S66 Chapter 2 missed questions
A company issued $50 million of common stock in a private placement under Regulation D. In order to sell the stock initially in any state, the Administrator requires the filing of:
A Notice Filing Since stock that's issued under Reg D. is federally covered, the shares do not need to be registered at the state level. However, state Administrators can require the issuer to complete a Notice Filing. Form 10-K is a financial report that corporations file with the SEC. Form ADV-NR is filed by investment advisers that have principal officers who are not residents of the United States
Which of the following choices is not considered a security?
A Treasury bond futures contract Under the Uniform Securities Act, futures contracts are not securities. However, options on commodity futures contracts are considered securities. Variable products, and ADRs are also defined as securities
Which of the following would most likely be registered with the state Administrator?
A distribution of an interest in a mining or real estate venture Interests in mining or real estate ventures are examples of partnership offerings. General and limited partnerships are often registered with the Administrator in the state in which they are offered. Municipal bonds are not subject to registration requirements since they are categorized as exempt securities under the Uniform Securities Act. Also, mutual fund shares and securities listed on the NYSE are federal covered securities, since these issues are only required to be registered with the SEC
Which of the following transactions meets the definition of an exempt transaction under the Uniform Securities Act?
A nonissuer transaction of a security filed under the Investment Company Act Any nonissuer transaction of a security registered under the Securities Act, Investment Company Act, or an isolated nonissuer transaction would be considered exempt transactions. Any offer, but not sale, of a security filed with both the Administrator and SEC would be considered an exempt transaction
According to the Uniform Securities Act, all the following transactions would be considered exempt, EXCEPT:
A nonissuer transaction of a security that is regularly quoted on the OTC Bulletin Board A nonissuer transaction of a security that is regularly quoted on the OTC Bulletin Board would not qualify as an exempt transaction. The OTCBB does not have specific listing criteria, whereas national exchanges such as the NYSE and Nasdaq have minimum standards to which issuers must adhere. All the other choices are specifically defined under the USA as exempt transactions.
Registration by coordination would most likely be used to register what type of offering?
An initial public offering Under normal circumstances, the method of registration most often used by the new issuers of securities is registration by coordination. Mutual funds are federal covered securities. All listed securities, such as Nasdaq securities, are also federal covered and, therefore, exempt from registration with the states. Intrastate offerings are commonly registered by qualification.
According to the USA, which of the following securities are exempt from registration?
Bonds issued by a government-regulated common carrier Exempt securities include those that are issued by a U.S. federal, state, or local governments, a railroad, a common carrier, a public utility, or a holding company that is subject to specified regulations. Debt securities issued by insurance companies are exempt but not the stock of their subsidiaries. However, variable annuities issued by insurance companies are subject to registration
Under the Uniform Securities Act, an institutional investor:
May be designated as such by rule or order of the Administrator The best answer to this question is that, by rule or order, the Administrator has the power to designate a person as an institutional investor. A client with net worth of more than $2.2 million or a client with a minimum of $1.1 million under management with an investment adviser is defined as a qualified client, not necessarily an institutional investor. Both financial institutions and trusts may be considered institutional investors, but there's a financial requirement that must be met.
Over the most recent 18 months, a U.S. computer manufacturer repurchased one million shares of its outstanding common stock. The company will be required to take which of the following actions if it intends to distribute these shares in the form of a stock dividend?
No special action is required by the company When a company repurchases its shares in the secondary market, they're referred to as treasury stock. As long as the company remains current on its filings, SEC registration of securities doesn't expire. The distribution of treasury stock to existing shareholders doesn't require the shares to be registered once again with the SEC, since the stock dividend will not constitute the issuance of new shares
Which of the following is an example of an exempt transaction under the Securities Act of 1933?
Reg. D Since this question is asking about an exempt transaction at the federal level, the only appropriate answer is Reg D. A Reg D offering is also considered a private placement and represents a federal exempt transaction. Under the Securities Act of 1933, U.S. Treasuries, municipal securities, and railroad equipment trusts are all exempt securities (not transactions)
According to the Uniform Securities Act, which of the following securities are exempt from registration?
Stock issued by a state-regulated railroad company Common carriers, such as railroads and shipping companies, are exempt from registration under the Uniform Securities Act. While securities issued in the same state in which the firm is incorporated may be exempt from the Securities Act of 1933, they are usually required to register with the state. Agencies of the Canadian government and domestic U.S. banks are also exempt from registration, but securities issued by Canadian banks receive no such exemption
An insurance company is considering raising capital by issuing bonds. Under the Securities Act of 1933, the bonds are considered:
Subject to registration with the SEC Under the Securities Act of 1933, securities that are issued by insurance companies are subject to both the SEC's registration requirements and its prospectus delivery requirements. However, the bonds are exempt from registration with the state Administrator. Keep in mind, no securities are exempt from the antifraud provisions of the Securities Act of 1933
According to the Uniform Securities Act, which of the following statements is NOT TRUE concerning private placements?
The offer may be made to 35 or fewer persons in that state during any 12-month period. Under the Uniform Securities Act, a "private placement" is any transaction that involves an unlimited number of institutional investors and no more than 10 other persons (non-institutional investors) during any 12-month period. Along with limiting the number of non-institutional investors, a private placement must meet the following conditions: 1) the seller must believe that all of the non-institutional buyers are purchasing for investment purposes only, and 2) no commission or other remuneration can be paid for soliciting non-institutional buyers. Any reference to an offering of securities to 35 or fewer persons (non-accredited investors) is a private placement under Regulation D of the Securities Act of 1933 and NOT the Uniform Securities Act.
Under the Uniform Securities Act, which of the following sales is considered a non-issuer transaction?
The sale of an outstanding security on the New York Stock Exchange A nonissuer transaction (secondary market trade) involves any purchase or sale of a security whereby the issuer does not directly or indirectly derive a benefit. A stock trade that occurs on the NYSE is an example of a nonissuer transaction. All of the other answer choices represent issuer transactions
Registration of a security in a state is not required for ALL of the following reasons, EXCEPT:
The security has been registered with the Securities and Exchange Commission under the Securities Act of 1933 Under the Uniform Securities Act, a security is not required to be registered if: - The security is exempt; or - The security is non-exempt, but is being offered in an exempt transaction; or - The security is a federal covered security; or - The instrument does not meet the definition of a security Whether a security has been registered with the SEC (under the Securities Act of 1933) has no bearing on the state registration requirement
