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Regulations
| Question | Answer |
|---|---|
| Required that a detailed prospectus be provided to purchasers before a purchase. New issues to be purchased on margin was also banned to limit speculation. | Securities act of 1933 |
| During the 20 day cooling off period? What is prohibited ? | The issue can not be sold The issue can not be advertised The issue cannot be recommended Orders to buy the issue can not be solicited |
| Another name for a “Preliminary Prospectus” | A red herring - is not considered to be an offering so it is allowed during 20 day cooling off period. |
| What are the prospectus delivery time windows? | 25 days if IPO or add-on offering of already exchange listed issues. 40 days if add-on offering of non exchange issue (already has registered stock outstanding no exchange listed) 90 days for regular new issue |
| Which securities act defines exempt issuers and exempt transactions? | The securities exchange act of 1933 |
| An offer of securities that is made only in one state that is an exempt transaction under the securities act of 1933. Exempt from federal regulation | Intrastate offerings |
| Allows a “private placement” exemption if an issue is sold to a maximum of 35 “non accredited” investors. | Regulation D |
| The securities act of 1934 regulates trading of commodities Futures? True or false? | False |
| The SEC is empowered to administrate the uniform securities act? True or false? | False |
| What must be sent to customers of broker-dealers semi annually? | Broker-dealer balance sheet, broker-dealer subordinated loan amounts, broker-dealer net capital computation. |
| This act requires that all interstate offerings of non-exempt bonds of 50,000,000. Or more must be made with a trust indenture. Applies to corporate bond issues but not government, agency or municipal debt issues. | The trust indenture act of 1939 |
| A non-profit membership corporation, composed of all broker-dealers registered under the securities exchange act of 1934. government sponsored but idk not an agency of the government. Insures customer accounts up to 500,000 and cash coverage of 250,000 | SIPC (Securities investor Protection Corporation) |
| The securities act of 1933 regulates the primary market? | True |
| What must be filed with the SEC prior to any sales related activities takes place? | Registration statement must be filed. |
| The final prospectus must be given to purchasers during the 90 day period following the effective date? | True |
| If an issue is offered “privately” it is not considered to be a “public” offering, maximum of 35 non accredited investors and unlimited accredited investors | Regulation D |
| Which securities act defines exempt issuers and exempt transactions ? | Securities act of 1933 |
| Since commercial paper and Bankers acceptance are an exempt security they may be sold without a prospectus? | True |
| Mutual funds and Reits are non exempt and must be sold with a prospectus? | True |
| Fixed annuity contracts are non-exempt and must be sold with a prospectus? | False, they’re exempt they are considered an insurance product on the other hand variable annuity contracts ARE non exempt. |
| Final prospectus For a new registered securities issue contains the public offering price and must be given when? | Must be given to the customer at, or prior to confirmation of sale |
| Allows a broker-dealer to deliver an electronic copy of a prospectus to a purchaser of a new issue rather than a paper copy. (Broker-dealer must know customer has internet access) | “access equals Delivery” |
| Under the securities act of 1933, new issues are not marginable until how many days have elapsed ? | 30 days |
| What all is included in the tombstone announcement? | Name of the issuer, type of security, the size of the offering, the price of the issuer and the names of the underwriters. |
| This regulation gives An exemption for offerings of up to 20 million. There is no prospectus (instead the offering document is an offering circular) and no audited financials are required. These can not be listed on an exchange | Regulation A |
| This regulation gives an exemption for offerings of up to 75 million. REQUIRES audited financials can be listed on an exchange and are required to file financial statements with the SEC | Regulation A+ |
| Which offering under Regulation A is subject to limitations? | Tier 2 offerings (Regulations A+) only for non accredited investors buying a tier 2 regulation A offering cannot invest an amount that is greater than 10% of that persons annual income or net worth |
| A company has filed a registration with the SEC that uses a method that is only available to season issuers and is good for how long? | 3 years “shelf registration rule” |
| Under what rule can intrastate offerings not be resold out of state for 6 months after the initial sale date? | Under rule 147 they can be resold after 6 months they can not be publicly traded but privately sold |
| An exemptions under the Securities act of 1933 which makes it simpler for start-up companies to raise capital. Under tier 1 non-exempt issuers May issue up to 20 million of securities which can be sold to anyone with few restrictions. Tier 2 allows for is | Regulation A |
| A new issue offering to a maximum of 35 non accredited investors that has not been registered with the SEC is exempt under ? | Regulation D |
| An accredited investor questionnaire is required under which regulation? | Regulation D |
| Private placements are exempt transactions under the SEC act of 93. The issuer must file a form D with the SEC within 15 days of the offering? | True. No registration is required |
| This rule allows the sale of 1% of the issuers outstanding shares or the weekly average of the preceding 4 weeks’ trading volume WHICHEVER is GREATER to be sold every 90 days | Rule 144 |
| Form 144 does not have to be filed to sell restricted stock if? | If 5,000 shares or less, worth $50,000 or less is sold during each 90 day period. |
| As defined under rule 144 an institution with at least $100 million of assets that can be invested. | QIB Qualified institutional buyer |
| What risk is the greatest concern in rule 144A? | Marketability risk |
| The maximum amount that can be raised by regularion crowdfunding ? | 5 million |
| A rule that states a merger with another publicly held company and or a spin off of a subsidiary as a publicly held company require registration filing? | Rule 145 |
Created by:
Shaymj