7.3 nonexempt registration
Six days into the cooling-off period, an issuer receives a deficiency letter from the Securities and Exchange Commission (SEC) requesting clarification and corrections. Once the issuer submits these, and assuming that they satisfy the deficiency, the cooling-off period will resume. With no other deficiencies arising, the issue should become effective in
14 days
After the issuer files a registration statement with the Securities and Exchange Commission (SEC), the time known as the cooling-off period begins. This allows a registration to become effective as early as
20 calendar days after the date the SEC has received it
Which of the following would most closely match the meaning of a red herring?
A preliminary prospectus
A company's management team has agreed to issue additional shares of common stock in part to provide an employee stock ownership plan. It is agreed the issuance of the stock is not urgent and can wait until more favorable market conditions exist. What type of registration is most suitable under these conditions?
A shelf registration
Regarding a shelf registration filed with the Securities and Exchange Commission (SEC), which of the following statements are true?
A supplemental prospectus must be filed before each sale and Portions of a shelf offering can be sold over a three-year period without having to reregister the security.
A tombstone advertisement would be expected to include all of the following information except
Any inherent risks associated with the offering or the issuer offering the securities
Issuance and trading of securities are regulated at more than one governmental level. These would include regulations at which of the following?
Federal level and state level
When an investor receives a final prospectus, the expectation should be that one of the following would not be found. Which is it?
When an investor receives a final prospectus, the expectation should be that one of the following would not be found. Which is it?
Which of the following situations may not be disclosed to a potential buyer while a security is in registration
a brokerage report shows the security is properly undervalued
A company is already public with several major stockholders. The company proposes an offering where sale proceeds for shares being sold to the investing public will go to some of the existing stockholders who want to divest of their shares as well as to the corporation. This is
a combination offering
A new registered representative receives a memo discussing the distribution of a red herring. The registered representative knows that the memo is referencing
a preliminary prospectus
During the cooling-off period of a new registration filed with the securities and exchange commission
a red herring may be given to prospective investors
An offering in which one or more stockholders in the corporation are selling all or a portion of their own shares to the investing public for the first time is known as
a secondary offering
During the cooling off period, underwriters would be allowed to do all of the following except
advertise the issue
Sales for new issues of securities may be solicited
after the cooling-off period
Which of the following will not be found in a final prospectus
agreement among underwriters
An indication of interest given by an investor during the cooling-off period is
an investor's declaration of potential interest in purchasing some of the issue after the security comes out of registration
a tombstone announcement may contain all of the following except
an offer to sell the securities
regarding primary and secondary offerings, which of the following are true
an offering can be a combination of primary and secondary/ an additional primary offerings is a primary offering
tombstone ads
are permitted before the effective date
A tombstone advertisement placed before the effective date can
be placed by the issuer directly or by the underwriters
during the cooling-off period, underwriters may not
distribute sales literature of advertising material
Which of the following would be allowed during the cooling off period
distributing a red herring
After the filing of a registration for a new issue with the SEC, and still in the registration's cooling off period, broker-dealers may
give a red herring to prospective investors
A preliminary prospectus is used to solicit
indications of interest before the effective date
An underwriting group is currently assisting an issuer with the preparation and filing of the registration statement for a new issue. Who is responsible for the accuracy of the information within the registration statement?
issuing corporation
An investor requests a preliminary prospectus for a new issue. Regarding the document which of the following is true?
it is made available between the registration date and the effective date
Rules to protect the investing public during the public offering process include all of the following except
limiting the number of shares of an initial public offering that may be purchased by the issuing company's employees
The statement "These securities have not been approved or disapproved nor have any representations been made about the accuracy or the adequacy of the information" is
mandated to be in the final prospectus by the Securities and Exchange Commission (SEC).
A preliminary prospectus (red herring)
may be used to gather indications of interest
Which of the following best describes a final prospectus
meets the full and fair disclosure requirements of the securities act of 1933
A final prospectus contains all of the following except
SEC approval
indications of interest taken during the cooling-off period are
nonbinding on the issuer and underwriters and nonbinding on the investor
During the cooling-off period, underwriters of new securities may
not accept orders to purchase shares and accept indications of interest regarding potential purchases of shares
State registration is not required if the transaction is exempt. An example of an exempt transaction would be
one that is unsolicited
Which of the following would be allowed during the cooling off period
placing a tombstone ad
If it finds that the registration statement needs revision, expansion, or to have corrections made, the Securities and Exchange Commission (SEC) may suspend the review of the new issue and issue a deficiency letter. Once the issuer submits a corrected registration statement, the 20-day cooling-off period
resumes where it had left off
Which of the following would be applicable to nonexempt securities (those that must be registered) being offered to the public by a corporate issuer?
securities act of 1933 and prospectus
During the 20-day cooling-off period
solicitations of sales may not be made and deficiency letters, if issues, are sent to the issuer
During the cooling off period, underwriters would be allowed to do all of the following except
take orders
Which of the following would be allowed during the cooling off period
taking indications of interest
Regarding the registration statement filed with the Securities and Exchange Commission (SEC) when new securities are to be issued, all of the following are true except
the accuracy and adequacy of the registration documents is the responsibility of the underwriters
When the Securities and Exchange Commission (SEC) clears securities for sale to the investing public, this is
the effective date
The access equals delivery rule applies to
the final prospectus and aftermarket delivery obligations
The prospectus delivery requirement, access equals delivery, is satisfied when
the final prospectus has been filed with the Securities and Exchange Commission (SEC) and is available on the SEC's website for investors to see.
Which of the following would not be expected to be found in a tombstone advertisement for a new issue?
the intended purpose for which to use the sales proceeds
An underwriter is placing a tombstone advertisement for a company's new issue. A prospective investor might expect to see all of the following information on the ad except
the names of the company's officers
Which of the following acts requires the registration of most new issues
the securities act of 1933
the federal law requiring companies offering public equity or debt securities to provide a prospectus to investors is known as
the securities act of 1933
Securities regulations that are called blue-sky laws refer to those at
the state level
All of the following are true of tombstone advertisements except
they are mandatory and must be placed during the cooling-off period
Underwriters who are assisting an issuer in bringing securities to the investing public can do which of the following between the time the registration was filed with the Securities and Exchange Commission (SEC) and the effective date?
Distribute a preliminary prospectus to the investing public
Regarding the issuance of new securities to the public, which of the following is true?
The securities act of 1933 provides criminal penalties for fraud
Which of the following statements with regard to the issuance of securities is true?
The securities act of 1933 provides criminal penalties for fraud