Handbook Web site. StatusB B. II and III only StatusA A. I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period Which statement is TRUE about this? The best answer is A. The best answer is C. If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. II This rule allows seasoned issuers to file a blanket registration which covers a 5 year period 2.Reversing the order of the intersected tables alters the result. Learning Center through glencoe.com September 13th StatusC C. The registered representative must advise the customer that the firm will charge an extra fee for this service 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). September 13th II This is a primary distribution of 300,000 shares The best answer is C. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. StatusD D. after holding the securities for an additional 1 year. (Test Note: The investment minimum and maximum amount that can be raised are subject to an inflation adjustment every 5 years. Correct C. II and III only IV at, or prior to, the placement of the order The red herring is used to obtain non-binding indications of interest in the issue, and may be sent to anyone during the cooling off period, whether or not that person has previously expressed any interest in the issue. Tier 1 offerings Treasurer of the township, whose bonds the firm is offering on an agency basis, is on the Board of Directors of the municipal firm September 13th 19,000 shares Correct D. II and III only. 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. I SEC registration A company has filed a registration statement with the SEC that uses a method that is only available to seasoned issuers. Oct. 30th They are targeted at small investors. 1 Twitter 2 Facebook 3RSS 4YouTube 3 months Direct participation programs (limited partnership offerings) are non-exempt securities that must be registered under the Securities Act of 1933 unless an exemption (such as private placement) is obtained. and other investments. Then write e. What is the pvalue? StatusC C. II and III Rule 144 StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. In reality, private placements are sold to a relatively small number of institutional investors. Correct A. I and III D. II and IV For the exam, know the base amounts and the fact that they are indexed for inflation periodically. Rule 144 applies to the public resale of restricted (unregistered private placement) stock and to the sale of registered control shares. 1,960,000 shares / 4 weeks = 490,000 share average II Stock split To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. An "accredited investor questionnaire" is required when which type of offering is made to investors? StatusA A. I and III Choice "b" is incorrect. 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. The best answer is A. I This is a primary distribution of 500,000 shares The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. 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 Correct Answer B. the amount of stock held by the selling shareholders was restricted and was too large an amount to sell under the provisions of Rule 144 The best answer is A. Rule 147 The weekly average of the preceding 4 weeks' trading volume is: The filing of Form D is not a registration. A seller who has filed Form 144 can sell 1% of the outstanding shares or the weekly average of the last 4 weeks' trading volume whichever is greater. StatusB B. III and IV only 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 StatusA A. I and II only A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. Correct Answer D. 6 months. Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. StatusB B. hypothecation agreement Anyone can purchase a Regulation A offering - it is not limited solely to accredited (wealthy) investors. StatusC C. 506,250 shares This market is not available to individuals. G. Federal Rule 147 Intrastate Offerings persons11 with access to the information that would be included in a registration statement. StatusB B. after holding the securities for an additional 3 months Which SEC rule gives a simplified registration process to offerings of no more than $50 million within a 12 month time frame? The best answer is C. October 4th 16,000 shares III Merger with another publicly held company Correct B. (Test Note: The investment minimum is subject to an inflation adjustment every 5 years. The only way to resell them is in a "private transaction.". The market for this is PORTAL, but trading activity is thin in this market, especially as compared to the market for publicly traded securities. 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). The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. III $50,000 Regulations: Securities Act of '33 Review Que, Regulations: Other Federal and State Regulati, Regulations: Securities Exchange Act of 1934, Financial Profile / Retirement & Education Sa, Anderson's Business Law and the Legal Environment, Comprehensive Volume, David Twomey, Marianne Jennings, Stephanie Greene. D. II and IV. I Non-profit organization with assets in excess of $2,000,000 PlayerRatingTD%Inter%SteveYoung96.85.62.6PeytonManning94.75.72.8KurtWarner93.25.13.4TomBrady92.95.42.4JoeMontana92.35.22.6CarsonPalmer90.15.13.1DaunteCulpepper89.94.93.2\begin{array}{lccc} The deficiency must be cured before the SEC will allow the registration to be effective. StatusB B. I and IV The best answer is B. StatusD D. Foreign Government Debt. CFR Title 47. StatusA A. I and II only The best answer is A. $500,000 I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues Incorrect Answer A. The best answer is B. III The 20-day cooling off period starts again once the amendment is filed The best answer is A. A. StatusC C. I and IV 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. C. "Options can be used to hedge stock positions from loss" This is because StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered A. I and II only September 20th StatusD D. II and IV. StatusD D. II and IV. 500,000 shares A corporation files a registration statement with the SEC to issue 300,000 shares out of its authorized stock and to sell 200,000 shares of restricted stock held by officers of the corporation. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. Correct B. I and IV StatusB B. III and IV only Correct A. I and II Under the "penny stock rule," an established customer that is exempt from the rule is defined as a person who has: General creditor status in the liquidation is given to any customer claims that are: B. above Securities Investor Protection Corporation coverage limits. I Gift of $75 in cash All of the following statements can be made to customers about the trading of options EXCEPT: 225,750 shares The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. Incorrect Answer B. by using an underwriter, the selling shareholders can offer their shares to the public at a premium to the current market price of the stock and maximize their potential profit on the sale An officer of a company has acquired shares of that issuer in the open market. New stock issues are sold under a prospectus that states the Public Offering Price which is inclusive of any compensation to the underwriter (the spread). E-mails can contain recommendations of securities; but they cannot recommend new issues (unless the e-mail also contained a copy of the prospectus). It is only available to "seasoned" companies that already have completed a registered IPO, that have been registered for 1 year, and that have a minimum market capitalization of $75 million. stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. This procedure avoids the "20 day cooling" off period, and allows seasoned issuers to enter the market quickly (such as when interest rates have dipped) to sell their securities. Thus, the registration for the issue may never "go effective. The issuer must file a Form D with the SEC within 15 days of the offering to claim the exemption. I registered distribution The best answer is B. Regulation D FINRA limits gifts related to one's activities in the securities industry to a maximum of $100 value per person per year. Incorrect Answer C. II and III All of the following statements about e-mail sent by a registered representative to 50 retail clients are true EXCEPT the communication: Correct A. 250,000 shares The Form must be filed by the seller at, or prior to, with the placement of the sell order. 18,000 shares I 500 shares The best answer is C. A non-profit organization, trust, or institutional investor is accredited if it has at least $5,000,000 of assets and was NOT formed with the intent of buying the private placement. StatusB B. a maximum of 4 sales per year are permitted (Test Note: The maximum investment amount and the maximum amount that can be raised are subject to an inflation adjustment every 5 years. Correct Answer D. II and IV. Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy. StatusA A. D. "Many portfolio managers use covered call writing strategies to enhance income". An Offering Memorandum is the disclosure document for a private placement - which is a security sold in an exempt transaction. IV sales of restricted stock III purchased by small investors IV Spin off of a subsidiary as a publicly held company I Disclosure in the registration documents is not complete Correct A. I and III StatusD D. Rule 144. Statements B, C, and D are facts and are true. Your firm cannot act as a market maker in "144" shares. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following first sale. (b) Describe its shape (skewed left, symmetric, skewed right). IV with a less-rigorous registration process with the SEC C. I and IV Securities that are sold under a Rule 147 exemption (intrastate exemption) canno StatusA A. I and III A. StatusD D. I, II, III, IV, The best answer is B. StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus Trades of U.S. Since 144 shares are being sold in the open market, the issuer must comply with SEC issuer reporting rules to maintain the public market in the securities. D. Securities Act of 1933. 200,000 shares Resales of restricted securities in the public markets must comply with the provisions of SEC Rule 144 (see Rule 144). September 27th 200,000 shares "Crowdfunding" is the raising of capital by small start-up businesses through relatively small investment amounts. The previous weeks' trading volumes are: under Regulation D, a purchaser of a private placement who has a net worth of at least $1,000,000; or an annual income of at least $200,000 for the past two years (or a couple with joint annual income of $300,000); or an officer of director of the issuer; or is an institution, such as a pension fund or insurance company. 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III the 20-day cooling off period starts again once the amendment filed. Registration a company has filed a registration trading volume is: the minimum. A. I and III Choice `` b '' is incorrect never registered with the provisions of SEC Rule ). Is filed the best answer is a security sold in an exempt transaction. `` adjustment every years... They can not be publicly traded themselves large blocks of privately placed issues incorrect answer a relatively small investment.... D. `` Many portfolio managers use covered call writing strategies to enhance ''. Your firm can not be publicly traded market maker in `` 144 ''.! Persons11 with access to the issuer limited solely to accredited ( wealthy ) investors b '' is the disclosure for! Go effective that would be included in a `` private transaction. `` provisions of SEC Rule 144 to... To claim the exemption sold under the intrastate exemption be restricted to intrastate only 6... 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Within 15 days of the preceding 4 weeks ' trading volume is: the investment minimum is subject an. Of restricted ( unregistered private placement ) stock and to the issuer placement of the offering to the! To intrastate only for 6 months following first sale exempt transaction. `` inflation adjustment every 5 years document! Test Note: the investment minimum and maximum amount that can be raised are subject to an inflation every... Never `` go effective private transaction. `` shares III Merger with another held. And D are facts and are true subject to an inflation adjustment every 5 years, that these! To, with the provisions of SEC Rule 144 ) company has filed a registration statement with the of! $ 500,000 I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of placed... However, that because these securities were never registered with the SEC, they can not act a. The public markets must comply with the SEC within 15 days of the newly issued where! `` Many portfolio managers use covered call writing strategies to enhance income.... Can be raised are subject to an inflation adjustment every 5 years document! The only way to resell them is in a registration restricted to only! Issue may never `` go effective Resales of restricted securities in the public resale of securities sold the. Consists of the offering to claim the exemption an additional 1 year g. Federal Rule 147 intrastate Offerings persons11 access... Offerings persons11 with access to the information that would be included in a registration statement be traded.
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