Ch. 1: Uniform Securities Act. Sec. 2: Securities Registration Practice Questions
State registration of a security registered by qualification becomes effective:
when the Administrator so determines
For offers of pre-organization certificates to be exempt under the Uniform Securities Act, the number of subscribers is limited to how many people?
10 people
A private placement under the Uniform Securities Act is defined as an offer to:
10 persons or less in 12 months
Registration of securities in a State by Filing becomes effective:
5 business days after the filing with the State is completed
When a security is being registered in a State by coordination alongside a federal registration for that security being performed under the Securities Act of 1933, what information must be filed in the State?
A consent to service of process, copies of the prospectus, and a copy of the articles of incorporation and bylaws
The Administrator may summarily deny or revoke the exemption of which type of security?
Non-Profit Charitable Organization Issues
Which transaction is included in the definition of "sale" under the Uniform Securities Act?
A security given to a person as a "gift" with the sale of another security
Under the Uniform Securities Act, the person who is designated to enforce the Act's provisions is termed the:
Administrator
Which transaction is included in the definition of an "offer to sell"?
An unexecuted contract to sell a security (an open order)
The Administrator may NOT deny effectiveness to a securities registration if: I the application contains incomplete statements of material fact II an officer of the issuer has previously filed for bankruptcy III the issuer's enterprise is illegal in the State IV the issuer's liabilities exceed assets
B. II and IV only
Which of the following is EXCLUDED from the definition of a security under the Uniform Securities Act?
Correct A. Fixed Annuity Contract StatusB B. Variable Annuity Contract StatusC C. Investment Contract StatusD D. Mortgage Bond
The Administrator, by order, can deny any exemption from registration for all of the following EXCEPT a(n):
Correct A. municipal bond issued by another state, sold in the Administrator's state StatusB B. isolated non-issuer transaction StatusC C. transaction with a bank trust department StatusD D. private placement
The Administrator may deny or revoke a securities registration by:
Correct A. order StatusB B. petition StatusC C. edict StatusD D. hearing
Blue Sky laws require the:
Correct A. registration of securities offerings in each State StatusB B. registration of securities offerings with the SEC StatusC C. registration of securities attorneys in each State StatusD D. registration of broker-dealers with the SEC
If the State Administrator determines that a securities offering has been made on unfair terms, he or she may do all of the following EXCEPT:
Correct A. suspend the registration statement without providing an opportunity for a hearing StatusB B. suspend the registration statement only if an opportunity for a hearing is provided StatusC C. notify the issuer of any proposed action StatusD D. take any actions based on findings of fact and conclusions of law
Any registration statement for a securities offering includes:
Current balance sheet and income statement; Business description; Use of proceeds of offering; Offering Terms; Legal Opinion; Accountant's Opinion.
All of the following transactions are exempt under the provisions of the Uniform Securities Act EXCEPT:
StatusA A. isolated non-issuer transactions StatusB B. transactions effected between an issuer and an underwriter StatusC C. unsolicited non-issuer transactions effected by a broker-dealer Correct D. transactions effected between broker-dealers and the public
Under the Uniform Securities Act, registration of a security in a State means that: I disclosure documents have been filed with the Administrator II the Administrator has reviewed the content and accuracy of the filing III the Administrator has approved of the securities being offered
I and II
Which of the following are NOT defined as securities under the Uniform Securities Act? I Individual Retirement Accounts II Keogh Plans III Commercial Paper IV Real Estate Condominium Investments
I and II
In order for a promissory note to be an exempt security under the Uniform Securities Act:
StatusA A. it must mature within 9 months StatusB B. it must be issued in minimum denominations of $50,000 StatusC C. it must be rated in one of the 3 highest categories by Moody's Correct D. all of the above
A broker-dealer has a place of business in State A does business exclusively in State A and is registered in the State. The broker-dealer has no office in State B and is contacted by a client in State B who wants to sell some securities that he inherited. State B does not have a de minimis rule for broker-dealers. The client is not interested in opening an account and only wants the broker-dealer to do this transaction and remit the proceeds to the customer. Which statements are TRUE? I In order to effect this transaction, the broker-dealer must be registered in State B II In order to effect this transaction, the broker-dealer is not required to be registered in State B III In order to effect this transaction, the securities involved must be registered in State B IV In order to effect this transaction, the securities involved are not required be registered in State B
I and IV
Which statements are TRUE about the "burden of proof" needed to vacate a stop order entered by the Administrator in a securities registration? I If the issue is being registered by coordination, the burden of proof is on the Administrator to show that registration should not be allowed to proceed II If the issue is being registered by coordination, the burden of proof is on the applicant to show that registration should be allowed to proceed III If the issue is being registered by qualification, the burden of proof is on the Administrator to show that registration should not be allowed to proceed IV If the issue is being registered by qualification, the burden of proof is on the applicant to show that registration should be allowed to proceed
I and IV
The provision(s) of the Uniform Securities Act that apply(ies) to persons who effect isolated non-issuer transactions on their own behalf, is (are): I Anti-Fraud provisions II Securities registration provisions III Broker-dealer registration provisions
I only
Which of the following statements are TRUE about unsolicited customer transactions effected through a broker-dealer? I The Administrator may require that the customer acknowledge the transaction with a written statement II The transaction is exempt under State law III No commissions may be paid to the broker effecting the transaction IV The transaction is defined as a "non-issuer" transaction
I, II and IV
Filing of advertising with the Administrator is NOT required for: I U.S. Government securities II Municipal securities III Investment company securities IV Options Clearing Corporation securities
I, II, III
Which of the following are defined as securities under the Uniform Securities Act? I Fractional interests in Oil and Gas Programs II Multilevel Distributorship Arrangements III Variable Annuity Contracts IV Fixed Annuity Contracts
I, II, III
Registration by Filing would NOT be permitted for which of the following reasons? I An Administrator in another State has issued a stop order relating to this issue II The issue is only going to be offered in one State III The Securities and Exchange Commission denies effectiveness to the Federal registration statement IV The Administrator has not received a copy of the latest prospectus
I, II, III, IV
The Administrator, in regards to the registration of securities, may: I impound the proceeds from the sale of the securities until the issuer receives a specified dollar amount II require the filing of original copies of confirmed subscription agreements III require the delivery of a prospectus IV require that the issuer file quarterly reports of sales of the issue
I, II, III, IV
Under the Uniform Securities Act, a security cannot be offered in a state unless it: I has been registered in the state II is an exempt security, in which case no registration is required III is offered in an exempt transaction IV is a federal covered security, in which case no registration is required
I, II, III, IV
Which of the following are defined as a "State" under the Uniform Securities Act? I Hawaii II Puerto Rico III Virgin Islands IV District of Columbia
I, II, III, IV
define assessable security:
a security that obligates the holder to contribute more money to the issuer, if the issuer needs the funds. limited partnership units typically are assessable - if the general partner needs more money to run the partnership, the general partner has the right to assess the limited partners for more funds.
Under the Uniform Securities Act, an application to register securities may be filed by the: I Broker-Dealer II Agent III Issuer IV Person on whose behalf the offering is to be made
I, III, and IV
The Administrator can require which of the following regarding federal covered securities offered in a State? I Notice filing for the issue in the State II Registration of the issue in the State III Filing of documents relating to the issue in the State IV Payment of a filing fee in the State
I, III, and IV only
Which of the following are defined as securities under the Uniform Securities Act? I Stock options II Commodity options III Stocks IV Commodities
I,II,III
An issuer has filed a registration statement in a State for a new issue of securities that is effective and sale of the issue has started. The issuer finds that there is great demand for the offering and wishes to increase the number of shares being issued. In order to do this: I a new registration statement must be filed with the State, if it is within 6 months of the date of sale II an amendment must be filed, as long as it is within 6 months of the date of sale III an additional filing fee must be paid, but no late registration fee is required IV both an additional filing fee and a late registration fee must be paid
II and IV
Which statements regarding registration of a security in a State are FALSE? I Registration is effective for a time period of 1 year II Once registration is declared effective in a State, it is effective in any other State in which a registration statement is filed III A registration statement can be filed in a State by a person other than an issuer IV To maintain registration in a State quarterly and annual financial statements must be filed with the Administrator
II and IV
The Administrator will give a specific response before the effective date for issues that are registered by: I Filing II Coordination III Qualification
III only
All of the following are defined as "federal covered securities" EXCEPT:
StatusA A. common stock of a company listed on the New York Stock Exchange StatusB B. debentures of a company listed on NASDAQ StatusC C. common stock issued by an open- end management company Correct D. common stock issued by a company listed on the Over-the-Counter Bulletin Board
To qualify for registration by coordination under the Uniform Securities Act, the issuer's securities must be concurrently registered under the provisions of the:
Securities Act of 1933
Which Act can be used to coordinate a securities registration filing under the provisions of the Uniform Securities Act?
Securities Act of 1933
All of the following conditions must be met for an investment to be defined as a "security" under the Uniform Securities Act EXCEPT:
StatusA A. investment in a common enterprise StatusB B. expectation of earning a profit StatusC C. management by a third party Correct D. guaranteed rate of return
Time period for effectiveness of registration
Securities registrations are good for one year they remain in effect for as long as the security is actively offered. If the offering takes longer than the 1 year period, the registration must be renewed. if a stop order is entered, the registration ceases to be effective and sale of the issue must stop.
Which of the following is NOT a federal covered security?
StatusA A. An offering made over-the-counter of $250,000,000 of 10% convertible debentures of ACME Corporation, a company whose common stock is listed on the American Stock Exchange (NYSE-MKT) StatusB B. A private placement of $250,000,000 of debt backed by automobile finance company receivables sold to investment managers that are qualified purchasers Correct C. An offering of $250,000,000 of General Obligation bonds by the City of New Orleans to the residents of Louisiana StatusD D. An offering of $250,000,000 of common shares of a mutual fund that will be offered to the general public
Which of the following securities can be registered by qualification in a State?
StatusA A. Direct Participation Program StatusB B. Fractional Interest in an Oil and Gas Program StatusC C. Voting Trust Certificates Correct D. All of the above
All of the following securities are exempt from registration under the Uniform Securities Act EXCEPT:
StatusA A. Railroad common stock StatusB B. Municipal bonds Correct C. Canadian common stocks StatusD D. Foreign government bonds
A corporation listed on the American Stock Exchange (NYSE-MKT) wishes to distribute a stock dividend to its shareholders. Which statement is TRUE?
StatusA A. The issuer must register the shares in the State by Filing StatusB B. The issuer must register the shares in the State by Coordination StatusC C. The issuer must register the shares in the State by Qualification Correct D. The transaction is exempt and the shares do not have to be registered in the State
All of the following are exempt securities under the Uniform Securities Act EXCEPT:
StatusA A. Treasury bonds StatusB B. Municipal bonds StatusC C. U.S. Government agency bonds Correct D. Surety bonds
All of the following are defined as securities under the Uniform Securities Act EXCEPT:
StatusA A. Variable Annuity Contracts StatusB B. Investment Contracts StatusC C. Mortgage Bonds Correct D. Mortgages
All of the following information would be found in a registration statement for a security that is going to be registered by qualification in a State EXCEPT:
StatusA A. a current balance sheet of issuer StatusB B. the price of the security being offered StatusC C. the use of proceeds of the offering Correct D. projections of future earnings of issuer
Under the Uniform Securities Act, all of the following would be defined as an unsolicited transaction EXCEPT a(n):
StatusA A. new customer calling an agent for the first time with directions to place a buy order for a specific security StatusB B. existing customer calling an agent with directions to place a buy order for a specific security that has not been recommended by that firm Correct C. existing customer placing an order to buy a security after receiving a preliminary prospectus about the issue from the broker-dealer StatusD D. existing customer placing an order to buy a security from the broker-dealer after seeing a tombstone advertisement for the issue in the newspaper
All of the following statements are true regarding the private placement exemption under Uniform State Law EXCEPT:
StatusA A. offers can be made to no more than 10 persons in a 12 month period to qualify for the exemption StatusB B. all purchases must be made for long term investment StatusC C. no commissions may be paid to anyone other than for transactions with financial and institutional investors Correct D. all payments made by subscribers must be deposited to an escrow account until the offering is completed
All of the following are exempt securities under the Uniform Securities Act EXCEPT:
StatusA A. stock issued by a railroad subject to Interstate Commerce Commission regulation StatusB B. bonds issued by a Federal Credit Union StatusC C. bonds issued by the Canadian Government Correct D. stock issued by a corporation in an amount not exceeding $1,000,000
Under the provisions of the Uniform Securities Act, NAFTA and GATS, the State Administrator has the power to designate all of the following non-issuer transactions as "exempt" EXCEPT:
StatusA A. trades effected on the Toronto Stock Exchange StatusB B. trades effected on the American Stock Exchange StatusC C. trades effected on the Mexico Stock Exchange Correct D. trades effected on the London Stock Exchange
define Federal Covered Security
a security of an issuer listed on a major stock exchange and registered investment company securities. Federal covered securities must be registered with the Securities and Exchange Commission, and cannot be required to register in the State.
Misstatements of material fact in a securities registration are violations of the Act for all of the following persons EXCEPT:
agents
define: private placement
an exempt transaction under regulation d that can be sold without a prospectus to an unlimited nuber of accredited (wealthy) 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. the state definition of private placement is the same except it only allows for 10 non-accredited investors (in less than 12 months)
Under the Uniform Securities Act, for an account to be considered by the Administrator to be "institutional," it must:
be designated as such by rule or order of the Administrator
Under the Uniform Securities Act, the term "guarantee" can be made by a third party other than the issuer to all of the following EXCEPT:
capital appreciation
An existing customer of an agent who is registered in State Z contacts the agent to inquire about selling 1,000 shares of ABCC Corp. - a thinly traded stock that is sometimes quoted in the Pink Sheets. The agent attempts to locate a buyer for the shares for the customer, but cannot find one. One week later, a new customer contacts the agent, asking him to buy 1,000 shares of ABCC Corp. The agent contacts the existing client to see if he is interested in selling these shares. This action is:
considered to be an offer to buy made by the agent
An existing customer of an agent who is registered in State A contacts the agent to inquire about purchasing 1,000 shares of XYZZ Corp. - a thinly traded stock that is sometimes quoted in the Pink Sheets. The agent attempts to locate the shares for the customer, but they are not available. Three weeks later, a new customer contacts the agent, asking him to sell 1,000 shares of XYZZ Corp. that he owns. The agent contacts the existing client to see if he is interested in purchasing these shares. This action is:
considered to be an offer to sell made by the agent.
Registration by Coordination permits simultaneous State registration of securities when the SEC registration:
filed under the provisions of the Securities Act of 1933 becomes effective
In order for a "church" bond issue to be exempt, the Administrator:
must not disallow the exemption within a stated time period after a Notice Filing is made
If a corporation has NOT previously filed a Federal registration statement for an initial offering of securities solely in its home state, registration in that state must be completed by:
qualification
Under the provisions of the Uniform Securities Act, the Administrator, in connection with a securities registration, is prohibited from revoking a:
registration retroactively
If an issuer offers a Federal Covered security in a State, the State Administrator may:
require the issuer to pay a filing fee in the State
Registration by Filing would most likely be used for a(n):
secondary offering from an established company
Registration of a security in a State is required if the:
security has been registered with the Securities and Exchange Commission under the 1933 Act
The State Administrator is supervised by
the State secretary
All of the following are considered to be an "offer to sell" a security EXCEPT:
the giving of a stock dividend to holders of that security
define offer to sale:
the unexecuted contract to sell a security for value - that is, the attempt to sell a security. Also included in the definition is a solicitation of an offer to buy the security.