The Form 144 is simply a notification to the SEC that stock will be sold in compliance with the Rule - the SEC does not approve of the sale. StatusD D. II and IV. Private placements are typically only offered to "accredited investors." Industrial Company issues H0:12;H1:1>2, the federal regulation aimed at curbing manipulation and fraud in the new issue market. A. I and III Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode? III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered Listed stocks, and stock options are non-exempt issues that must be registered with the SEC. I they are sold on a dealer basis I 500 shares Which are permitted under FINRA rules? 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 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. If an E-Mail is sent to 25 or fewer existing or prospective retail customers, it is defined as correspondence. This market is not available to individuals. To offer a private placement, which statement is TRUE? The issuer must file a Form D with the SEC within 15 days of the offering to claim the exemption. Source: Sports lilustrated 2009 Almanac, .158\rho .158.158. ", Which of the following statements are TRUE about Rule 147? III Sending a preliminary prospectus WebAll of the following statements regarding short term negotiable certificates of deposit are correct EXCEPT: A. the minimum denomination is $100,000B. II Couple earning $300,000 per year If a corporation merges with another publicly held company, a new corporation is being created, and a registration statement must be filed as well. 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. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. 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. 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). No specific authorization is required to sell naked or covered calls in discretionary accounts. These are private placement securities that are exempt from registration with the SEC. The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. D. Treasurer of the township, whose bonds the firm is offering on a principal basis, is on the Board of Directors of the municipal firm. Since one state is involved, the issuing company does not have to The interest rate on an Auction Rate Security is reset weekly or monthly II unregistered distribution Under Rule 147, intrastate offerings cannot be resold out of state for how long following completion of the initial offering? The greater amount is 1% of outstanding shares, or 250,000 shares. II unregistered distribution 1 Twitter 2 Facebook 3RSS 4YouTube StatusD D. I, II, III, IV. 525,000 shares These are private placement securities that are exempt from registration with the SEC. The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 months fully paid. StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus StatusA A. I and II only Common carriers, small business investment companies, and benevolent associations are all exempt. For the exam, know the base amount and the fact that it is indexed for inflation periodically. Regulation Crowdfunding is intended as a means of raising capital: StatusB B. an offering circular must be provided to all purchasers It requires the registration of broker-dealers and self-regulatory organizations (the exchanges). Which of the following are non-exempt issues under the Securities Act of 1933? II State registration The best answer is A. 485,000 shares StatusA A. Eurodollar Debt Restricted securities can be sold under Rule 144 if all of the following conditions are met EXCEPT: To qualify for the intrastate offering exemption, a company must: The intrastate offering exemption does not limit the size of the offering or the number of purchasers. \text { Player } & \text { Rating } & \text { TD } \% & \text { Inter } \% \\ 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 client cannot make the investment unless he or she is an accredited investor The best answer is C. Bankers Acceptances are a money market instrument used to finance imports and exports. 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. II Accepting an indication of interest from the customer StatusC C. 506,250 shares StatusA A. I and II only Correct Answer B. Incorrect Answer C. II and III II Variable annuity contracts Incorrect Answer B. I or IV, whichever is greater A. After holding them for 3 months fully paid, the President wishes to sell the shares. B. I and IV Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. Correct D. II and IV. StatusD D. The registered representative must forward the e-mail to the branch manager for handling. StatusC C. a Form 144 must be filed with the SEC StatusB B. II and III only Trades of U.S. Thus, issuers have a way of selling securities to these investors quickly without incurring the costs of SEC registration; and the QIB knows that it can always sell that investment to another QIB without needing to register the issue with the SEC. No specific authorization is needed to buy securities for a discretionary customer account where the firm is a market maker in the security - no control relationship exists with the issuer in this case. Correct A. I and III The best answer is D. 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. The Form 144 is filed on Monday, September 28th. Which statements are TRUE regarding intrastate offerings? ARSs are available from both corporate and municipal issuers. Incorrect Answer B. StatusD D. after holding the securities for 3 years. Intrastate offerings are exempt from: StatusA A. seller's representation letter The weekly average of the preceding 4 weeks' trading volume is: 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 III Person with a net worth of $1,000,000 exclusive of residence Conclude your report Restricted securities can be sold under Rule 144 if: For the exam, know the base amounts and the fact that they are indexed for inflation periodically. 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. Q2. Correct B. The best answer is B. Correct B. I, II, III The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. The Form 144 is filed on Monday, October 5th. StatusA A. a. 400,000 shares IV Soliciting orders to buy the issue a. c. Compute the value of the test statistic. StatusC C. The research report may only be sent to customers who have bought new issues within the preceding 12 months Assuming that all other requirements of the rule are met, the maximum sale amount is: Which of the following statements are TRUE regarding Rule 144A? The best answer is D. Rule 144 allows the sale of 1% of the issuer's outstanding shares or the weekly average of the preceding 4 weeks' trading volume (whichever is greater). ), The maximum amount that can be invested by a client in a single issue under Regulation Crowdfunding is: 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 The prospectus is the disclosure document for new issues that are not exempt from registration. C. I and IV Securities that are sold under a Rule 147 exemption (intrastate exemption) canno hich of the following securities are eligible for trading by the Federal Reserve? WebWhich statements are TRUE regarding intrastate offerings? I American Depositary Receipts II Rule 144A limits the amount of restricted securities that can be sold in the public markets New issues can only be offered and recommended via a prospectus (unless the security is exempt). Correct C. sales are limited to purchasers who are "resident" in the state where the issuer resides Rule 144 includes a "de minimis" exemption, permitting the sale every 3 months of 5,000 shares or less, worth $50,000 or less, without having to file a Form 144. StatusD D. I, II, III, IV. Correct Answer C. II, III, IV This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. IV Proceeds from the sale of 300,000 shares will go to the company Correct Answer A. StatusC C. 3 Regulation D On November 23rd, an officer of MNO Corporation wishes to sell stock under Rule 144. $500,000 The greater amount, 18,250 shares, can be sold during the next 90 days. The announcement appears in the Wall Street Journal. III Intrastate offerings are exempt from Federal registration A registered representative has written discretionary authorization from a customer. The best answer is C. Rule 144A allows issuers to sell minimum $500,000 units of private placements to so-called "QIBs" - Qualified Institutional Buyers; and these QIBs can trade the units with other QIBs. Which of the following securities is NOT exempt from the Securities Act of 1933? Anyone can purchase a Regulation A offering - it is not limited solely to accredited (wealthy) investors. trading occurs in the secondary marketD. StatusA A. The best answer is B. StatusD D. I, II, III. ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? It controls exchangesonce the securities are in the market. StatusB B. II and IV StatusA A. I and III StatusB B. II and IV StatusD D. 24 months, The best answer is B. No, because the shares are being sold under a "de minimis" exemption A company has filed a registration statement with the SEC that uses a method that is only available to seasoned issuers. As long as the firm has appropriate compliance procedures in place, correspondence is subject to "post-use review and approval." StatusD D. Regulation D. The best answer is C. The previous weeks' trading volumes are: If any of the securities are offered or sold to even one out-of-state person, the exemption may be lost. Eurodollar bonds are sold outside the U.S. and thus do not fall under the Act. 485,000 shares Your firm cannot act as a market maker in "144" shares. StatusC C. I, II, and IV Correct A. immediately 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. Included are investment companies, insurance companies, banks, trust funds, employee benefit plans, and employee retirement funds. It simply notifies the SEC that the issue is being offered in compliance with the exemption. StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. A registered representative has prepared a research report about a new issue that is "in registration." securities issued by railroads, airlines, trucking companies that are subject to regulation by the ICC - Interstate Commerce Commission (now part of the Department of Transportation). the SEC rule that requires issuers to file registration statements with the SEC when securities are created due to such actions as a merger, divestiture, or spin-off. ABC corporation has 100,000,000 shares outstanding. Correct A. 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 A. -Intrastate offerings are subject to State registration -Intrastate offerings are exempt from Federal registration The best answer is C. Correct B. StatusD D. None of the above. 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