unit 7

what is the timeline that an investor will be entitled to receive the final prospectus if they are purchasing an APO of non-NMS securities?

40 days

rule 147 allows certain companies to be exempt from registration with the SEC so long as they need certain criteria. what is the listed criteria to qualify for this role?

80% of issuers revenue must be generated from the state it resides 80% of the issuers assets are located in the state in which it resides. 80% of the issuers proceeds will be used in the state in which it resides.

what is the time like the an investor will be entitled to receive the final perspective if they are purchasing an IPO of a non-NMS security?

90 days.

The ABC chemical corporation wishes to advertise its upcoming offering of common stock in a tombstone advertisement that they , the issuer, will place. when placing the tombstone advertisement, which of the following would be least likely to appear?

The names of the investment bankers underwriting the issue. in most cases the names of the firms underwriting the issue only appear in the tombstone ad when they, rather than the issuer have placed the ad. in this instance, the tombstone advertisement placed by the issuers, the names of the underwriters would not likely appear. The advertisement may include the number of shares being offered.

which of the following situations may not be disclosed to a potential buyer while a security is in registration?

a brokerage report shows the security is properly undervalued. brokers reports may not be distributed while a security is in registration. expected dates for pricing and road shows may be communicated to two potential buyers the underwritings are named in the issues registration statement.

a person who looks to provide advice to a city government concerning the issuance of a municipal debt security would be best described as...

a municipal advisor.

during the cooling off. of a new registration filed with the SEC

a red herring may be given to perspective investors.

The aftermarket prospectus requirement following an APO for exchange listed securities is

zero days. an exchange listed additional public offering has no aftermarket prospectus requirements.

modulus ink a NYSC listed manufacturing company, was founded by a clearance mod. Clarence is now 82 years old and is looking to divest his significant interest in modulus to capitalize the mod family foundation, a charity. he has enlisted the help of seacoast securities, a regional investment banker based in Seattle, to run the sale. this is an example of

a secondary offering. The shares that are to be sold belong to a person, not the issuer. this is a secondary offering. an APO or an IPO are both issuer transactions. a charitable remainder unit trust credit is an estate planning tool often used by wealthy, but not something you likely will see on this exam.

each of the following provides an exemption from the registration requirement of the securities act of 1933 except... regulation d. rule 147. regulation a+ access equals delivery rule.

access equals delivery rule. securities offerings may qualify for exemption from the registration statement and prospectus requirements from the securities act of 1933 under regulation a plus regulation d rule 147 and regulation s.

modulus incorporate, and NYS listed manufacturing company, was founded by Clarence mod. Clarence is now 82 years old and is looking to divest his significant interest in modulus to capitalize the mod of family foundation, a charity. he has listed the help of seacoast securities, a FINRA member broker dealer based in Seattle, to run the sale. seacoast securities is acting as...

an investment banker. seacoast is acting as an investment banker, assisting a person in a secondary offering

regarding the registration statement filed with the SEC when new securities are to be issued, all of the following are true except

deocracy and adequacy of the registration documents is a responsibility of the underwriters. while the underwriters may assist the issuer in preparing and finally the registration statement, the accuracy inadequacy of the registration documents is the responsibility of the issuer. full disclosures also made on a number of issues including but not limited to the names and addresses of the company officers and a description of how the sale proceeds will be used

what is the timeline that investor will be entitled to the final prospectus if they are purchasing an APO of an NMS security?

for APOs of animal securities it is zero days. there is no requirement.

what is the timeline that an investor will be entitled to the final perspective when they buy a new security in the secondary market if the IPO is an NMS security?

for IPOs of NMS securities it is 25 days

All the following are restricted persons except... finders and fiduciaries acting on behalf of the underwriters. portfolio managers. employees of members. individuals owning 5% of a member firm.

individuals owning 5% of a member firm. rules prohibit member firms from selling public offerings stock inequities to any account in which restricted persons are beneficial owners. restrict persons include financial industry regulatory authority and remembers, employees of member firms, finders and fiduciaries acting on behalf of the underwriters, portfolio managers, and any person owning 10% or more of a member firm. also included are the immediate family members of any restricted person.

private placements are primarily sold to...

institutional investors. institutional investors are The overwhelming majority of buyers in private placements, although private placement securities may also be sold to a small number of wealthy individuals who meet certain criteria.

Mrs Jones is an employee of a member firm and as such is a restricted person regarding the purchase of new issues. she belongs to an investment club and has a 1% interest in the club's brokerage account. The investment club...

is not a restricted account and will be allowed to purchase equity shares for an initial public offering. because the restricted person's interest in the club brokerage account does not exceed 10%, the investment club account is not considered a restricted account. if not restricted the club can purchase shares of an equity issue at the public offering price if it chooses to.

regarding the purchase of new equity issues and account where the restricted person has a beneficial interest would be allowed to purchase new shares at the public offering price...

only if the interest does not exceed 10%.

under the security's act of 1933, which of the following is a non-exempt security?

commercial paper. this is a mutual fund. mutual funds are not exempt securities under the securities act of 1933.

regarding the issuance of new securities to the public, which of the following are true? registrations become effective within 10 business days of the securities and exchange commission filing. The securities in exchange commission review of a new issue filing must always be longer than 20 days. underwriters are permitted to accept orders for securities during the securities and exchange review.. The securities act of 1933 provides criminal penalties for fraud

The securities act of 1933 provides criminal penalties for fraud. The SSC review or cooling off. must last a minimum of 20 days before the SEC releases the securities for sale to the public. solicitations and the acceptance of orders may never occur before the effective date.

public offerings of securities are regulated under

The securities act of 1933.

regarding the purchase of a new equity issues by restricted persons, which statement is true? an investment club is permitted to buy a new equity issues at the public offering price. an investment club is not permitted to buy new equity issues at the public offering price. an investment club that has eight members with equal ownership, one of which is a registered representative, is permitted to buy a new equity issue of the offering price. an investment club that has 12 members with equal ownership, one of which is a registered representative, is permitted to buy a new equity issue at the offering price.

an investment club is permitted to buy a new equity issues at the offering price. an investment club that has 12 members with equal ownership, one of which is a registered representative, is permitted to buy new equity issues at the offering price. a registered representative is a restricted person under the rules regarding the purchase of new equity issues. in this case the registered representative owns 8 1/3% (100% / 12 = 8 1/3%) which is under the 10% maximum amount.

a company that offers sales of another company's securities would be best described as...

an underwriter.

The securities act of 1933 protects investors who buy new issues by doing all of the following except... requiring an issue or to provide full and fair disclosure. providing criminal penalties for fraud in the issuance of new securities. regulating the underwriting distribution of primary and secondary issues. requiring the licensing of persons affiliated with broker dealers.

requiring the licensing of person's affiliated with broker dealers. this is mandated under the securities exchange act of 1934, not the security's act of 1933. The 1933 act protects investors who buy new issues regulating, among other things, registration of new issues, underwriting, full disclosure, and the potential for fraud in the issuance of securities

what is the function of a shelf registration?

shelf registration allows the issuer to sell portions of a registered shelf offering over a 2-year period without having to register the security for security's offered via a shelf registration, a supplemental prospectus must be filed with the SEC before each sale.

regarding the sale of a new issue, a customer is considered a restricted person if the person is

working as a salesperson who works for the issuing firms underwriter. restricted persons include financial industry regulatory authority member firms and their associated persons, such as a salesperson working for an underwriter, plus immediate family members. immediate family members do not include ants and uncles or grandparents.

a corporation seeking to raise funds in order to expand its manufacturing capacity would do so in...

the capital market.