The weekly average of the preceding 4 weeks' trading volume is: The client cannot make the investment unless he or she is an accredited investor IV Up to 6 sales per year are allowed 2.Reversing the order of the intersected tables alters the result. The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 months fully paid. The underwriters use the indications collected as one of the determinants for pricing the issue (this happens at the very end of the cooling off period). This company is already publicly traded, therefore it is filing its financial information with the SEC, which makes the information available to the public, making Choice D incorrect. Correct C. Regulation A III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered StatusD D. II and IV. StatusA A. I and III (b) Describe its shape (skewed left, symmetric, skewed right). StatusB B. I and IV There is no restriction on resales within that state. The intent is to make it simpler for start-up companies to raise capital. Which are permitted under FINRA rules? The greater amount, 18,250 shares, can be sold during the next 90 days. Rule 144A issues are not listed and trade in the OTCBB or Pink Sheets StatusB B. II and IV Correct Answer C. II, III, IV 12 months (Test Note: The investment minimum and maximum amount that can be raised are subject to an inflation adjustment every 5 years. D. Purchase a municipal bond where the broker-dealer is a market maker in the security. StatusD D. II and IV. StatusC C. a Form 144 must be filed with the SEC The only way to resell them is in a "private transaction.". IV Publishing a tombstone announcement Correct Answer C. the public offering price as stated in the prospectus without any commission the effective date of the issue is unaffected by the deficiency notice An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investor Correct B. II unregistered distribution StatusD D. 1,025,000 shares. Which of the following securities is NOT exempt from the Securities Act of 1933? IV Listed common stock StatusA A. I and III Both the issuer and all purchasers must be state residents B. Resale is permitted to state residents only, for the 180 day period following the offering C. The rule exempts intrastate issues from State registration D. The rule exempts intrastate issues from Federal registration Correct D. II and III only. The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. StatusC C. I and IV only StatusD D. either before, during, or after the 20 day cooling off period. The prior weeks' trading volumes are: Correct Answer A. they are sold on a dealer basis An investor owns 20% of the outstanding shares of ABC Corporation, a publicly traded company. Nov. 5th StatusA A. before the 20 day cooling off period Correct Answer B. IV Rule 144A permits issuers to sell tradeable private placement units to individual investors 400,000 shares Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. StatusA A. Incorrect Answer A. this is a new issue offering of a non-exempt security that must be registered with the SEC and sold to the public with a prospectus under the requirements of the Securities Act of 1933 Press Release: SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework, Press Release: SEC Seeks Public Comment on Ways to Harmonize Private Securities Offering Exemptions, be organized in the state where it is offering the securities, carry out a significant amount of its business in that stateand, make offers and sales only to residents of that state, the company must be organized in the state where it offers and sells securities, the company must have its principal place of business in-state and satisfy at least one doing business requirement that demonstrates the in-state nature of the companys business, offers and sales of securities can only be made to in-state residents or persons who the company reasonably believes are in-state residentsand, the company obtains a written representation from each purchaser providing the residency of that purchaser, allows offers to be accessible to out-of-state residents, so long as sales are only made to in-state residentsand, permits a company to be incorporated or organized out-of-state, so long as the company has its principal place of business in-state and satisfies at least one doing business requirement that demonstrates the in-state nature of the companys business. Correct C. $1,000,000 (see Exempt security, Non-exempt security, Prospectus), Which of the following activities are allowed prior to the filing of a registration statement? 45 days 4.The number of columns and data types must be identical for all SELECT statements in the query. The Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following completion of the initial offering. D. effective cost to potential purchasers has been established by the Federal Reserve the accounts of wealthy is... Which statements are TRUE regarding intrastate offerings are exempt transactions under the state `` Blue Sky '' laws hypothesis. Offerings are exempt IV III U.S. Government debt and Foreign Government debt and Government... 90 days the 20 day cooling off period the terms of the following are Accredited investors amount that can raised. 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