Series 66 Chapter 2 (Part 1)

To use Filing (Notification) to register stock, the offering price must be at least $______ per share.

$5.00

What four elements are required for an investment contract to be considered a security?

1) An investment of money, 2) A common enterprise, 3) Efforts made by a third party, 4) An expectation of profits

Under the USA, private placements are exempt if securities are offered to ____ or fewer retail clients over ____ months.

10 / 12 months

Registration by Coordination has a minimum cooling-off period of _____ days.

10 Days

Registration by Filing (Notification) requires that the underwriting commission be no more than _____%.

10%

Registration by Filing (Notification) requires issuers to be in business at least _____ months preceding registration.

36 Months

What is the minimum cooling-off period for registration by notification?

5 days

What criteria must be met for commercial paper to be exempt from registration?

A 270-day maximum life, minimum denomination of $50,000, rated in one of the top-three categories according to an NRSRO

A retirement plan that is simpler to administer and set up than some other types of pension plans.

A SEP Plan

Under the Uniform Securities Act, what information would NOT need to be disclosed when filing a registration by qualification?

A statement analyzing the issuer's profit margin over the last three years compared to the profit margins of its primary competitors

What is the general definition of an issuer?

Any person who issues or proposes to issue a security, such as government entities and corporations.

________ issued by insurance companies are exempt from state registration.

Bonds

Under the USA, which of the following transactions is NOT considered exempt? A. An offering being made to an investment company B. A transaction by an executor of an estate C. An unsolicited issuer transaction that is executed through a registered broker-dealer D. A transaction by a trustee that is involved in a bankruptcy proceeding

C. An unsolicited issuer transaction that is executed through a registered broker-dealer

According to the Uniform Securities Act, which of the following securities are exempt from registration? A. Stock issued by a FINRA member firm B. Debentures issued by a Canadian bank C. Stock issued by a state-regulated railroad company D. Preferred stock sold to investors in the same state in which the firm is incorporated

C. Stock issued by a state-regulated railroad company

What does the USA consider a security issued by an investment company that is registered under the Inv. Co. Act of 1940?

Considered federal covered

If an IPO is being registered, an issuer is most likely using what form of state registration?

Coordination

Which method of state securities registration would likely be used for an IPO being offered in several states?

Coordination

An __________ policy is a type of life insurance that pays face value at the end of a period.

Endowment

Non-issuer trading of securities subject to reporting requirements of the Act of 1934 are _________ transactions.

Exempt

Transactions between the issuer and its underwriter are considered ________ transactions.

Exempt

Is a private placement considered an exempt transaction or an exempt security under the USA?

Exempt transaction

Securities that are exempt from registration.

Government/municipal bonds, commercial paper, bankers' acceptances, bank issues, non-profit and small business issues

Under the Uniform Securities Act, which of the following statements is/are TRUE regarding the registration of securities? I. A security is considered registered for one year from the effective date of its registration statement II. Once the registration statement is declared effective by the Administrator, the security is considered to be registered as long as the issuer files quarterly and annual financial statements III. If the registration statement for a security is declared effective by the Administrator of one state, it is also immediately effective in any state in which an identical registration statement has been filed IV. The filing of a registration statement may be done by a person other than the issuer

I and IV only

Which Act regulates Unit Investment Trusts?

Investment Company Act of 1940

Is a 401(k) plan considered a security?

No

Is an IRA account considered a security?

No

Are bonds issued by a charitable organization subject to state registration?

No. Securities issued by non-profit organizations are exempt from registration.

What form of state registration is not available in all states?

Notification (filing)

An intrastate offering may use which method of state securities registration?

Qualification

The only form of state registration that has its effective date set by the Administrator is _______________.

Qualification

What method of state securities registration requires issuers to wait to hear from the Administrator before selling?

Qualification

Under the USA, is stock issued by an electric company an exempt security or an exempt transaction?

Securities issued by public utilities are considered exempt securities.

Name some of the federal covered securities.

Securities listed on an exchange, issued by an investment company, and sold as a private placement (Reg. D Rule 506)

If an agent unknowingly misrepresents the risk associated with a security, which of the following statements is correct according to the Uniform Securities Act?

Since the agent unknowingly made misrepresentations regarding a security, the agent is not subject to disciplinary action.

Securities that are listed on the NYSE are exempt from

State registration

Registration by Coordination requires issuers to meet requirements of the USA as well as what other Act?

The Securities Act of 1933

Registration by Coordination permits the simultaneous registration of securities when the SEC registration statement that is filed under the provisions of:

The Securities Act of 1933 becomes effective

True or False: A transaction by an executor is exempt.

True. Any transaction by an executor, administrator, trustee in bankruptcy, or conservator is considered exempt.

According to NSMIA, when is an investment pool considered a federal covered security?

When it registers as an investment company under the Investment Company Act of 1940

Is a preemptive right considered a security?

Yes

NSMIA indicates that securities listed on the NYSE and Nasdaq are _______ _______ securities.

federal covered