S66 Part 1 Questions- Ch 4 Securities Registration

Which of the following is NOT defined as a security under the Uniform Securities Act? A)A Roth IRA B)Unsecured debentures sold in a private placement only to accredited investors C)Bills, notes, and bonds issued by the U.S. Treasury D)An investment in a managed pool of rental condominiums

A)A Roth IRA

If a public customer plans to purchase stock in a company that has been listed on a stock exchange for the past year in a regular-way secondary transaction, when must the customer receive the prospectus? A)Before the order entry B)Are no prospectus delivery requirements for this transaction C)Before the settlement date D)No later than 3 days from the settlement date

B)Are no prospectus delivery requirements for this transaction

All of the following statements regarding the selling of private placements under the USA are true EXCEPT A)that no commission or other remuneration may be paid for soliciting noninstitutional buyers B)that they cannot be offered to more than 35 noninstitutional persons in 12 consecutive months C)that they can be offered without limitation to institutional investors D)that the seller must reasonably believe that all noninstitutional buyers are purchasing for investment purposes only

B)that they cannot be offered to more than 35 noninstitutional persons in 12 consecutive months Under state law, a private placement can be offered to no more than 10 noninstitutional investors in 12 consecutive months.

sale of a security to an insurance company

exempt transaction

Which of the following statements regarding unsolicited, nonissuer transactions is TRUE? A)An Administrator may require representatives to obtain customer signatures acknowledging that orders were unsolicited. B)An agent can only accept unsolicited orders in exempt securities. C)An agent may only accept unsolicited orders with prior approval of a principal. D)An agent may not accept unsolicited orders unless the transaction directly benefits the issuer.

A)An Administrator may require representatives to obtain customer signatures acknowledging that orders were unsolicited.

Which of the following would NOT be included in the definition of a security under the Uniform Securities Act? A)Whole life insurance policies issued by the Dividend Mutual Life Insurance Association of America B)Preferred stock in the Colonel Corn Processing Corporation C)Debentures issued by the XYZ Retirement Planning Company D)Common stock in the Shining Silver Mining Company

A)Whole life insurance policies issued by the Dividend Mutual Life Insurance Association of America Nonvariable contracts issued by insurance companies are not securities.

Under the Uniform Securities Act, certain transactions are exempt from the sales literature and advertising filing requirements. Which of the following would be included in that category? I)Any isolated, nonissuer transaction II)Any sale to a financial institution III)Any transaction by the executor of an estate IV)Any transaction between an issuer and underwriters A)I, II, and IV B)I, II, III, and IV C)I and III D)II and III

B)I, II, III, and IV All four options describe exempt transactions. Exempt transactions are not subject to the advertising and sales literature filing requirements of the Administrator.

A transactional exemption would be offered when a sale is made by A)an attorney as an incidental part of her legal practice B)a sheriff C)a broker-dealer D)an investment adviser

B)a sheriff

Under the USA, all of the following issues would be exempt from registration EXCEPT A)stock issued by savings and loan association authorized to do business in this state B)an investment contract issued in connection with an employee stock purchase plan C)stock issued by an insurance company not offering policies in this state D)bonds issued by the city of New Orleans

C)stock issued by an insurance company not offering policies in this state had the insurance company been registered with the state, then it would have been exempt

Which of the following does NOT have a federally imposed exemption from registration with the SEC? A)Securities issued or guaranteed by the U.S. government B)Promissory notes and bankers' acceptances with maturities of 9 months or less where the proceeds are not used for capital expenditures C)Securities issued or guaranteed by a state or political subdivision of a state D)Shares of bank holding companies traded on the New York Stock Exchange

D)Shares of bank holding companies traded on the New York Stock Exchange shares of bank holding companies are NOT, i repeat, NOT exempt securities however, since they are traded, on the NYSE, they are fed covered, and that means they are state exempt. BUT these are not federally imposed exemptions

Under the Regulation D, Rule 506(b) private placement offering exemption, which of the following statements is true? A)The issue may be sold to an unlimited number of nonaccredited investors. B)The exemption is forfeited if there are any sales to nonaccredited investors. C)The rule allows general solicitations but no advertising. D)The issuer can use an online questionnaire to qualify potential investors

D)The issuer can use an online questionnaire to qualify potential investors Rule 506(b) permits a maximum of 35 nonaccredited investors and an unlimited number of accredited investors. The questionnaire is used by the issuer to determine the status of the potential investor. It is Rule 506(c) that permits general solicitation and advertising and requires that all investors be accredited.

The USA considers certain transactions to be exempt from the requirements to register and the filing of advertising material. Included in that group are all of the following EXCEPT A)any transaction by an executor, administrator, sheriff, marshal, or guardian B)an isolated nonissuer transaction effected through a broker-dealer C)any transaction executed by a bona fide pledgee without any purpose of evading the act D)any offer or sale to a pension or profit-sharing trust as long as the plan has assets of no less than $750,000

D)any offer or sale to a pension or profit-sharing trust as long as the plan has assets of no less than $750,000 In general, the USA does not consider a transaction with an employee benefit plan to be exempt unless the plan has assets of at least $1 million.

Under the Uniform Securities Act, the requirements for filing of advertising and sales literature dealing with an exempt security with the Administrator A)apply only to sales literature B)always apply C)apply only to advertising D)do not apply

D)do not apply An exempt security or transaction is exempt from the registration requirements and the requirements for filing of advertising and sales literature. It is not exempt from the antifraud provisions of the act.

All of the following are exempt from state registration EXCEPT A)fixed annuities issued by a small insurance company B)common stock in Mutual Savings Bank C)fixed-income securities issued by a bank D)variable annuities issued by a major insurance company

D)variable annuities issued by a major insurance company Fixed annuities are not securities, so there is no registration required. Of the other choices listed, only variable annuities are required to be registered.