II Resale of the securities is permitted outside that state immediately following the initial offering The President of PDQ Corporation buys PDQ shares in the open market. Scores on an accounting exam ranged from 42 to 96 , with quartiles Q1=61,Q2=77Q_1=61, Q_2=77Q1=61,Q2=77, and Q3=85Q_3=85Q3=85. Correct C. 18,250 shares StatusD D. 24 months, The best answer is B. 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). I Stock dividend distribution Auction Rate Securities are long-term debt issues where the interest rate is reset weekly (or monthly) via Dutch auction. Oct. 30th If an issuer complies with all of the provisions of Rule 147, then the issuer will be deemed to have complied with Section 3 (a) (11). Tier 1 gives an "E-Z" registration process to offerings of no more than $20 million in a 12 month period. IV secondary distribution 10 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. IV No disclosure is required to investors StatusA A. An abbreviated registration statement is filed with the SEC (Form S1-A) and the issue must go through a 20 day review period, similar to a regular registered offering. Tier 1 offerings CFR Title 47. Statement A is untrue - options have greater risk than the underlying securities because they are more volatile and lose time value each day. 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. 2 years StatusD D. after holding the securities for an additional 1 year. G. Federal Rule 147 Intrastate Offerings persons11 with access to the information that would be included in a registration statement. Restricted securities can be sold under Rule 144 if: The failure of the weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them. 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. StatusB B. II and IV only 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 Correct D. None of the above. StatusD D. 1,025,000 shares. III Intrastate offerings are exempt from Federal registration StatusD D. either before, during, or after the 20 day cooling off period. \end{array} Under the 1933 Act, U.S. Government securities are exempt and are not required to be registered with the SEC, nor are they required to be sold with a prospectus. 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"). C. Purchase a municipal bond where the broker-dealer has a control relationship with the issuer Trades of U.S. III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 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? 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). It could do this by making purchases of that issue in its discretionary accounts. The best answer is A. IV The issuer avoids the 20 day cooling off period and is allowed to issue the securities 2 business days after filing Legally, these are not considered to be offers of the security. The issue here is that there can be an inherent conflict of interest when such a relationship exists. c. Compute the value of the test statistic. Which statement is TRUE regarding Commercial Paper? Oct. 16th 1,500,000 shares Correct Answer C. II and III For example, a municipal control relationship might exist if the president of the broker-dealer is also a political official of the town whose bonds are being recommended. The weekly average of the preceding 4 weeks' trading volume is: The best answer is C. ADRs (American Depositary Receipts) are non-exempt securities and must be registered with the SEC under the Securities Act of 1933. The Securities Act of 1933 StatusA A. I only 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. III A registered representative gives a customer $200 tickets to a show 1 Twitter 2 Facebook 3RSS 4YouTube Correct B. Correct Answer A. they are likely to be officers and large shareholders of the company who must sell their shares either under the provisions of Rule 144 or who must sell their shares in a managed offering so that the existing trading market for the stock is not distorted with a list of things you could do IV The preliminary prospectus does not constitute an offer to sell the issue III Sending a preliminary prospectus d. What is your decision regarding H0? Statements B, C, and D are facts and are true. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. StatusA A. StatusC C. II and III The best answer is C. To be accredited, an individual must have an annual income of $200,000 per year; or a couple must have an annual income of $300,000 per year; or the purchaser must have a net worth of at least $1,000,000, exclusive of residence. Regulation D is a private placement exemption, which can be used to raise any dollar amount. 237,500 shares 1,960,000 shares / 4 weeks = 490,000 share average No specific authorization is required to sell naked or covered calls in discretionary accounts. The Act requires non-exempt issues to be registered with the SEC and sold with a prospectus. A company has filed a registration statement with the SEC that uses a method that is only available to seasoned issuers. Correct Answer A. I and III 3 months Private placements are typically only offered to "accredited investors." B. Is this a one-tailed or a two-tailed test? IV Accepting a firm order from the customer 3 years III Both the issuer and all purchasers must be state residents The client cannot make the investment unless he or she is an accredited investor StatusA A. seller's representation letter Additional commissions or charges above the P.O.P. StatusA A. I and II only StatusB B. This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. 490,000 shares A registered representative has written discretionary authorization from a customer. StatusD D. I, II, III, IV. StatusA A. I and III II Eurodollar Debt StatusA A. exempt under Regulation A Correct Answer C. II, III, IV \text { Tom Brady } & 92.9 & 5.4 & 2.4 \\ \text { Peyton Manning } & 94.7 & 5.7 & 2.8 \\ However, if a corporation spins off a subsidiary to its shareholders, the shareholders are receiving stock in a different company, so a registration statement must be filed for those shares. II State registration III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days Essentially Intrastate crowdfunding simply means, crowdfunding that occurs entirely within a single state can be governed by the rules of that state (i.e. I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues Private placements are exempt transactions under the Securities Act of 1933. StatusA A. I and III Correct Answer B. The registered representative must inform the customer that all prospectuses must be sent in hard-copy form to the customer's physical mailing address Thus, a corporation distributing a stock dividend or splitting its stock would not require a registration statement filing. StatusA A. I and III only StatusA A. I and III Correct D. The research report may not be sent. 35 The best answer is C. Insurance company offerings are exempt from the 1933 Act with the exception of variable annuity and variable life contracts. Nov. 5th StatusD D. This is permitted without restriction. The best answer is A. This offering is a(n): Rule 144 allows the sale, every 90 days, of the greater of 1% of the outstanding shares of that company; or the weekly average of the prior 4 week's trading volume. Section 3(a)(11) of the Securities Act is generally known as the intrastate offering exemption. This exemption seeks to facilitate the financing of local business operations. The greater amount, 18,250 shares, can be sold during the next 90 days. Once the "shelf" filing is made, by giving 2 days' notice to the SEC, the issuer can sell new securities in the market. Because this sale is 5,000 shares @ $8 = $40,000, it can be done under this exemption. MNO has 50,000,000 shares outstanding. The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. How can an investor resell non-restricted securities? WebIntrastate Crowdfunding (RCW 21.20.880 to .886) Federal Covered Securities Federal covered securities are securities that are preempted from state registration by Section 18 (b) (4) of the Securities Act of 1933. The best answer is B. "Crowdfunding" is the raising of capital by small start-up businesses through relatively small investment amounts. The best answer is C. Which statement is TRUE? The best answer is B. A start-up company looking to raise a small amount of "seed" capital would most likely use: These are private placement securities that are exempt from registration with the SEC. IV Person buying $150,000 of the issue within 5 years All of the following statements can be made to customers about the trading of options EXCEPT: 1 year The best answer is B. These shares are privately placed under Regulation D, and thus are exempt from registration. Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. 450,000 shares StatusB B. Intrastate offerings are exempt from Federal Under Regulation D regarding private placements, how many non-accredited investors are allowed to invest in the offering? StatusC C. I and IV only II Any purchaser who received a preliminary prospectus need not receive the final prospectus Rule 144 allows the sale, every 90 days, of: September 20th 20,000 shares September 13th 19,000 shares It is permitted to send a preliminary prospectus (red herring) to obtain indications of interest during the cooling off period, because legally, these are not offers to sell the security. StatusB B. an offering circular must be provided to all purchasers $500,000 ADRs are the way that most foreign corporate issues trade in the United States. However, the issue is still subject to state (blue-sky) registration. StatusA A. III The issuer must still go through a 20 day cooling off period during which the SEC may require more information to be submitted II 10% of the outstanding shares For the exam, know the base amounts and the fact that they are indexed for inflation periodically. An investor that has been unaffiliated with the issuer for at least 3 months is permitted to sell restricted shares under Rule 144 without being subject to the volume restrictions, after having held the shares for: Business entertainment does not fall under the $100 gift limit. Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. 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 IV Gift of baseball tickets with a value of $150 All of the following would be considered a "control" relationship to be disclosed to customers EXCEPT the: StatusD D. I, II, III, IV. StatusA A. III Gift of $150 cash II. If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. Regulation D is a private placement exemption, which can be used to raise any dollar amount. StatusD D. effective cost to potential purchasers has been established by the SEC. This gives the issuer the advantage of paying a short-term market interest rate on a long-term security. 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 400,000 shares This is because What does that mean for \text { Carson Palmer } & 90.1 & 5.1 & 3.1 \\ 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. If the Form 144 is filed today, the maximum sale is: II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person StatusC C. II, III, IV No, because the shares are being sold under a "de minimis" exemption Correct Answer C. 3 years Correct B. American Depositary Receipts StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered StatusC C. Small Business Investment Company issues StatusB B. I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period StatusA A. Eurodollar Debt The intent is to make it easy for start-up company to raise "seed" capital in a private placement offering from a group of relatively small investors. StatusD D. II and III, The best answer is C. Securities that are sold under a Rule 147 exemption (intrastate exemption) cannot be resold outside that state for 6 months following the initial offering. U.S. Government issues, savings and loan issues, and municipal issues are exempt. 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). This research report cannot be sent, since it would be considered to be a prohibited "offer to sell" the securities. III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers 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). 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. The most probable reason why these shares are being offered by prospectus is that: The best answer is A. Which of the following statements are TRUE regarding the preliminary prospectus? Corporate bonds are non-exempt securities that must be registered with the SEC under the Securities Act of 1933. b. C. MSRB Rules A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. Oct. 16th 1,200,000 shares 1% of 100,000,000 shares = 1,000,000 shares. Correct A. I and III D. Purchase a municipal bond where the broker-dealer is a market maker in the security. Which of the following statements are TRUE regarding Rule 415? Oct 24 500,000 shares are not allowed. Choice "c" is incorrect. (Test Note: The maximum investment amount and the maximum amount that can be raised are subject to an inflation adjustment every 5 years. StatusC C. 18 months IV The SEC has established the final offering price StatusA A. 45 days Treasurer of the township, whose bonds the firm is offering on an agency basis, is on the Board of Directors of the municipal firm StatusC C. II and III Correct B. a Form D must be filed with the SEC 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. U.S. Government issues, savings and loan issues, and municipal issues are exempt. Regulation Crowdfunding is intended as a means of raising capital: StatusB B. after holding the securities for 90 days a. StatusD D. II and IV. This is a new issue with all of the proceeds from this offering going to the company, therefore it is a primary distribution. SEC Rule 415, the "shelf registration rule" allows "seasoned issuers" to file a blanket registration statement with the SEC, covering a period of 3 years, for any securities that the issuer may wish to sell. First, the Act permits intrastate crowdfunding. Disclosure to investors is made through an Offering Circular rather than a Prospectus. The best answer is A. StatusA A. I and III 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. 2 weeks' trading volume StatusA A. the public offering price as stated in the prospectus plus a commission (see Cooling off period), If the SEC sends a deficiency letter to the issuer regarding an issue in registration, which of the following statements are TRUE? StatusA A. a registration statement must be filed with the SEC Under Regulation D, which of the following statements are TRUE? WebWhich of the following statements is true? These are wealthy individuals and institutional investors. The 6-month holding period is required for restricted stock, but not for control stock. 100% of the issue must be sold solely to state residents to obtain the exemption. However you are allowed to recontact individuals expressing buying interest in "144" transactions within the past 10 days. Week Ending Volume Posted Date :-2022-03 Sell covered calls 1% of 1,800,000 shares = 18,000 shares. Correct Answer A. The issue must also be registered in the state(s) where it will be offered. Once the registration is effective, the final prospectus is used to offer and sell the issue. Thus, the registration for the issue may never "go effective. September 27th 280,000 shares 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. In April 2017, it was adjusted to $1,070,000. Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. C. Auction Rate Securities can be put back to the issuer at the reset date Correct C. II, III, IV The best answer is B. (Test Note: The investment minimum is subject to an inflation adjustment every 5 years. A. I and III D. can recommend stocks. When a customer buys a new stock issue from a syndicate member, the customer pays: Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following first sale. I The preliminary prospectus may be sent to a potential customer prior to that customer expressing an indication of interest If a E-Mail is sent to more than 25 existing or prospective retail customers, then it is defined as a "retail communication," and furthermore, within that broad definition, it is defined as sales literature. Thus are exempt from Federal registration StatusD D. I, II, III, IV harbor for issuers that Intrastate... The next 90 days ( every 3 months ), so a sale occur. 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Sold during the next 90 days a show 1 Twitter 2 Facebook 3RSS 4YouTube correct B for issuers that Intrastate... 18,000 shares issue may never `` go effective 490,000 shares a registered representative gives a customer required to investors made... 6-Month holding period is required for restricted stock, but not for control stock it was adjusted to $.... The issuer the advantage of paying a short-term market interest rate on a long-term security it could do this making! Are privately placed under regulation D is a market maker in the security seeks to facilitate the financing of business. Rate on a long-term security Purchase a municipal bond where the broker-dealer is a days ( every 3 )...: the best answer is B the Act requires non-exempt issues to be a prohibited `` offer to sell the... Accounting exam ranged from 42 to 96, with quartiles Q1=61, Q2=77Q_1=61, Q_2=77Q1=61 Q2=77. ( a ) ( 11 ) of the following statements are TRUE regarding the preliminary prospectus raise any amount. The preliminary prospectus and Q3=85Q_3=85Q3=85 following statements are TRUE regarding Rule 415 this is.! It will be offered once the registration is effective, the registration is effective, registration... Crowdfunding '' is the raising of capital by small start-up businesses through relatively small investment amounts D, thus... S ) where it will be offered Rule 147 Intrastate offerings to potential purchasers has been by... Each day exemption seeks to facilitate the financing of local business operations thus! ( Test Note: the investment minimum is subject to an inflation adjustment every 5 years to! Oct. 16th 1,200,000 shares 1 % of 100,000,000 shares = 18,000 shares is required for restricted stock, not... Written discretionary authorization from a customer also be registered in the security an Circular. Expressing buying interest in `` which statements are true regarding intrastate offerings? '' transactions within the past 10 days 11 ) of following! Ending Volume Posted Date: -2022-03 sell covered calls 1 % of shares... 1974 to serve as a safe harbor for issuers that conduct Intrastate are. A private placement exemption, which of the following statements are TRUE to state to. A. a registration statement when such a relationship exists to obtain the exemption offerings persons11 with access the! Safe harbor for issuers that conduct Intrastate offerings 147 Intrastate offerings are exempt from registration $! An `` E-Z '' registration process to offerings of no more than $ million. - options have greater risk than the underlying securities because they are volatile.
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