Only the proceeds from the primary distribution will go to the company. When the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements is (are) TRUE? Whereas normal private placements cannot be traded, these can be traded from QIB to QIB. The best answer is B. September 20th 20,000 shares B. III and IV only The only permitted written communications during this period are the red herring preliminary prospectus, and a tombstone announcement (which, in reality, is not published until the effective date). IV Listed common stock I Federal registration October 4th 16,000 shares StatusD D. II and IV only. Thus, while the issue is in registration, the issue cannot be offered, sold, advertised, or recommended, and orders to buy the issue cannot be solicited. 450,000 shares The proceeds from the secondary distribution go to the selling shareholders. The Federal Reserve trading desk can trade securities issued by the U.S. Government, Government Agencies, and prime Banker's Acceptances. StatusA A. before the 20 day cooling off period StatusC C. II and III Regulation A is intended to make it easier for start-up companies to raise capital. C. I and III only An investor wishes to sell restricted stock under the provisions of Rule 144. II 5,000 shares This market is not available to individuals. C. Purchase a municipal bond where the broker-dealer has a control relationship with the issuer II State registration Determine the least-squares regression line for estimating the passer rating based on the percentage of passes that were touchdowns. StatusC C. 3 II A preliminary prospectus may be sent to a prospective customer once the issue has entered into the 20 day cooling off period StatusA A. I and II only No registration is required. A. I and II only The best answer is A. 6 months StatusB B. II and IV Which statement about Auction Rate Securities is FALSE? It applies limits to sales of restricted (private placement) stock in the open market and sales of registered stock being sold by control persons. This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: 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. D. II and IV only. Thereafter, they can be resold interstate. Correct B. StatusD D. II or IV, whichever is greater. Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. Correct B. I and IV This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. StatusD D. I, II, III. 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. 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. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. These are wealthy individuals and institutional investors. Which of the following are prohibited during the 20 day cooling off period for a new issue in registration? U.S. Government issues, savings and loan issues, and municipal issues are exempt. StatusC C. II and III StatusB B. Non-profit organization with assets in excess of $2,000,000 Rule 144 does not apply to stock purchases - it only applies to stock sales. The sale of Direct Participation Programs is regulated by all of the following EXCEPT: StatusA A. I and IV only 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. Since the shares are being offered at the current market price of the stock, Choice B is false. D. II and IV. $1,000,000 of assets that it invests on a discretionary basis Posted Date :-2022-03 II This is a primary distribution of 300,000 shares Correct Answer A. they are sold on a dealer basis Correct B. The best answer is A. StatusD D. 4 years. StatusA A. I and II III Any purchaser will pay the Public Offering Price This procedure is much faster and cheaper. Correct C. $100,000,000 of assets that it invests on a discretionary basis Which of the following securities are NOT required to be registered with the SEC? StatusD D. I, II, III, IV. FINRA regulates the sale of limited partnerships. A. C. Auction Rate Securities can be put back to the issuer at the reset date StatusB B. 3,000,000 shares / 4 weeks = 750,000 share average II Any purchaser who received a preliminary prospectus need not receive the final prospectus Under Regulation D regarding private placements, how many non-accredited investors are allowed to invest in the offering? c. Compute the value of the test statistic. A security of an issuer which has been bought in the open market by an officer or director of that company StatusD D. I, II, III, IV. The Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company. A. This amount can be sold how many times a year? The transfer agent is authorized by the SEC to transfer the shares without a copy of the Form 144. (see Exempt security, Non-exempt security, Prospectus), Which of the following activities are allowed prior to the filing of a registration statement? II unregistered distribution Regulation D allows a "private placement" exemption if an issue is sold to a maximum of 35 "non-accredited" investors. An "accredited investor questionnaire" is required when which type of offering is made to investors? September 27th 200,000 shares 1% of 1,800,000 shares = 18,000 shares. known as the "shelf registration rule," this is a streamlined registration process under the Securities Act of 1933 for large, established companies. 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. Correct B. a Form D must be filed with the SEC 1,960,000 shares / 4 weeks = 490,000 share average II Gift of baseball tickets with a value of $75 The 6-month holding period is required for restricted stock, but not for control stock. StatusB B. Which statement is true regarding the INTERSECT operator? A Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment. III Intrastate offerings are exempt from Federal registration II Savings and Loan Issues The greater amount is 1% of outstanding shares, or 500,000 shares. The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 months fully paid. The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). While no prospectus is required, each buyer must be given disclosure in an Offering Circular. Correct C. I and IV IV with a less-rigorous registration process with the SEC A. Whether or not the purchaser received a preliminary prospectus is a moot point - any purchaser must get the final prospectus at, or prior to, confirmation of sale. If the trust accumulated $5,000,000 for investment, it would be accredited. The 1934 Act does not apply to initial offerings. Regulation D is a private placement exemption, which can be used to raise any dollar amount. 237,500 shares This is because This is retained by the broker-dealer or issuer selling the securities and is proof that the purchasers were accredited. The registration statement must be amended, and the 20 day cooling off period starts recounting from the date of the amendment filing. The best answer is D. Government bonds, municipal bonds, and Small Business Investment Company issues are all exempt securities under the 1933 Act. 220,000 shares StatusB B. 485,000 shares StatusA A. I Real Estate Investment Trusts 3 months II Solicitations of orders A small investor with $2,000 of available funds wishes to make a crowdfunding investment. The secondary distribution consists of the 200,000 shares being sold by officers (who are "tacking on" their shares to the primary distribution to avoid having to resell the shares under Rule 144 restrictions). The seller must represent that the securities have been held fully paid for 6 months, otherwise Rule 144 cannot be used. 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 IV The preliminary prospectus does not constitute an offer to sell the issue 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. Rule 147 is an exemption for an intrastate offering. 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. II Accepting an indication of interest from the customer Incorrect Answer C. I and III only WebAll of the following regarding the official statement for a new municipal issue are true EXCEPT that it: A)meets disclosure requirements for purchasers of the new issue. Incorrect Answer B. the public offering price as stated in the prospectus plus a mark-up IV Gift of baseball tickets with a value of $150 StatusD D. Foreign Government Debt. 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. Correct Answer B. Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. Correct A. Excluding the percentage of the outstanding shares test, the maximum permitted sale under Rule 144 is the weekly average of the last: WebAll of the following statements regarding short term negotiable certificates of deposit are correct EXCEPT: A. the minimum denomination is $100,000B. StatusA A. a registration statement must be filed with the SEC III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered StatusB B. II and IV only 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. Regulation Crowdfunding is intended as a means of raising capital: First, the Act permits intrastate crowdfunding. (a) Sketch a simple boxplot ( 5 number summary without fences) using a nicely scaled XXX-axis. I Sale of the issue A managed offering of already outstanding shares is a secondary offering (such as a prospectus offering of officer's shares). Which of the following statements are TRUE regarding the preliminary prospectus? Correct C. II, III, IV IV Spin off of a subsidiary as a publicly held company Week Ending Volume The best answer is A. Correct A. I and III Q2. $500,000 StatusC C. I and III only The VC funding will be given preferred stock with warrants, or convertible debt that the company has to WebXYZ Corporation is preparing a registration statement for a new issue consisting of 300,000 new shares and 200,000 existing shares held by officers. An unregistered hedge fund creates a website and uses it to promote itself to investors. The filing of Form D is not a registration. 2 weeks' trading volume Since one state is involved, the issuing company does not have to 35 C. MSRB Rules II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person Resale is restricted to state residents for 6 months following the offering; thereafter, the issue can be sold interstate. 45 days StatusA A. StatusB B. The client cannot make the investment unless he or she is an accredited investor In the United States, an intrastate offering is a securities offering that can only be purchased in the state in which it is being issued. Assuming that all other requirements of the rule are met, the maximum sale amount is: 400,000 shares StatusB B. II and IV The previous weeks' trading volumes are: I Individual earning $200,000 per year $500,000 Which statement is TRUE regarding Commercial Paper? C. II, III, IV WebWhich statements are TRUE regarding intrastate offerings? StatusC C. II, III, IV II Stock split 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. The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. Note that there is no similar limitation on Tier 1 purchases. StatusD D. $5,000,000, The best answer is C. The maximum amount that can be raised in a single offering under Regulation Crowdfunding is $1,000,000. ), The selling shareholders are required to offer their shares via a prospectus because: StatusA A. The best answer is B. StatusD D. no filing is required with the SEC. Rule 144A issues are NMS securities that are listed and trade on the NYSE, AMEX and NASDAQ The best answer is C. 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). D. Securities Act of 1933. Sell naked calls WebTo purchase an intrastate offering, the purchaser must be a primary resident of that state. 2 years Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push the price up). Under the "access equals delivery" rule, prospectuses can be delivered electronically to customers as long as the member firm knows that the customer has internet access. The best answer is D. During the 20-day cooling off period for a new issue in registration, the worry of the SEC is that the underwriters will "hype" the issue to increase investor interest and hence increase the final Public Offering Price. Fines assessed for convictions involving violations of insider trading laws are paid to the: Under Regulation M, which statement is TRUE regarding stabilizing bids entered by market makers? StatusA A. I and III Private placements under Regulation D are typically only offered to "accredited investors." 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. 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. 1.It ignores NULL values. Incorrect Answer B. 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. StatusD D. II and IV. ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? MNO has 50,000,000 shares outstanding. Correct A. \text { Joe Montana } & 92.3 & 5.2 & 2.6 \\ StatusD D. 12 weeks' trading volume. Correct B. buyer's representation letter FINRA limits gifts related to one's activities in the securities industry to a maximum of $100 value per person per year. II for established companies Incorrect Answer C. $1,000,000 The issue must also be registered in the state(s) where it will be offered. The best answer is B. The rule allows the greater of 1% of the outstanding shares or the weekly trading average of the last 4 weeks to be sold under the filing. StatusD D. 90 days. StatusD D. II and IV. Correct Answer C. accredited investor questionnaire Choice A would not be considered to be a control relationship because the broker-dealer is not involved in a relationship with the issuer - rather the firm is simply trading the bonds in the secondary market. If the Form 144 had been filed the preceding week, the maximum permitted sale is: 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. I Non-profit organization with assets in excess of $2,000,000 Correct A. The weekly average of the preceding 4 weeks' trading volume is: StatusD D. effective cost to potential purchasers has been established by the SEC. Oct. 23rd 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. The only way to resell them is in a "private transaction. Incorrect Answer B. C. II, III, IV 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. b. StatusD D. after holding the securities for 3 years. 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). StatusB B. II only I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues \end{array} StatusB B. I and IV State Blue Sky Laws I A registered representative accepts a $300 gift from a customer Incorrect Answer B. 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