The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. The only way to resell them is in a "private transaction. The best answer is A. Incorrect Answer D. I, II, III, IV. I Real Estate Investment Trusts A new issue offering to a maximum of 35 non-accredited investors that has not been registered with the SEC is: StatusB B. Benevolent Association issues StatusD D. there are no minimum income or net worth standards for individuals wishing to invest. If an officer or selling shareholder wishes to sell a large amount of shares (in excess of Rule 144 limits) of that company, it must register the sale with the SEC, use an underwriter to manage the sale of the shares, and sell with a prospectus. IV Publishing a tombstone announcement Common carrier issues such as railway issues are exempt under the Securities Act of 1933 because they were regulated by the Interstate Commerce Commission (I.C.C.) Since the shares are being offered at the current market price of the stock, Choice B is false. StatusD D. either before, during, or after the 20 day cooling off period. StatusB B. II and IV Learning Center through glencoe.com StatusD D. broker's representation letter. When the Securities and Exchange Commission sets the effective date for a new issue in registration, this means that the: Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. The best answer is B. Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. Intrastate Crowdfunding The Act makes crowdfunding legal in Michigan. 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). 1% of 25,000,000 shares = 250,000 shares. (see Non-exempt security, Prospectus). StatusB B. III and IV only The best answer is B. Rule 147 StatusD D. each sale is limited to the greater of 1% of the outstanding shares; or the weekly average of the prior 4 weeks' trading volume. The previous weeks' trading volumes are: II. Tier 2 requires more detailed information, including audited financial statements, and can be used for offerings of up to $50 million. Thereafter, they can be resold interstate. StatusB B. III and IV only Under Rule 144, no filing is required if the sale amount every 90 days does not exceed: III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 I Sending a customer a "red herring" preliminary prospectus Industrial companies are not exempt from the Securities Act of 1933. Source: Sports lilustrated 2009 Almanac, .158\rho .158.158. A spouse is considered an affiliated person. Regulation Crowdfunding is intended as a means of raising capital: StatusA A. I and II only Auction Rate Securities are long-term instruments 3 years III Merger with another publicly held company StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus September 20th 20,000 shares StatusA A. I and II only The registration statement must be filed before the securities can be sold and it must contain full and fair disclosure of the company's business history, financial status, management, and planned use for the proceeds from the sale of the new securities. (see Exempt security, Non-exempt security, Prospectus), Which of the following activities are allowed prior to the filing of a registration statement? StatusA A. 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. StatusB B. II and IV The best answer is A. 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. StatusB B. The sample mean is 2.59. Oct. 16th 1,200,000 shares Your firm cannot act as a market maker in "144" shares. StatusA A. I and III The Form must be filed by the seller at, or prior to, with the placement of the sell order. The best answer is D. This is a combined primary and secondary distribution. MNO has 50,000,000 shares outstanding. StatusC C. II and III 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. E-mails to customers can be sent from a registered representative's branch office (but they cannot be sent from a registered representative's home). They are targeted at small investors. C. I and IV Securities that are sold under a Rule 147 exemption (intrastate exemption) canno Week Ending Volume 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. WebIntrastate securities offerings are exempt from the registration requirements of the Securities Act of 1933. 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. A. The tax laws are the same for capital gains treatment of shares that are sold either using underwriters or that are sold on an exchange, making Choice C incorrect. II Gift of baseball tickets with a value of $75 III Both the issuer and all purchasers must be state residents (Test Note: The investment minimum is subject to an inflation adjustment every 5 years. \text { Carson Palmer } & 90.1 & 5.1 & 3.1 \\ ", Which of the following statements are TRUE about Rule 147? The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. Under Rule 147, intrastate offerings cannot be resold out of state for how long following completion of the initial offering? Correct C. Rule 144A issues trade in the PORTAL market from QIB to QIB Correct C. I and IV Correct C. II and III StatusA A. An indication of interest is taken during the 20 day cooling off period before a new issue's registration becomes effective. The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. StatusA A. I and III The most probable reason why these shares are being offered by prospectus is that: I Commercial Paper The effective date occurs once the 20-day cooling off period has elapsed without a deficiency notice being sent by the SEC to the issuer of the securities. StatusA A. I and III Incorrect Answer A. These shares are privately placed under Regulation D, and thus are exempt from registration. StatusB B. I and IV Under the advertising rules of the exchanges, any statements made must be truthful, and not exaggerated. StatusB B. Correct A. I and III October 4th 16,000 shares I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues StatusD D. I, II, III, IV. IV Rule 144A permits issuers to sell tradeable private placement units to individual investors c. Compute the value of the test statistic. They are an exempt security under the Securities Act of 1933 and can be sold without a prospectus. StatusB B. III and IV only 750,000 shares Regulation A is an "EZ" registration method for offerings of up to $50 million. ARSs are available from both corporate and municipal issuers. 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. III primary distribution Nov. 5th $100,000 Rule 144 requires that restricted securities be sold on an agency basis only. 1% of 50,000,000 shares = 500,000 shares. IV Up to 6 sales per year are allowed I Sale of the issue However, the issue is still subject to state (blue-sky) registration. StatusD D. any price since this is a negotiated market offering. The best answer is B. Which of the following are defined as "accredited investors" under Regulation D? The Securities Act of 1933 950,000 shares / 4 weeks = 237,500 shares A maximum of 35 non-accredited investors are permitted in a private placement for the transaction to be exempt under the Securities Act of 1933. StatusA A. I and III StatusD D. $5,000,000, The best answer is A. StatusB B. II only The amendments also seek to close gaps and reduce complexities in the exempt offering framework that may impede access to investment opportunities for investors and access to capital for businesses and StatusA A. I and II only The client cannot make the investment unless he or she is an accredited investor StatusA A. D. II and IV. Which statement is TRUE about insurance coverage on customer brokerage accounts maintained at banks registered solely as municipal securities dealers? StatusA A. I and III StatusB B. I and IV III with no registration with the SEC Anyone can purchase a Regulation A offering - it is not limited solely to accredited (wealthy) investors. StatusA A. I and II StatusC C. I, II, III What does that mean for Explanation: In the situation being described the statement that would be true is that the customer is prohibited from buying these securities. Which statement about Auction Rate Securities is FALSE? 1% of 1,800,000 shares = 18,000 shares. StatusA A. I A Prospectus must be delivered to all purchasers There is no representation required on the part of the buyer - when the restricted stock is sold through the rule, the buyer receives "clean" unrestricted shares from the transfer agent. II unregistered distribution IV A registered representative accompanies a customer to a show, for which the representative paid $200 for the tickets II Stock split StatusD D. $1,000,000,000 of assets that it invests on a discretionary basis. 17,000 shares There are 2 "tiers" to the rule. Intrastate Offerings Defined An intrastate offering can only be purchased in the state it is issued. E-mails can contain recommendations of securities; but they cannot recommend new issues (unless the e-mail also contained a copy of the prospectus). 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. There is no minimum purchase amount that makes an individual accredited. Oct 31 StatusD D. II and IV. StatusA A. a registration statement must be filed with the SEC The best answer is C. Bankers Acceptances are a money market instrument used to finance imports and exports. In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. 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. Are TRUE about insurance coverage on customer brokerage accounts maintained at banks registered solely municipal... 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