Chapter 4-6 review

admin may suspend reg pending final determination is called?

summarily

In order for a security to lawfully be sold or offered under the USA, it must meet at least one of the following requirements EXCEPT that it is registered with the SEC that it is sold in an exempt transaction that it is properly registered with the Administrator that it is an exempt or federal covered security

that it is registered with the SEC

lifting of a stop order (by admin) is called?

vocated

Registration by qualification is effective 20 days after the filing date when the federal registration becomes effective when determined by the Administrator no earlier than 10 days after the filing date

when determined by the Administrator

Under the Uniform Securities Act, which of the following would NOT be considered an exempt transaction? An agent sells U.S. treasury bonds to an individual client An executor liquidates the estate's portfolio The sale of ABCD common stock, traded on the OTC Link, to an insurance company The sale of an unregistered nonexempt security to an individual client at that client's request

An agent sells U.S. treasury bonds to an individual client

which type of annuity is not a sec?

FIXED

securities that are issued by management companies, UITs, on NYSE or exempt from Securities Act of 1933 are?

Fed covered sec

Which of the following statements regarding state registration of securities is TRUE? Registration by coordination is effective on the 10th day after filing with the Administrator. Registration by qualification is effective after 30 days. Registration by coordination is effective concurrent with federal registration. Notice filing is effective when ordered by the Administrator.

Registration by coordination is effective concurrent with federal registration.

what rule deals with exempt sec?

Rule 147

what rule deals with exempt transactions?

Rule 506

regulating issuing of corporate sec to public is what act?

Securities Act of 1933

An investment adviser is servicing a group of physicians and will offer a discounted fee to the doctors in that particular partnership. In what way would this be considered ethical?

This would be permitted as long as a disclosure is made in the IA's brochure that fees are negotiable.

is a promissory note a sec?

YES

As defined in the Uniform Securities Act, the term "offer" or "offer to sell" includes all of the following EXCEPT an offer of convertible securities and warrants an offer of a special stock dividend in return for additional payments a purported gift of assessable stock a loan with a stated interest rate payable upon demand

a loan with a stated interest rate payable upon demand

SEC Rule 501: Accredited Investors are?

bank insurance company reg IC employee bene plan with 5 mm charitable organization with 5 mm entities of accredited investors person with 200k + salary

when must firms disclose its capacity and receive client consent?

by completion of trade

not included in BD fees are?

commissions mark ups/downs advisory fees

refusal to obey subpoena is called?

contumacy

person who is subject of injunction

enjoined

if public offering of sec is in more than one state you must?

file with SEC

Recommendation entials?

firm to client

An investment adviser who trades on material nonpublic information is generally going to increase the returns in client accounts. in violation of the antifraud provisions of the Uniform Securities Act. straddling a commingled arbitrage. engaging in the unethical business practice known as front running.

in violation of the antifraud provisions of the Uniform Securities Act.

exempt transactions?

isolated nonissuer trans unsolicited brokerage trans underwriter trans institutional inv trans limited offering trans with existing sec holders preorganization certs

exemptions from brochure include:

mutual funds insurance companies reg IC

when don't the proceeds of a sale go to the issuer?

non issuer transaction

sale of sec to individual with 5 mm net worth, is exempt or nonexempt?

nonexempt

A closed-end investment company is registered under the Investment Company Act of 1940. Its shares trade on the Nasdaq Stock Market. To qualify their shares for sale in the state, they would probably use notice filing supplementation qualification coordination

notice filing

Section 506(c) does what?

permits offering to be advertised

when a fed covered sec files in state its called?

qualification

what is a substantial prepayment of fees?

$600/contract year

If the Administrator has summarily suspended an investment adviser representative's registration, the registrant may request a hearing by written request and the hearing will be granted within 15 days 60 days 45 days 30 days

15 days

Form ADV Part 2 contains?

2A: firm brochure 2A appendix: wrap-fee program brochure 2B: brochure supplement

if an IAR commits criminal violation of USA how long are they subject to legal action for?

5 years

Under the Securities Act of 1933, commercial paper is exempt from the prospectus delivery requirements or registration, unless its maturity is more than how many months? 3 months 12 months 6 months 9 months

9 months

Under the Uniform Securities Act, the Administrator may deny or revoke the exemption from registration for which of the following? A security issued by a nonprofit organization Investment contracts of employee benefit plans An exempt transaction not involving a federal covered security

ALL

unlawful for any person to sell any sec unless it is reg/exempt or a fed covered sec is called?

Summary

Section 305 of USA

The registration is valid for 1 year from the effective date, unless the underwriter or issuer still has some unsold shares.

exempt sec include?

U.S. gov CAN municipal insurance company depository institution public utility fed covered non-profit issued employee bene plan trust commercial paper

can an admin revoke reg is IA has been convicted of non-sec related felony?

YES

any person who distributes or proposes to issue security is?

issuer

when do the proceeds of a sale go to the issuer?

issuer transaction

it is possible to increase # of shares in offering if?

no price change underwriters discounts/commissions not changed

solicited transaction in a nonexempt sec, is exempt or nonexempt?

nonexempt

ABC Furniture Company wishes to raise capital by issuing some securities in its home state. The CEO of the company feels that registration with the Administrator is unnecessary because the issue is exempt. Should ABC be ordered to appear at a hearing, the burden of proving its issue is exempt is on the company the CEO the Administrator the hearing panel

the company