Unit 2 Series 63

XYZ Corp has been in business for over 20 years. It needs additional capital for expansion and determines that a public offering in its home state and neighboring states is appropriate. Which method of securities registration most likely would be used to register this initial public offering A. coordination B. notice filing C. qualification D. any of the above

A coordination, because this offering is being made in more than one state, SEC registration is necessary; the state registration method would be coordination, which is the simultaneous registration of a security with both the SEC and the states

A primary transaction is A. the first transaction between two parties in the over the counter market B. a sale between investors of securities traded on the NYSE C. a new offering of an issuer sold to investors D. a secondary market transaction in a security recently offered to the public

C, a primary transaction is a new offering of securities by an issuer sold to investors. Transactions between two investors in the over the counter market are called secondary transactions. A sale between investors of securities traded on the NYSE is another example of secondary transaction

Under the uniform securities act, if a security is registered by qualification, the adminstrator may require an agent to present the prospectus for a new issue to the offeree A. prior to making the offer B. prior to making the sale C. prior to the effective date of the issue D. once payment has been made

b prior to making the sale, under section 305(I) of the uniform securities act, the administrator may require that a prospectus be sent or given to each person to whom an offer is made before the sale of the security

Under the USA, all of the following are exempt securities except A. US government securities B. unsolicited transactions C. bonds issued by Saskatoon D. securities of federal credit unions

b, unsolicited transactions are exempt transactions, not exempt securities. U.S. government securities, Canadian provincial and municipal securities and securities of federal credit unions are exempt securities not exempt transactions

Under the USA, which of the following would be considered an exempt transaction: I. The call from an existing client to purchase 1,000 shares of common stock that is not registered in this state II. The sale of shares that are part of a registered secondary of a NYSE listed company to an individual client III. The sales of shares of a banks IPO to an institutional client IV. The sale of shares of an insurance company's IPO to an individual client

A I and III, a client calling to purchase stock is an unsolicited transaction, probably the most common of exempt transaction. Any sale to an institutional client is an exempt transaction while those to individuals, unless unsolicited, generally are not. Please note that even though the NYSE listed stock is exempt, the transaction is not

Registration statements for securities under the uniform securities act are effective for: A. a period determined by the administrator for each issue B. 1 year from the effective date C. 1 year from the date of the issue D. 1 year from the previous January 1

B 1 year from the effective date, securities registration statements are effective for 1 year from the effective date

Under the USA, which of the following persons is responsible for proving that a securities issue is exempt from registration? A. underwriter B. Issuer C. state administrator D. there is no need to prove eligibility for an exemption

B issuer, the burden of proof for claiming eligibility for an exemption falls to the person claiming the exemption. IN the event the registration statement was filed by someone other than the issuer(such as a selling stockholder or borker dealer), that person must prove the claim

Which of the following would not be included in the definition of federal covered security A. unit investment trusts registered under the investment company act of 1940 B. stock issued by a life insurance company authorized to do business in the state C. bonds listed on the NYSE D. securities sold under REG D of the securities act of 1933

B, the term federal covered security includes securities listed on the NYSE, investment companies registered under the investment company act of 1940, and securities that are the subject of the private placement exemption of regulation D of the securities act of 1933. The fact that the insurance company is authorized to do business in the state would make it exempt from registration in that state, but that does not make it a federal covered security

Which of the following is defined as a security under the Uniform Securities Act? A. A gauranteed lump some payment to a beneficiary B. Fixed, guaranteed payments made for life or for a specified period C. Commodity futures contracts D.An investment contract

D an investment contract, investment contracts are defined as securities under the uniform securities act. In fact, the term is often used as a synonym for a security. A guaranteed lump sum, payment to a beneficiary is an endowment policy excluded from the definition of a security. Fixed guaranteed payments made for life or for a specified period are fixed annuity contracts not defined as securities. Commodity futures contracts and the commodities themselves are not securities. Remember it is much easier to remember what is not a security than what is

Registration is effective when ordered by the administrator in the case of registration by A.coordination B. integration C. notice filing D. qualification

D qualification, registration by qualification is the only registration method in which the administrator sets the effective date. The effective date under registration by coordination is set by the SEC, and notice filing is merely the filing of certain documents enabling the registrant to offer securities in that state

Each of the following meet the USAs definition of an exempt transaction except A. transactions made by an executor of an estate B. transactions with an investment company registered under the investment company act of 1940 C. an unsolicited sale of an OTC bulletin board stock D. sale of a new issue of a federal covered security to an individual customer

D, sale of stock to an individual client, new issue or not, would not be an exempt transaction. Even if the security is exempt. Transactions by a fiduciary, such as the executor of an estate, are included in the definition of exempt transaction, as are transactions with institutional clients, such as investment companies and insurance companies. The OTC bulletin board is an electronic medium for the trading of highly speculative, thinly capitalized issues. Because the order is an unsolicited one, the transaction is exempt.

Which of the following securities is not exempt from the registration provisions of the USA? A. Common stock issued by a savings and loan association authorized to do business in the state B. General obligation municipal bond C. Bond issued by a company that has common stock listed on the new york stock exchange D. Variable annuities sold by a life insurance company authorized to do business in the state

D, securities issued by a life insurance company authorized to do business in the state are exempt, but the variable policies are not. The USA exempts from registration a number of different issues including securities issued by a bank or anything that resembles a bank. Securities issued by a governmental unit are always exempt. Securities listed on the NYSE are part of a group known as federal covered securities that also includes securities listed on the nasdaq

As defined in the USA, each of the following would be considered an exempt transaction except: A. a trustee of a corporation in bankruptcy liquidates securities to satisfy debt holders B. an offer of a securities investment is directed to 10 individuals in the state during a period of 12 consecutive months C. an agent solicits insurance companies to purchase shares of non exempt securities D. preorganization certificates are subscribed to by 9 investors in the state earning the agent a modest commission

D, the 9 investors are within the required 10 but, in order for a preorganization certificate to be an exempt transaction, there can be no payment of funds or commissions. Transactions by fiduciaries such as a trustee in bankruptcy (the only trustee who qualifies) and transactions with institutions such as insurance companies are exempt. The private placement exemption applies as long as there are no more than 10 offers to individual (retail) purchasers within 12 consecutive months

All of the following describe exempt transactions except A. ABC a BD, purchases securities from XYZ corp B. First national bank sells its entire publicly traded bond portfolio to Amalgamated National bank C. Amalgamated national bank sells its publicly traded bond portfolios to ABC insurance company D. Joe Smith, an employee of Amalgamated Bank, buys securities from ABC Brokerage corp

D, the purchase of securities from a broker dealer by an employee of a bank is a nonexempt transaction-it is a sale of a security by a broker dealer to a member of the public and therefore is not exempt. Exempt transactions are most often identified by whom the transaction is with rather than by what type of security is involved

Which of the following are exempt securities I. securities guaranteed by domestic banks II. Securities issued by the government of Canada III. securities issued exclusively for religious purposes IV. federal covered securities

I, II, III, and IV, among the exempt securities under the USA( meaning exempt from the registration requirement) are securities issued by banks, securities issued by a recognized foreign government, securities issued by religious and other nonprofit organizations, and federal covered securities