Registration of Securities

XYZ Corp. will issue a new security and distribute it through a public offering. Under the Securities Act of 1933, which of the following is NOT required to be included in XYZ's registration statement? A) The name and address of XYZ's personnel manager. B) The name and address of Jan Michael, who owns 11% of XYZ's stock. C) The identity of the underwriter. D) An estimate of the proceeds that will be raised through the offering and how that money will be used.

A) The name and address of XYZ's personnel manager.

Under the USA, each of the following materials may be distributed if an issuing company has applied for registration but is not yet cleared for sale EXCEPT: A) an application with a request for a down payment. B) a preliminary prospectus. C) a red herring. D) tombstone advertising.

A) an application with a request for a down payment.

Rule 482 of the Securities Act of 1933 permits the use of an omitting prospectus if it does not: A) contain an application to purchase shares of the fund. B) describe how and where to obtain the fund's prospectus. C) make reference to the mutual fund's past performance. D) omit a statement of the fund's expense ratio.

A) contain an application to purchase shares of the fund.

The first of the federal securities acts was the Securities Act of 1933. This act requires persons selling a new offering to their clients to: A) deliver an effective (final) prospectus no later than with confirmation of the sale. B) deliver a copy of the registration statement no later than with confirmation of the sale. C) be properly registered prior to making the offer. D) deliver a preliminary (red herring) prospectus prior to the sale.

A) deliver an effective (final) prospectus no later than with confirmation of the sale.

Under federal law, the statute of limitations for civil liability is: A) one year after discovery or three years after the action, whichever is sooner. B) two years after the action. C) one year after discovery of the action. D) two years after discovery or three years after the action, whichever is sooner.

A) one year after discovery or three years after the action, whichever is sooner.

Under the Securities Act of 1933, a registration statement for a security must be signed by: A) the issuer's chief executive officer, chief financial officer, and a majority of the issuer's board of directors. B) the issuer's chief executive officer and the underwriter. C) a majority of the issuer's board of directors and the underwriter. D) a majority of the issuer's board of directors only.

A) the issuer's chief executive officer, chief financial officer, and a majority of the issuer's board of directors.

Under the Securities Act of 1933, all of the following must sign a registration statement for a new issue of nonexempt securities EXCEPT: A) the managing underwriter of the issuer. B) the chief executive officer of the issuer. C) a majority of the members of the board of directors. D) the chief financial officer of the issuer.

A) the managing underwriter of the issuer.

Under the Securities Act of 1933, a registration statement for a security generally becomes effective how many days after it is filed? A) 30 days. B) 20 days. C) 10 days. D) 31 days.

B) 20 days.

Which of the following statements regarding a red herring is NOT true? A) A red herring is used to accept indications of interest from investors. B) An agent may accept funds to be placed in escrow until the effective date if the request to do so is made by a potential purchaser. C) The final offering price does not appear in a red herring. D) Additional information may be added to a red herring at a later date.

B) An agent may accept funds to be placed in escrow until the effective date if the request to do so is made by a potential purchaser.

ABCO Materials, Inc., is in the process of raising money from the public for the first time. Which of the following must be disclosed in ABCO's registration statement filed with the SEC? I.Biographical sketches of each of the members of the board of directors as well as ABCO's principal officers. II.Expected use of the proceeds of the offering. III.Performance of the company's stock over the last five years or since the founding of the company, whichever is the shorter period. IV.Expected range of the public offering price. A) III and IV. B) I, II and IV. C) II and III. D) I and IV.

B) I, II and IV.

An investment company offering securities registered under the Act of 1933 may make which of the following statements? I."The SEC has passed on the merits of these securities as an investment.". II."The SEC has released our securities for sale to the public.". III."The SEC has passed on the accuracy of the information in our prospectus.". IV."The SEC has declared this prospectus effective.". A) I and IV. B) II and IV. C) II and III. D) I and III.

B) II and IV.

Charlotte is an agent of Gibraltar Securities. Her most active customer told Charlotte that he is thinking about buying 10,000 shares of a retailer's stock for which Gibraltar will be participating in the underwriting syndicate. The SEC release date for the stock is anticipated within 10 business days. What may Charlotte send to the client today? A) The preliminary prospectus and a reprint of a popular advertisement placed by the issuing corporation. B) The preliminary prospectus. C) The final prospectus. D) An order request.

B) The preliminary prospectus.

Which of the following describe indications of interest secured during the 20-day cooling-off period? I.Binding on the customer. II.Nonbinding on the customer. III.Binding on the broker-dealer. IV.Nonbinding on the broker-dealer. A) II and IV. B) I and IV. C) I and III. D) II and III.

A) II and IV.

In reviewing prospectuses and registration statements, the SEC: A) does not approve or disapprove of the issue. B) certifies the accuracy of the disclosures made in a prospectus. C) passes on the merits of a particular security covered by a registration statement. D) guarantees the adequacy of the disclosures made in a prospectus.

A) does not approve or disapprove of the issue.

Under the Securities Act of 1933, the Securities and Exchange Commission has the authority to: I.issue stop orders. II.approve new issues. III.review standard registration forms. A) I and II. B) II and III. C) I and III. D) I, II and III.

C) I and III.

Under the Securities Act of 1933, when registering securities with the SEC, who must sign the registration statement? I.The chief executive officer (CEO). II.The chief operating officer (COO). III.A majority of the board. IV.The chief financial officer (CFO). A) I, II and IV. B) I and IV. C) I, III and IV. D) I, II, III and IV.

C) I, III and IV.

According to the Securities Act of 1933, all of the following statements are true EXCEPT: A) a sale of securities includes any security given as a bonus for making a purchase. B) the SEC has the authority to conduct formal investigations in the interest of investor protection. C) a futures contract is not considered a security under the act. D) an omitting prospectus may not be used as an advertisement.

C) a futures contract is not considered a security under the act.

An agent must deliver a preliminary prospectus for an IPO within a prescribed period of time to any person who has: A) regularly purchased similar new issues in the past. B) attended the due diligence meeting. C) been approached about buying this new issue while the issue is in registration. D) has an account with his firm.

C) been approached about buying this new issue while the issue is in registration.

A broker-dealer is the lead underwriter in a new issue. During the period this new security issue is in registration, which of the following will usually be distributed? I.Subscription forms enabling clients to place a down payment on the issue. II.A red herring prospectus. III.The company's latest research report on that stock. IV.Indication of interest forms. A) II and III. B) I and II. C) III and IV. D) II and IV.

D) II and IV.

Which of the following statements is TRUE regarding the civil liability provisions of the Securities Act of 1933? A) The statute of limitations for civil suits is three years from the date of discovery. B) Only those who actually signed the registration statement are exposed to potential liability. C) Purchasers may waive their rights to suit under the civil liability provisions if done so by the purchase contract. D) If the registration statement contains misrepresentations that were made deliberately, criminal penalties, in addition to civil ones, may be levied.

D) If the registration statement contains misrepresentations that were made deliberately, criminal penalties, in addition to civil ones, may be levied.

XYZ Corporation is registering a new issue of common stock. A final prospectus must be delivered within the statutory time limits to: A) any person who is employed by the issuer. B) any person who has submitted an indication of interest. C) any person solicited by a registered agent. D) any person who purchases shares of the issue.

D) any person who purchases shares of the issue.

The federal Securities Act of 1933 has certain requirements for those selling new issues. One of those requirements is to: A) deliver a copy of the prospectus prior to the sale. B) deliver a preliminary prospectus to any person who has purchased the new issue. C) be properly licensed prior to making the offering. D) deliver a final prospectus no later than with confirmation of the sale.

D) deliver a final prospectus no later than with confirmation of the sale.

Rule 482 of the Securities Act of 1933 deals with: A) intrastate offerings. B) private placements. C) registration under coordination. D) omitting prospectuses.

D) omitting prospectuses.

When a new issue of common stock is in registration, registered representatives are permitted to: A) receive indications of interest along with a good faith deposit. B) accept tentative orders. C) furnish prospects with a final prospectus. D) send a copy of the preliminary prospectus.

D) send a copy of the preliminary prospectus.

Under the Securities Act of 1933, a registration statement of an issuer must contain all of the following information EXCEPT: A) the identity of the officers and directors and the extent of their holdings in the issuer. B) the current balance sheet and profit/loss statements. C) the business of the issuer. D) the names of all the owners of the company's stock.

D) the names of all the owners of the company's stoc