Regulations: Securities Act of 1933

What are the requirements of Rule 144?

(1) Holding Period: For a public co., the holding period is 6 months, & it begins from the date a holder purchased and fully paid for securities. For a co. that doesn't have to make filings with the SEC, the holding period is 1 year. This req. applies primarily to restricted securities, not control securities (2) Current Public Information: Adequate & current info about the issuing co. must be publicly available before a sale. (3) Trading Volume Formula: If a co.'s stock is listed on a stock exchange, only the greater of 1% of total outstanding shares, or the avg. of the previous 4 week trading volume can be sold. If a selling party is an affiliate of a co., he cannot resell more than 1% of the total outstanding shares during any 3 month period (4) Ordinary brokerage transactions: All of the normal trading conditions that apply to any trade must be met. Brokers cannot solicit buy orders, and they're not allowed to receive commissions in excess of their normal rates (5) Filing a Notice of Proposed Sale With the SEC: If you're an affiliate who plans to sell more than 5,000 shares or $50,000 worth of securities in any 3 month period, you'll need to file a notice with the SEC on Form 144

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. This amount can be sold how many times a year?

4

In order to sell restricted stock under the provisions of Rule 144, the stock must be held, fully paid, for:

6 months

What is a Private Placement Transaction?

An exempt transaction under Regulation D of The Securities Act of 1933 that can be sold without a prospectus to an unlimited number of accredited investors, but only to a max of 35 non-accredited investors. In reality, private placements are sold to a relatively small number of institutional investors.

A customer who has his primary residence in Colorado, has a vacation home in Montana. An intrastate offering is being made in the state of Montana. Which statement is TRUE regarding the customer purchasing this securities offering? A. The customer is permitted to buy these securities B. The customer is prohibited from buying these securities C. The customer can buy the securities if he spends at least 2 weeks per year in the state of Montana D. The customer can buy the securities if he files an affidavit of domicile in the state of Montana

B. The customer is prohibited from buying these securities. To purchase an intrastate offering, the purchaser must be a primary resident of that state.

Which offering of securities under Regulation A is subject to purchase limitations? A. Tier 1 offerings B. Tier 2 offerings C. Both Tier 1 and Tier 2 offerings D. Neither Tier 1 nor Tier 2 offerings

B. Tier 2 offerings

Which of the following is defined as an "accredited investor" under Regulation D? A. Non-profit organization with assets in excess of $2,000,000 B. Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered D. An individual investor who buys $2,000,000 of the offering

B. Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person

Under the Securities Act of 1933, Credit can be extended on new issues: A. immediately after the offering is complete B. after 30 days have elapsed from the completion of the offering C. after 60 days have elapsed from the completion of the offering D. after 90 days have elapsed from the completion of the offering

B. after 30 days have elapsed from the completion of the offering

Under Rule 144, a customer wishing to sell must file the 144 "Notice of Sale" with the SEC: A. 10 business days prior to the placement of the sell order B. at, or prior to, the placement of the sell order C. 10 business days after the placement of the sell order D. 90 days after the placement of the sell order

B. at, or prior to, the placement of the sell order

Under the Securities Act of 1933, "Access equals delivery" means that any purchaser of a new securities issue offered by prospectus: A. must be delivered a paper copy of the prospectus, at or prior to confirmation of sale B. must be delivered an electronic copy of the prospectus, at or prior to confirmation of sale C. can be delivered an electronic copy of the prospectus in lieu of a paper copy if the member firm knows that the customer has internet access D. can be delivered a paper copy of the prospectus in lieu of an electronic copy if the member firm knows that the customer has internet access

C. can be delivered an electronic copy of the prospectus in lieu of a paper copy if the member firm knows that the customer has internet access

Exempt or not exempt from the Securities Act of 1933: Foreign Currency Contracts

Exempt

Exempt or not exempt from the Securities Act of 1933: Foreign Government debt

Exempt

Exempt or not exempt from the Securities Act of 1933: Municipal debt

Exempt

Exempt or not exempt from the Securities Act of 1933: Private Placements

Exempt

Exempt or not exempt from the Securities Act of 1933: Small Business Investment Company

Exempt

Exempt or not exempt from the Securities Act of 1933: U.S. Government debt

Exempt

Regulation A, Tier I offerings:

Good for offerings of up to $20 million raised within a 12 month period, however audited financial statements are not required.

Regulation A, Tier II offerings:

Good for offerings of up to $50 million raised within a 12 month period, but audited financial statements must be filed

Under the Securities Act of 1933, prior to the filing of a registration statement, which of the following activities is (are) permitted? I A member firm signing a syndicate agreement to become part of the underwriting group for the issue II A member firm distributing preliminary prospectuses for the issue to customers III A member firm taking indications of interest for the issue from customers IV A member firm selling the issue to customers

I Only- prior to the filing of a registration statement, the issue cannot be promoted in any manner - so the use of a preliminary prospectus to take indications of interest is prohibited; as is selling the issue. Once the registration statement is filed, the issue enters the 20 day cooling off period. At this point, a preliminary prospectus can be used to take indications of interest, but the issue cannot be sold. Once the registration is effective, the issue can be sold with the prospectus. There is no prohibition on the underwriter joining the syndicate or selling group prior to the filing of the registration statement, since this does not involve offering the issue to the public.

Under the Securities Act of 1933, which of the following statements are TRUE about Regulation A offerings? I The maximum offering amount permitted under the exemption is $50,000,000 within a 12 month period II An offering circular must be provided to all purchasers III Sales are limited to purchasers who are "resident" in the State where the Issuer resides IV The issue can only be sold to a maximum of 35 non-accredited investors

I and II

A wealthy customer has been asked by his neighbor to invest in the private placement of a "start-up" technology company as a venture capital investor. This is the first time that the customer has considered such an investment. The customer contacts his registered representative and asks: "Aside from the investment risk associated with a "start-up" company, what are the other issues that I should consider before making such an investment." The registered representative should inform the customer that: I there is no public resale market for these securities unless the company "goes public" and is current in SEC filings II these securities can only be sold to customers that have a minimum net worth of $100,000,000 III these securities must be held for at least 6 months before a public resale is permitted under the provisions of Rule 144 IV after issuance, these securities can only be traded in the PORTAL market

I and III

Commercial paper is a(n): I Money Market Instrument II Capital Market Instrument III Exempt Security IV Non-Exempt Security

I and III

Under the Securities Act of 1933, the final prospectus for a new registered securities issue: I contains the Public Offering Price II does not contain the Public Offering Price III must be given to the customer at, or prior to, confirmation of sale IV must be given to the customer at, or prior to, settlement of the transaction

I and III

Crowdfunding offerings are typically: I made by start-up issuers II made by seasoned issuers III purchased by small investors IV purchased by large investors

I and III Crowdfunding offerings are used by start-up companies to raise "seed" money, with the max amount permitted to be raised capped at $1,000,000 per offering. They are targeted at small investors. The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests.

Under Regulation Crowdfunding: I The maximum investment amount is $100,000 II The maximum investment amount is $500,000 III The maximum offering amount is $1,000,000 IV The maximum offering amount is $5,000,000

I and III The maximum amount that can be invested in a single offering under Regulation Crowdfunding is $100,000. The maximum offering amount is limited to $1,000,000.

Rule 144 allows the sale, every 90 days, of: I 1% of the outstanding shares II 10% of the outstanding shares III the weekly average of the prior 4 weeks' trading volume IV the weekly average of the prior 8 weeks' trading volume

I and III, Whichever is greater

Common carrier issues are: I exempt from the Securities Act of 1933 II subject to the Securities Act of 1933 III required to be sold with a prospectus IV not required to be sold with a prospectus

I and IV

Under the Securities Act of 1933, a Regulation A exemption from full SEC registration is available for new issue offerings that do not exceed: I $20,000,000 within a 12 month period for Tier 1 offerings II $20,000,000 within a 12 month period for Tier 2 offerings III $50,000,000 within a 12 month period for Tier 1 offerings IV $50,000,000 within a 12 month period for Tier 2 offerings

I and IV

Which of the following statements are TRUE about the spouse of an owner of 10% of the outstanding shares of a company? I The spouse is considered to be an affiliated person subject to Rule 144 II The spouse is not considered to be an affiliated person and is thus not subject to Rule 144 III The spouse can sell shares without filing Form 144 IV The spouse must file Form 144 when selling shares

I and IV

Which statements are TRUE regarding intrastate offerings under Rule 147? I Resale of the securities is permitted within that state immediately following the initial offering II Resale of the securities is permitted outside that state immediately following the initial offering III Resale of the securities is not permitted within that state for 6 months following the initial offering IV Resale of the securities is not permitted outside that state for 6 months following the initial offering

I and IV

A registered representative who handles the accounts of wealthy clients is told the following by one of her customers: "I made a "seed" money investment of $8,000,000 in a venture capital financing of a start-up tech company and received unregistered stock. Now I want to sell $4,000,000 of that company's shares." In order to handle the sale, which of the following "due diligence" items must be reviewed by the representative? I The company must have registered shares with the SEC and must be current in its SEC filings II The customer must have held the stock fully paid, for at least 6 months III The customer must intend to make a bona fide public offering of the shares IV The dollar amount of shares that the customer wishes to sell cannot exceed the amounts stipulated under Rule 144

I, II, III, IV

To sell restricted stock in compliance with the provisions of Rule 144, which of the following are required? I Filing of a Form 144 II Issuer's representation that the corporation is current with all required SEC filings III Seller's representation that the securities have been held fully paid for 6 months IV Broker's representation that it did not solicit the transaction

I, II, III, IV

Which of the following statements are TRUE during the period that a non-exempt new issue is "in registration"? I No advertising or sale of the issue is permitted II The SEC may issue a deficiency letter requesting additional information before allowing registration to become "effective" III The preliminary prospectus with the final price is distributed IV The offering participants perform due diligence on the offering

I, II, and IV

Under Regulation D, which of the following statements are TRUE? I A Prospectus must be delivered to all purchasers II An Offering Memorandum must be delivered to all purchasers III Full disclosure must be made to investors IV No disclosure is required to investors

II and III

Under Rule 144, no filing is required if the sale amount every 90 days does not exceed: I 500 shares II 5,000 shares III $50,000 IV $500,000

II and III

Which statements are TRUE regarding intrastate offerings? I Intrastate offerings are subject to Federal registration II Intrastate offerings are exempt from Federal registration III Intrastate offerings are subject to State registration IV Intrastate offerings are exempt from State registration

II and III

Which of the following statements are TRUE regarding restricted shares? I They are normally acquired through Rule 144 transactions II They are normally acquired through Regulation D private placement transactions III They can be sold publicly under a Rule 144 exemption IV They can be sold publicly under a Rule 147 exemption

II and III Restricted shares are normally acquired through private placements. If there is a public market for the stock at a later date, to sell the restricted shares in the market, they must either be registered or sold under a Rule 144 exemption.

Under the securities act of 1933, which of the following statements are TRUE regarding indications of interest received during the "cooling off" period for a registered initial public offering? I The indication is binding on the customer II The indication is not binding on the customer III The indication is binding on the underwriter IV The indication is not binding on the underwriter

II and IV

Which statements are TRUE about the use of a "red herring" preliminary prospectus? I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period II A preliminary prospectus may be sent to a prospective customer once the issue has entered into the 20 day cooling off period III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 IV The use of the preliminary prospectus does not constitute an offer to sell under the Securities Act of 1933

II and IV

Which of the following are defined as "accredited investors" under Regulation D? I Non-profit organization with assets in excess of $2,000,000 II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered IV A bank or savings and loan institution

II and IV Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. 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. The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. If the trust accumulated $5,000,000 for investment, it would be accredited. But the rule disallows this if the trust is formed for the purpose of buying the private placement!

Restricted securities can be sold under Rule 144 if: I they are sold on a dealer basis II they are sold on an agency basis III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days IV the issuer is reporting currently to the SEC

II, III, IV

Which of the following are non-exempt issues under the Securities Act of 1933? I Fixed annuity contracts II Variable annuity contracts III Listed option contracts IV Listed common stock

II, III, IV Insurance company offerings are exempt from the 1933 Act, EXCEPT for variable annuity and variable life contracts. Thus, a fixed annuity offered by an insurance co. is exempt from the 1933 Act. Listed stocks, and stock options are non-exempt issues that must be registered with the SEC.

Under Securities act of 1933, SEC Rule 415, the "shelf registration rule" allows

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. 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.

What is Rule 144?

an SEC rule that permits the holders of private placement "restricted" shares to resell these securities in the public markets without filing a registration statement, if the issuer has "gone public."

Under the Securities Act of 1933 what is Regulation A?

an easier registration process under the Securities Act of 1933 that permits a non-exempt issuer to issue up to $50,000,000 worth of securities each year. The intent is to make it simpler for start-up companies to raise capital. Regulation A has two offering tiers: Tier 1, for offerings of up to $20 million in a 12-month period; and Tier 2, for offerings of up to $50 million in a 12-month period

What is Rule 144A?

not to be confused with Rule 144, this rule permits large private placement offerings to be made to Qualified Institutional Buyers (QIBs) who may trade these securities among themselves without having to register the securities.

What is a Red Herring?

the preliminary prospectus which may be sent to potential purchasers of a new non-exempt securities issued during the 20-day cooling off period under the Securities Act of 1933. Legally, the preliminary prospectus does not offer the securities, since this is prohibited during the cooling off period. It is used to get an indication of the public's interest in a security before the final price is set and the security issued.

What is Regulation Crowdfunding?

the raising of capital by small start-up businesses through relatively small investment amounts. These are private placement securities that are exempt from registration with the SEC. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy.

Commercial Paper Definition

• A money-market security issued (sold) by large corporations to obtain funds to meet short-term debt obligations • Max maturity of 270 days • Not usually backed by any form of collateral, making it a form of unsecured debt • Is issued at a discount and matures at face value **Think Commercial= corporations

Banker's Acceptances Definition

• A promised future payment, or time draft, which is accepted and guaranteed by a bank and drawn on a deposit at the bank. • Specifies the amount of money, the date, and the person to whom the payment is due. • A short-term debt instrument and money market instrument • Used to finance international trade • Are traded at a discount from face value on the secondary market. The difference between the discount price and the face value is the interest on the banker's acceptance.

What is a restricted Stock?

A security which was never registered and can only be sold in the public markets when it is either registered, or sold under an exemption provision (such as Rule 144)

Under the Securities Act of 1933, all of the following activities are prohibited during the "cooling off" period EXCEPT: A. accepting an indication of interest from the customer for part of the issue B. recommending the purchase of the issue to potential investors C. selling the issue to an investor D. advertising the issue to the public

A. Accepting an indication of interest from the customer for part of the issue

Regulation Crowdfunding is intended as a means of raising capital for: A. Start-up companies B. Small capitalization companies C. Mid-capitalization companies D. Large-capitalization companies

A. Start-up companies

Who is considered an accredited investor under the provisions of Regulation D (Securities act of 1933)?

Accredited investors in a private placement under Regulation D include : - an individual with an annual income of at least $200,000 per year ($300,000 for a couple) - any person with at least a $1,000,000 net worth exclusive of residence. - institutional investors and officers and directors of the issuer are accredited investors. - financial institutes such as banks, insurance companies, MFs, with assets in excess of $5 million - non- profit institutional investors such as pension plans and college endowment funds with assets in excess of $5 million

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: A. 3 months B. 6 months C. 9 months D. 1 year

B. 6 months

What risk is the greatest concern in a Rule 144A transaction? A. Inflation risk B. Marketability risk C. Interest rate risk D. Credit risk

B. Marketability risk

Under Regulation D, purchasers of private placement offerings must be given full disclosure through a(n): A. Prospectus B. Offering memorandum C. Registration statement D. Form D

B. Offering memorandum Under Regulation D, purchasers of private placements must be given full disclosure about the issue, even though no prospectus is required (the issue is exempt). Disclosure is accomplished by providing the purchaser with a copy of an "Offering Circular," which for smaller private placements is called the "Offering Memorandum".

On December 1st, an officer of MNO Corporation wishes to sell stock under Rule 144. MNO has 50,000,000 shares outstanding. The previous weeks' trading volumes are: Week Ending Volume Nov 28 515,000 shares Nov 21 500,000 shares Nov 14 525,000 shares Nov 7 485,000 shares Oct 31 450,000 shares If the Form 144 is filed today, the maximum permitted sale is: A. 490,000 shares B. 500,000 shares C. 506,250 shares D. 515,725 shares

C. 506,250 shares 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. 1% of 50,000,000 shares = 500,000 shares. The last 4 weeks' trading volumes are: Nov 28 515,000 shares Nov 21 500,000 shares Nov 14 525,000 shares Nov 7 485,000 shares 2,025,000 shares / 4 = 506,250 share average The greater amount, 506,250 shares, can be sold during the next 90 days.

All of the following are exempt issues under the Securities Act of 1933 EXCEPT: A. U.S. Government Bonds B. Savings and Loan Issues C. Real Estate Investment Trusts D. Municipal Revenue Bonds

C. Real Estate Investment Trusts

What is Control Stock?

Control Stock is registered stock of a company bought in the open market by an officer or director of that company. It is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. The 6-month holding period is required for restricted stock, but not for control stock.

On December 1st, an officer of MNO Corporation wishes to sell stock under Rule 144. MNO has 60,000,000 shares outstanding. The previous weeks' trading volumes are: Week Ending Volume Nov 28 515,000 shares Nov 21 500,000 shares Nov 14 525,000 shares Nov 7 485,000 shares Oct 31 450,000 shares The maximum permitted sale under Rule 144 is: A. 490,000 shares B. 500,000 shares C. 506,250 shares D. 600,000 shares

D. 600,000 shares 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. 1% of 60,000,000 shares = 600,000 shares. 515,000 shares 500,000 shares 525,000 shares 485,000 shares = 2,025,000 shares / 4 weeks = 506,250 share average The greater amount is 1% of outstanding shares, or 600,000 shares.

Which of the following is NOT subject to the registration requirements of the Securities Act of 1933? A. American Depositary Receipts B. American Depositary Shares C. American Style Options D. Foreign Currency Contracts

D. Foreign Currency Contracts

All of the following are QIBs under Rule 144A EXCEPT a(n): A. pension fund with at least $100 million of assets to invest B. employee benefit fund with at least $100 million of assets to invest C. institution with at least $100 million of assets to invest D. individual with at least $100 million of assets to invest

D. individual with at least $100 million of assets to invest Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment.

Under the Securities Act of 1933, all of the following statements are true if the SEC sends a deficiency letter to the issuer regarding an issue in registration EXCEPT: A. disclosure in the registration documents is not complete B. the issuer must file an amendment with the SEC to cure the deficiency C. the 20-day cooling off period starts again once the amendment is filed D. the effective date of the issue is unaffected by the deficiency notice

D. the effective date of the issue is unaffected by the deficiency notice An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investors to make an informed decision. The deficiency must be cured before the SEC will allow the registration to be effective. Once the amendment is filed, the 20-day cooling off period starts counting again from the beginning. If the SEC finds that there is not adequate disclosure after the amendment is filed, it can issue subsequent deficiency letters. Thus, the registration for the issue may never "go effective."

All of the following are accredited investors under the provisions of Regulation D EXCEPT a(n): A. married couple with a $1.2 million net worth exclusive of residence B. individual with $220,000 of annual income C. officer or director of the issuer D. individual that invests $50,000, which is approximately 20% of that person's liquid net worth

D.individual that invests $50,000, which is approximately 20% of that person's liquid net worth Under Regulation D, an accredited investor is 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. In this example, if $50,000 is 20% of an individuals net worth, then their net worth is $250,000 (solve for x to find net worth 50,0000/x = 20/100 -> 20x = 5,000,000 -> x = $250,000)

Exempt or not exempt from the Securities Act of 1933: Common Carrier Issues

Exempt

Exempt or not exempt from the Securities Act of 1933: Eurodollar Debt

Exempt

Under the Securities Act of 1933 if the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements are TRUE? I All proper documents have been filed with the SEC II Additional documents must be filed with the SEC III The SEC approves of the new issue IV The issue may be offered to the public

I and IV

Which of the following securities are exempt from the registration provisions of the Securities Act of 1933? I U.S. Government issues II U.S. Government agency issues III General Obligation Bonds IV Industrial Revenue Bonds

I, II, III, IV

Which of the following activities are permitted after the registration statement is filed? I Solicitation of indications of interest for the issue in registration II Solicitation of orders for the issue in registration III Sending a preliminary prospectus to a customer about the issue in registration IV Publishing a tombstone announcement for the issue in registration

I, III, and IV- Once the registration statement is filed, a preliminary prospectus can be sent; indications of interest can be taken; and a "tombstone" announcement can be published

Under the Securities Act of 1933, when the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements is (are) TRUE? I The SEC has certified that the offering documents give full and fair disclosure II The proper documents for registration have been filed with the SEC III The SEC has approved the offering for sale to the public IV The SEC has established the final offering price

II only

Under the Securities Act of 1933, Which of the following activities are allowed prior to the filing of a registration statement? I Solicitations of indications of interest II Solicitations of orders III Sending a preliminary prospectus IV Publishing a tombstone announcement

None of the above

Exempt or not exempt from the Securities Act of 1933: American Depositary Receipts (ADRs)

Not exempt

Exempt or not exempt from the Securities Act of 1933: Industrial Company issues

Not exempt

What is regulation D under the Securities Act of 1933?

Regulation D allows a "private placement" exemption if an issue is sold to a max of 35 "non-accredited" investors. The issue can be sold to an unlimited number of "accredited" (wealthy and institutional) investors under this exemption and still be considered a private placement.

Exempted issuers are defined under the:

Securities Act of 1933

Which of the following is an exempt security under the Securities Act of 1933? A. Unit Investment Trust B. Small Business Investment Company C. Open-End Investment Company D. Closed-End Investment Company

Small Business Investment Company

What is Rule 145?

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. A registration statement is NOT required to be filed if a corporation splits its stock or distributes a stock dividend, since such a distribution affects only the par value of the outstanding shares - it doesn't create a new class of security.

What are the ONLY permitted written communications during the 20-day cooling off period (i.e. when an issue is "in registration")?

The red herring preliminary prospectus, and a tombstone announcement (which, in reality, is not published until the effective date)

Under the Securities Act of 1933, what is an Instrastate offering?

an offer of securities that is made only in one state (as opposed to an interstate offer made in more than 1 state). Is an exempt transaction under the Securities Act of 1933, since the Fed gov doesn't have jurisdiction unless the transaction crosses state lines. However, the offering must still be registered in that state, under the state "Blue Sky" laws.

Banker's Acceptances are:

money market instruments exempt from the Securities Act of 1933

Common Carrier Issue Definition

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). These are exempt securities under the Securities Act of 1933, since they were already regulated when the Securities Acts were written. **Think common carrier as common forms of carriers for people- ie common forms of transportation.

Under the Securities Act of 1933, new issues are not marginable until how many days have elapsed from the effective date? A. 30 days B. 45 days C. 60 days D. 90 days

A. 30 days

Exempt or not exempt from the Securities Act of 1933: Benevolent Association issues

Exempt

Under the Securities Act of 1933, what is the "effective date"?

the first date that a new issue can be sold to the public under the provisions of the Securities Act of 1933. The effective date occurs once the 20-day cooling off period has elapsed without the SEC sending a deficiency notice to the issuer.