1933 Act

Under the Securities Act of 1933, the sale of stock of a state bank is exempt from which of the following? Prospectus requirements. Antifraud provisions. Registration requirements. A)I only. B)I, II and III. C)I and III. D)II and III.

C)I and III. Both the Uniform Securities Act and the Securities Act of 1933 exempt securities issued by banks, trusts, or savings and loans. While the security is exempt under both acts from registration and prospectus delivery requirements, it is never exempt from the antifraud provisions of the acts.

Under the Securities Act of 1933, the definition of a prospectus includes: an offer of a security made orally. a tombstone advertisement for a security. an offer of a security made in a personal letter. A)I and III. B)I, II and III. C)III only. D)II and III.

C)III only. A prospectus is a communication made in writing or by radio or TV that offers a security for sale. An oral offer would therefore not be a prospectus. Tombstone advertisements are specifically excluded from the definition of prospectus. If such a letter were not preceded or accompanied by an official prospectus that contained all the required information, the sender of the letter would have violated the Securities Act of 1933.

All of the following securities are exempt from the registration provisions of the Securities Act of 1933 EXCEPT: A)commercial paper and bankers' acceptances that have maturities of no more than 270 days. B)state and municipal bonds. C)commercial bank holding company securities. D)national and state bank securities.

C)commercial bank holding company securities. Commercial bank holding companies are corporations that have to register with the SEC. State and municipal bonds do not have to be registered under the Securities Act of 1933. Commercial paper and bankers' acceptances that have maturities of no more than 270 days are exempt from the registration provisions. National and state banks are regulated by various state and federal agencies.

Under the Securities Act of 1933, a registration statement of an issuer must contain all of the following information EXCEPT: A)the identity of the officers and directors and the extent of their holdings in the issuer. B)the business of the issuer. C)the names of all the owners of the company's stock. D)the current balance sheet and profit/loss statements.

C)the names of all the owners of the company's stock. The names of all of the owners of the company's stock are not required. The identity and stock holdings of the officers, directors, and holders of more than 10% of the company's voting stock, as well as the principal business of the issuer and current financial information, must be disclosed.

Under the Securities Act of 1933, which of the following is NOT a security? A)Convertible stock. B)A stock right. C)A stock warrant. D)A fixed life insurance contract.

A fixed life insurance contract. .

What is a security

A security is any note, stock, bond, certificate of interesRt, or participation in any profit sharing arrangement, investment contract, certificate of deposit for a security, interest in oil, gas, or mining rights, or any investment commonly considered a security. (Generally, it is an investment contract wherein the investor is passive and expects a return on the investment through the efforts of others.)

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? A)9 months. B)12 months. C)6 months. D)3 months.

A)9 months. For exemption under the Securities Act of 1933, commercial paper must mature in nine months or less.

Which of the following securities issues must be registered with the SEC under the Securities Act of 1933? Publicly traded DPPs. Variable annuities. Open-end funds. Closed-end funds. A)I, II, III and IV. B)II and III. C)I and II. D)III and IV.

A)I, II, III and IV. The Securities Act of 1933 requires the registration of all new nonexempt issues of securities sold to the public. In general, exempt issues include municipal securities, U.S. government securities, bank issues, and nonprofit organization securities. The securities in this question are all nonexempt.

dentify the accredited investors from the list below. An individual with a net worth of $800,000 and an annual salary of $150,000 A married couple with a net worth of $2 million consisting of a home worth $500,000 and pension plans and other assets worth $1.5 million An insurance company A corporation with a net worth of $3 million A)II and III B)III and IV C)I and II D)I and IV

A)II and III Institutional investors such as insurance companies are regarded as accredited investors. An individual with a net worth of $800,000 and a salary of $150,000 does not meet either of the 2 qualification criteria for individuals, while the married couple with a net worth of $2 million, which, after excluding the value of the primary residence is still in excess of $1 million, is accredited. In order for a corporation to meet the definition, it must have a net worth of at least $5 million.

Who is liable with regards to a registration statement (ppl who signed etc)

Although those who signed are liable, there is a list of others who also might be, including members of the board of directors, legal counsel, accountants, etc.

Under the Securities Act of 1933, the Securities and Exchange Commission has the authority to: issue stop orders. approve new issues. review standard registration forms. A)I and II. B)I and III. C)II and III. D)I, II and III.

B)I and III. During the cooling-off period, the SEC reviews registration statements and may issue stop orders. The SEC does not approve securities; it only clears them for distribution to the public.

Under the Securities Act of 1933, which of the following are exempt securities? Securities issued by the U.S. government, government agencies, and any state or municipality. Any security issued by a religious, educational, charitable, or not-for-profit institution. Any security issued by a federal or state bank, savings and loan association, building and loan association, or similar institution. Any interest in a railroad equipment trust. A)II and IV. B)I, II, III and IV. C)I and III. D)I, II, and III.

B)I, II, III and IV.

Rule 482 of the Securities Act of 1933 deals with: A)registration under coordination. B)omitting prospectuses. C)private placements. D)intrastate offerings.

B)omitting prospectuses. Rule 482 describes a form of allowable mutual fund advertising, commonly referred to as an omitting prospectus.

Under the Securities Act of 1933, a registration statement for a security generally becomes effective how many days after it is filed? A)30 days. B)31 days. C)10 days. D)20 days.

D)20 days. A registration statement for a security becomes effective 20 days after it is filed, unless the SEC orders a delay.

Which of the following statements regarding a red herring is NOT true? A)A red herring is used to accept indications of interest from investors. B)The final offering price does not appear in a red herring. C)Additional information may be added to a red herring at a later date. D)An agent may accept funds to be placed in escrow until the effective date if the request to do so is made by a potential purchaser.

D)An agent may accept funds to be placed in escrow until the effective date if the request to do so is made by a potential purchaser. An agent is not permitted to accept funds from potential purchasers of a new issue before the effective date.

The SEC determines that misleading statements have been made in a registration statement. In addition, material information has been omitted. Which of the following persons could face civil liability charges? The attorney who prepared the registration statement A member of the board of directors who did not sign the registration statement The issuer's CEO The underwriter of the issue A)III and IV B)I, III and IV C)I and III D)I, II, III and IV

D)I, II, III and IV Every person who signed the registration statement is liable under the Securities Act of 1933. In addition, any director, whether or not that individual's signature is on the registration statement; the attorney; the accountant; and the underwriter. Among the required signatures is that of the CEO.

Under federal law, a registered agent could offer securities for sale during the underwriting period and before the effective date of registration in which of the following circumstances? A)If the securities are not exempt. B)With the use of a red herring. C)Only if a bona fide registration statement has been properly filed with the state Administrator and the SEC. D)Never.

Never This time in the life of an underwriting is commonly referred to as the cooling-off period, during which indications of interest may be accepted with the use of a red herring. No offers or sales may be made before the registration's effective date.

Does the COO sign the reg statement

No

Other names for 1933 Act

The act is also referred to as the Full Disclosure Act, the Paper Act, the Truth in Securities Act, and the Prospectus Act

What is not considered a security

The definition of a security does not include direct ownership of real estate, commodities futures contracts (e.g., corn, wheat), collectibles, precious metals, or life insurance or annuity contracts that have fixed payouts

What is/isn't a prospectus

Written = Yes ORal = no

Does the CEO sign the reg statement

Yes

Requirements for a person to be an Accredited investor

any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1 million, excluding the value of the primary residence, or has earned in excess of $200,000 in each of the past 2 years and expects to earn more than $200,000 in the current year ($300,000 for married couples) is an accredited investor.

Exempt or not? 1933 Bonds issued by an insurance company.

exempt under the Uniform Securities Act, but not under the Securities Act of 1933 Act.

Does a prospectus need to be delivered to everyone solicited by an agent

no

Under federal law, the statute of limitations for civil liability is A)two years after discovery or three years after the action, whichever is sooner B)one year after discovery of the action C)two years after the action D)one year after discovery or three years after the action, whichever is sooner

one year after discovery or three years after the action, whichever is sooner In the federal regulations, the statute of limitations for a civil action is the sooner of one year after discovery or three years after the action. Under the USA, it is the sooner of two years after discovery or three years after the action.

Under federal law, civil suits must be filed within

one year of the date of discovery of the improper action or three years after the sale, whichever comes sooner

USA requires prospectus delivered by

prior to the sale, not the offer

Does the CFO sign the reg statement

yes

Exempt or not? 1933 Any interest in a railroad equipment trust.

yes Any interest in a railroad equipment trust is specifically listed as exempt under the Securities Act of 1933

Exempt or not? 1933 Bonds offered and sold exclusively to persons who live in the same state in which the issuer is headquartered and does business.

yes Bonds offered and sold exclusively to persons who live in the same state in which the issuer is headquartered and does business meet the qualifications of an intrastate issue because the securities are offered and sold only to residents of the state in which the issuer itself resides, and the issuer does business in that state.

Rule 482 of the Securities Act of 1933 permits the use of an omitting prospectus if it does NOT: A)contain an application to purchase shares of the fund. B)omit a statement of the fund's expense ratio. C)make reference to the mutual fund's past performance. D)describe how and where to obtain the fund's prospectus.

A)contain an application to purchase shares of the fund. An omitting prospectus is a mutual fund tombstone advertisement. It must include information on obtaining a prospectus and may include the fund's past performance. It will never include an application to purchase shares and may or may not make mention of the fund's expense ratio.

For an issue to meet the exemptive requirements of Rule 147 of the Securities Act of 1933: 80% of the assets of the issuer must be within the state of issuance. 80% of the proceeds of the offering will be used within the state of issuance. 80% of the purchasers of the offering must be residents of the state of issuance. 80% of the revenue of the issuer must be derived from operations in the state of issuance. A)II and IV. B)I, II and IV. C)I, II, III and IV. D)I, II and III.

B)I, II and IV. 100% of the purchasers must be residents of the state in which the securities are being issued to qualify for the intrastate exemption under SEC Rule 147.

The federal Securities Act of 1933 has certain requirements for those selling new issues. One of those requirements is to: A)deliver a copy of the prospectus prior to the sale. B)deliver a final prospectus no later than with confirmation of the sale. C)be properly licensed prior to making the offering. D)deliver a preliminary prospectus to any person who has purchased the new issue

B)deliver a final prospectus no later than with confirmation of the sale. The Securities Act of 1933 requires that a prospectus dealing with a new stock issue be delivered to a purchaser no later than with the confirmation of the trade. Preliminary prospectuses have no relevance once the issue is effective. The Securities Act of 1933 does not deal with the registration requirements of agents.

Exempt or not? 1933 Stock listed on the New York Stock Exchange.

exempt under the Uniform Securities Act, but not under the Securities Act of 1933 Act

Rule 501 of the Securities Act of 1933 creates a category of person known as an accredited investor. Included in that definition would be all of the following EXCEPT: A)insurance companies. B)investment adviser representatives. C)banks. D)pension plans.

)investment adviser representatives Although the individual IAR might personally qualify as an accredited investor, the rule does not offer a blanket inclusion to those securities professionals.

Under the Securities Act of 1933, securities issued by charitable organizations are exempt if: A)the net earnings from the organization are paid to less than 10 private stockholders. B)the organization is funded by government grants. C)no commissions are paid on the distribution of shares. D)the organization is a nonprofit company.

)the organization is a nonprofit company.

Which of the following statements is TRUE regarding the civil liability provisions of the Securities Act of 1933? A)If the registration statement contains misrepresentations that were made deliberately, criminal penalties, in addition to civil ones, may be levied. B)Only those who actually signed the registration statement are exposed to potential liability. C)The statute of limitations for civil suits is three years from the date of discovery. D)Purchasers may waive their rights to suit under the civil liability provisions if done so by the purchase contract.

A)If the registration statement contains misrepresentations that were made deliberately, criminal penalties, in addition to civil ones, may be levied. Under federal law, civil suits must be filed within one year of the date of discovery of the improper action or three years after the sale, whichever comes sooner. Purchasers may not waive their rights under the act for any provision.

Which of the following securities is NOT exempt from the Securities Act of 1933? A)Real estate investment trusts. B)U.S. government issues. C)Municipal issues. D)U.S. government agency issues.

A)Real estate investment trusts. REITs are nonexempt securities subject to the registration and new issue disclosure provisions of the Securities Act of 1933. Agency issues, U.S. government issues, and municipals are exempt.

XYZ Corp. will issue a new security and distribute it through a public offering. Under the Securities Act of 1933, which of the following is NOT required to be included in XYZ's registration statement? A)The name and address of XYZ's personnel manager. B)The name and address of Jan Michael, who owns 11% of XYZ's stock. C)The identity of the underwriter. D)An estimate of the proceeds that will be raised through the offering and how that money will be used.

A)The name and address of XYZ's personnel manager. A registration statement must contain the identity of owners of more than 10% of the issuer's stock, an estimate of the proceeds and a description of the use to which they will be put, and the identity of the underwriter, amongst many other things. It must also identify all the issuer's officers and directors, their holdings of the issuer's securities, and their salaries. Since the description of the personnel manager does not use the term officer or director, this employee need not be identified in the registration statement.

Jim is buying stock through a private placement. Under the Securities Act of 1933, which of the following statements is TRUE? A)The stock need not be registered with the SEC. B)Jim must notify the SEC that he is buying private placement securities. C)Jim will receive a letter stating his ownership. D)The stock must first be fully registered with the SEC.

A)The stock need not be registered with the SEC. Private placements are exempt transactions under Regulation D of the Securities Act of 1933 and are therefore exempt from registration.

XYZ Corporation is registering a new issue of common stock. A final prospectus must be delivered within the statutory time limits to: A)any person who purchases shares of the issue. B)any person solicited by a registered agent. C)any person who is employed by the issuer. D)any person who has submitted an indication of interest.

A)any person who purchases shares of the issue. Under the Securities Act of 1933 and the Uniform Securities Act, a prospectus must be given to any purchaser of a common stock, but not necessarily to those solicited by an agent. In fact, the USA only requires the prospectus to be delivered prior to the sale, not the offer.

In 1933, Congress passed the Securities Act which required the registration of new issues before their offering to the public. However, the law contained a number of exemptions including that for: A)equipment trust certificates issued by a regulated common carrier. B)stock issued by regulated insurance company. C)obligations of the Canadian government. D)corporate common stock listed on the NYSE.

A)equipment trust certificates issued by a regulated common carrier. Although each of these is considered an exempt security under the Uniform Securities Act, only the securities of a regulated common carrier carry an exemption from federal registration.

Under the Securities Act of 1933, which of the following does not meet the definition of a prospectus? A)An advertisement in a newspaper describing the benefits of a certain mutual fund B)A telephone call from ​an agent of a broker​-dealer​ to a client advising the purchase of a security C)A publicity release that describes a security D)A newsletter from a brokerage firm announcing the availability of a security

B)A telephone call from ​an agent of a broker​-dealer​ to a client advising the purchase of a security Any written communication that offers a security for sale-including a newspaper and media communications, such as radio and television offers-is considered a prospectus. This definition excludes individual offers made orally and discussions between an agent and a customer. A publicity release that describes a security, a newsletter from a brokerage firm announcing the availability of a security, and an advertisement in a newspaper describing the benefits of a certain mutual fund may be considered prospectuses. A telephone call from an agent to a client advising the purchase of a security is not considered a prospectus because it involves an individual telephone solicitation between an agent and a client.

Under the Securities Act of 1933, an accredited investor may be: -a bank, insurance company, investment company, or employee benefit plan valued in excess of $5 million . -a wealthy person in some cases. -partners, officers, and directors of the issuer for a particular issue. A)I and III. B)I, II and III. C)I only. D)II only.

B)I, II and III. Accredited investors are financial institutions, wealthy persons meeting specific requirements, and (for a particular issue) persons involved in the management of the issuer.

Which of the following are NOT exempt from the antifraud provisions of the Securities Act of 1933? U.S. government securities. Investment contracts issued by employee benefit plans. Securities issued by federal banks. A)I and III. B)I, II and III. C)I and II. D)II and III.

B)I, II and III. While the Securities Act of 1933 provides exemptions from full registration for certain securities, an exempt security is exempt from the registration and prospectus delivery requirements, but not from the antifraud provisions of the act. This is the same as the Uniform Securities Act in that certain securities may be exempt from full registration and prospectus delivery requirements, but they are not exempt from the antifraud provisions of the act.

Under the Securities Act of 1933, which of the following are accredited investors? Insurance companies. Banks. Employee benefit plans with over $5 million in assets. Investment companies. A)I and III. B)I, II, III and IV. C)II and IV. D)III and IV.

B)I, II, III and IV. Accredited investors are financial institutions, wealthy persons, and, for a particular issue, persons involved in the management of the issuer. Certain institutional purchasers such as banks, insurance companies, investment companies, and employee benefit plans that have total assets in excess of $5,000,000 are included in the SEC's definition. In addition, any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1 million, excluding the value of the primary residence, or has earned in excess of $200,000 in each of the past 2 years and expects to earn more than $200,000 in the current year ($300,000 for married couples) is an accredited investor.

Under the Securities Act of 1933, when registering securities with the SEC, who must sign the registration statement? The chief executive officer (CEO). The chief operating officer (COO). A majority of the board. The chief financial officer (CFO). A)I, II and IV. B)I, III and IV. C)I, II, III and IV. D)I and IV.

B)I, III and IV. The principal executives of the company involved with money and a majority of the board of directors are required to sign the registration statement attesting to the facts presented as being true to the best of their knowledge and belief. This includes the chief executive officer, chief financial officer, and a majority of the board, but not the chief operating officer.

A broker-dealer is the lead underwriter in a new issue. During the period this new security issue is in registration, which of the following will usually be distributed? -Subscription forms enabling clients to place a down payment on the issue. -A red herring prospectus. -The company's latest research report on that stock. -Indication of interest forms. A)II and III. B)II and IV. C)III and IV. D)I and II.

B)II and IV. During the period a new securities issue is in registration, the underwriters usually prepare and distribute the red herring prospectus along with forms to indicate interest in the issue. No firm orders or payment may be accepted prior to the date the issue is effective for sale.

Under the Securities Act of 1933, which of the following securities are exempt? Bonds issued by an insurance company. Stock listed on the New York Stock Exchange. Any interest in a railroad equipment trust. Bonds offered and sold exclusively to persons who live in the same state in which the issuer is headquartered and does business. A)I, II and IV. B)III and IV. C)II, III and IV. D)I, II and III.

B)III and IV.

The first of the federal securities acts was the Securities Act of 1933. This act requires persons selling a new offering to their clients to: A)be properly registered prior to making the offer. B)deliver an effective (final) prospectus no later than with confirmation of the sale. C)deliver a copy of the registration statement no later than with confirmation of the sale. D)deliver a preliminary (red herring) prospectus prior to the sale.

B)deliver an effective (final) prospectus no later than with confirmation of the sale. The Securities Act of 1933, sometimes referred to as the "paper act", requires that an effective, or final prospectus be delivered to all purchasers of a new offering no later than with confirmation of the sale. It is not required that purchasers receive a red herring prospectus and only the SEC gets copies of the registration statement. Yes, they must be properly registered to make the offer (and sale), but that comes under the "people act", the Securities Exchange Act of 1934.

Under the Securities Act of 1933, a registration statement for a security must be signed by: A)the issuer's chief executive officer and the underwriter. B)the issuer's chief executive officer, chief financial officer, and a majority of the issuer's board of directors. C)a majority of the issuer's board of directors and the underwriter. D)a majority of the issuer's board of directors only.

B)the issuer's chief executive officer, chief financial officer, and a majority of the issuer's board of directors. The underwriter's signature is not required on a registration statement, but the chief executive officer, the chief financial officer, and a majority of the board of directors must all sign.

Under the Securities Act of 1933, which of the following securities is required to register with the SEC? A)GNMA pass-through certificates. B)Tupelo Mississippi Bridge revenue bonds. C)Debentures of First Newtown Bank Holding Corporation. D)5-year Treasury notes.

C)Debentures of First Newtown Bank Holding Corporation. Bank holding company securities are not exempt from registration requirements under the Securities Act of 1933. Treasury securities, agency securities (such as GNMA-pass through certificates), and municipal securities (such as revenue bonds) are exempt from registration requirements under the act.

Under the Securities Act of 1933, the SEC may: -conduct formal investigations of persons under its jurisdiction. -make, amend, and rescind rules. -arrest and detain suspected violators, subject to -the observance of due process and the preservation of citizens' rights. A)I, II and III. B)I only. C)I and II. D)I and III.

C)I and II. The SEC has the power to make, amend, and rescind rules in administering the securities laws. The SEC may also conduct a formal investigation whenever it deems it necessary to enforce federal securities laws. In conducting a formal investigation, the SEC may administer oaths, obtain written statements, subpoena witnesses, take evidence, and require the production of books and records. The SEC does not have the power to arrest and detain suspects.

ABCO Materials, Inc., is in the process of raising money from the public for the first time. Which of the following must be disclosed in ABCO's registration statement filed with the SEC? Biographical sketches of each of the members of the board of directors as well as ABCO's principal officers. Expected use of the proceeds of the offering. Performance of the company's stock over the last five years or since the founding of the company, whichever is the shorter period. Public offering price. A)I and IV. B)III and IV. C)I and II. D)II and III.

C)I and II. A registration statement will always include the expected use of the proceeds of the offering as well as short biographies of the members of the board of directors (and key officers as well). This question stated it was the company's IPO, so there could not be any previous stock performance, and the public offering price is not determined until the effective date.

Under the Securities Act of 1933, the definition of an issuer would include: a government entity issuing exempt securities. a corporation issuing securities in an exempt transaction. an antique dealer selling items from a collection of rare books. A)II and III. B)III only. C)I and II. D)I, II and III.

C)I and II. An issuer is a person who issues a security, whether or not the security is exempt. In the question, the antique dealer is issuing collectibles, not securities.

To be in compliance with the Securities Act of 1933, the sale of which of the following securities would require delivery of a prospectus? -Primary offering of a closed-end investment company registered under the Investment Company Act of 1940. -Primary offering of 5-year U.S. treasury notes sold to an individual investor. -Private placement sold under the provisions of Regulation D. -Sale of shares of an open-end investment company whose first public offering was 23 years ago. A)II and III. B)I and II. C)I and IV. D)III and IV.

C)I and IV. Any primary offering, unless the security is exempt, requires timely delivery of a prospectus. Treasury notes and private placements are exempt.

Under the Securities Act of 1933, which of the following would be considered a prospectus? Tombstone advertisement. Television advertisement that makes full disclosure of all material facts. Offer communicated over the telephone. A)I and III. B)I and II. C)II only. D)III only.

C)II only. A prospectus is any communication that offers a security for sale, including newspaper, radio, and television offers. Tombstone announcements are excluded from the definition. Also excluded are oral offers, discussions between an agent and a customer, and individual telephone solicitations. However, written communications to a customer may be considered a prospectus, in which case full disclosure of information must be included to avoid fraud charges. Tombstone advertisements are limited to identifying the issuer, price, amount, and type of security offered and where a prospectus and the security may be obtained.

Under the USA, each of the following materials may be distributed if an issuing company has applied for registration but is not yet cleared for sale EXCEPT: A)tombstone advertising. B)a preliminary prospectus. C)an application with a request for a down payment. D)a red herring.

C)an application with a request for a down payment. Prior to clearance, a red herring or preliminary prospectus (a disclosure document) may be distributed in response to those customers who express interest in the offering. While rarely used before the effective date, a tombstone advertisement may be published while the issue is in registration. The red herring is only used to solicit indications of interest; no orders or funds may be accepted before the effective date.

Under federal law, the statute of limitations for civil liability is: A)one year after discovery of the action. B)two years after the action. C)one year after discovery or three years after the action, whichever is sooner. D)two years after discovery or three years after the action, whichever is sooner.

C)one year after discovery or three years after the action, whichever is sooner. In the federal regulations, the statute of limitations for a civil action is the sooner of one year after discovery or three years after the action. Under the USA, it is the sooner of two years after discovery or three years after the action.

The Securities Act of 1933 requires securities issued by all of the following to register and be subject to prospectus provisions EXCEPT: A)foreign governments with which the United States maintains diplomatic relations. B)corporations involved in interstate commerce. C)the U.S. government. D)investment companies.

C)the U.S. government. The Securities Act of 1933 does not require U.S. government securities to be issued by prospectus. The act covers the issuance of securities by companies engaged in interstate commerce. Investment company shares must be sold by prospectus. The exemption for securities issued by foreign governments is found in the Uniform Securities Act, not the federal law.

Which of the following are characteristics of the Securities Act of 1933? Requires registration of exchanges. Called the Truth in Securities Act. Requires full and fair disclosure of material facts. Enabled the Federal Reserve Board to determine margin requirements. A)I and III. B)II and IV. C)I and II. D)II and III.

D The Securities Act of 1933 regulates new issues of corporate securities sold to the public. The act is also referred to as the Full Disclosure Act, the Paper Act, the Truth in Securities Act, and the Prospectus Act. The purpose of the act is to require full, written disclosure about a new issue. The Securities Exchange Act of 1934 requires registration of exchanges with the SEC and enabled the FED to set margin requirements.

Which of the following does NOT have a federally imposed exemption from registration with the SEC? A)Securities issued or guaranteed by a state or political subdivision of a state. B)Commercial paper with maturities of 9 months or less where the proceeds are not used for capital expenditures. C)Securities issued or guaranteed by the U.S. government. D)Shares of bank holding companies traded on the New York Stock Exchange.

D)Shares of bank holding companies traded on the New York Stock Exchange Under the Securities Act of 1933, shares of bank holding companies listed on the NYSE are not exempt securities and they must be registered with the SEC. However, securities of commercial banks are exempt because they are regulated by the Controller of the Currency or some other banking agency. What might be confusing is that these NYSE listed shares are federal covered securities which makes them exempt from registration with the states. Securities issued or guaranteed by the U.S. government are exempt from registration under federal law. All securities issued or guaranteed by a state or political subdivision of a state qualify for a federal exemption. Commercial paper with maturities of 9 months or less where the proceeds are used for working capital purposes rather than the purchase of fixed assets also have federally imposed exemptions.

Charlotte is an agent of Gibraltar Securities. Her most active customer told Charlotte that he is thinking about buying 10,000 shares of a retailer's stock for which Gibraltar will be participating in the underwriting syndicate. The SEC release date for the stock is anticipated within 10 business days. What may Charlotte send to the client today? A)The final prospectus. B)The preliminary prospectus and a reprint of a popular advertisement placed by the issuing corporation. C)An order request. D)The preliminary prospectus.

D)The preliminary prospectus. Because a security is in registration until released by the SEC for public sale, only the unadulterated prospectus may be sent to parties indicating interest in purchasing the stock. Orders may not be accepted for a security while in registration. Because the final prospectus is indeed an offering document, it may not be presented until the SEC has released the security for public sale (made the security effective.)

All of the following must be sold with prospectus EXCEPT: A)a primary offering of a closed-end fund. B)an open-end common stock fund. C)an open-end U.S. government bond fund. D)a closed-end fund in the secondary market.

D)a closed-end fund in the secondary market Closed-end company shares trading in the secondary market are not new securities, so they are not required to be sold with a prospectus. However, a prospectus must be used in an initial offering of closed-end company shares. All open-end company shares must be sold with a prospectus because they are considered continuous primary offerings.

In reviewing prospectuses and registration statements, the SEC: A)guarantees the adequacy of the disclosures made in a prospectus. B)certifies the accuracy of the disclosures made in a prospectus. C)passes on the merits of a particular security covered by a registration statement. D)does not approve or disapprove of the issue.

D)does not approve or disapprove of the issue. The SEC requires full disclosure regarding a new issue so that investors can make informed decisions on the security. The SEC does not, however, guarantee the accuracy or adequacy of the information, nor does it approve or disapprove of the issue.

An issuer properly files Form D in accordance with Rule 503 of Regulation D of the Securities Act of 1933. As such, the securities that are the subject of any transaction are: A)available only to institutional purchasers. B)required to register with the SEC. C)required to register with the state(s) in which they are sold. D)federal covered securities

D)federal covered securities Securities sold under Regulation D of the Securities Act of 1933 are private placements and, under the NSMIA, are considered federal covered securities.

An issuer wishing to comply with Regulation D of the Securities Act of 1933 must file a Form D with the SEC: A)no less than 20 days prior to the first expected date of sale. B)no later than 30 days after the first sale. C)no later than the time of the first sale. D)no later than 15 days after the first sale.

D)no later than 15 days after the first sale Issuers wishing to avail themselves of the private placement exemption offered under Regulation D of the Securities Act of 1933 must file a Form D with the SEC no later than 15 days after the first sale.

Ways in which offerings under Rule 506(c) of Regulation D of the Securities Act of 1933 differ from those under Rule 506(b) include each of these EXCEPT A)all purchasers of the Rule 506(c) securities must be accredited investors as defined in Rule 501 whereas Rule 506(b) permits a limited number of sophisticated, but not accredited investors B)the issuer must take "reasonable steps" to verify that all purchasers are accredited investors while no such obligation falls upon issuers in a 506(b) offering C)general solicitation is permitted under Rule 506(c) offerings; no advertising is permitted under Rule 506(b) D)securities issued under Rule 506(c) are federal covered while those under Rule 506(b) are not

D)securities issued under Rule 506(c) are federal covered while those under Rule 506(b) are not Under the NSMIA, any security issued under the federal transaction exemption offered under Rule 506, either (b) or (c), is considered to be a federal covered security.

When a new issue of common stock is in registration, registered representatives are permitted to: A)furnish prospects with a final prospectus. B)receive indications of interest along with a good faith deposit. C)accept tentative orders. D)send a copy of the preliminary prospectus.

D)send a copy of the preliminary prospectus. An issue in registration has not yet become effective. A preliminary prospectus may be sent and indications of interest may be accepted, but no orders or money are accepted until the effective date.

Having read a tombstone advertisement for a stock, a wealthy individual calls a syndicate member to find out how to place an order. If the offering is effective, the syndicate member may: A)not send literature of any kind without verifying that the individual indeed has certain financial means. B)send an unchanged preliminary prospectus to the individual. C)send a strategically highlighted preliminary prospectus to the individual. D)send a final prospectus to the individual.

D)send a final prospectus to the individual. Because the offering has become effective for public sale, the final prospectus may be sent to interested parties. The final prospectus is not released until the effective date.