Chapter 2 Securities Registration

if it is in the public interest and the Administrator can prove that the offering would be illegal in the State, is not complete, or required filing fees have not been paid (thus, the burden of proof is on the Administrator).

Registration by coordination can be stopped by the Administrator for what two reasons ?

On date set by administrator

Registration by qualification becomes effective

becomes effective when the Administrator so determines (which is normally 30 days after filing, if there are no "problems" with the filing

Registration by qualification becomes effective:

D

Registration of a security in a State means all of the following EXCEPT: Adisclosure documents have been filed with the Administrator Badvertising and sales literature relating to the offering have been filed with the Administrator Cthe Administrator has reviewed the content and completeness of the filing Dthe Administrator has approved of the securities being offered

when the SEC registration becomes effective

Registration of securities in a State by Coordination becomes effective:

when the SECregistration becomes effective

Registration of securities in a State by Coordination becomes effective:

not securities

Retirement plans Individual retirement accounts Keogh plans401 K plans securities or not securities

D

The Administrator, in regards to the registration of securities, may do all of the following EXCEPT: Aimpound the proceeds from the sale of the securities until the issuer receives a specified dollar amount Brequire the filing of original copies of confirmed subscription agreements Crequire the delivery of a prospectus D Drequire that the state receive a portion of the offering proceeds as a condition of registration

cannot; can

The Administrator: _____ issue stop orders retroactively but , vacate them _______

retroactively; vacate

The Administrator: cannot issue stop orders ______ but can _______them retroactively

Secretary of the State

The State Administrator is supervised by the:

i and iv

Which statements are TRUE about the "burden of proof" needed to vacate a stop orderentered 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

Non-exempt transaction

a securities transaction, where the security involved must be registered in the State, and is subject to any advertising filing rules of the State.

Non-issuer transaction

a trade of a security where the issuer is not involved. This is normal secondary market trading of securities.

Offer to sell

is any attempt or offer to dispose of a security, or a solicitation of an offer to buy a security or an interest in a security, for value.

offer to purchase

is defined as every attempt to buy a security, or solicitation of an offer to sell a security, for value.

Sale

is the contract to sell a security, or an interest in a security for value

A sale

A gift of an "assessable" security

A sale

A security which is given as a "bonus" because of the purchase of securities, or other items, is considered to be part of that purchase

Issuer or Broker-Dealer

Applications to register securities in a State may be filed by:

agents, nor can they be filed by Investment Advisers.

Applications to register securities with the State cannot be filed by who?

Not for profits

Bonds issued by _______ organizations are an exempt security under Uniform State Law

not a security

Commodities or Futures contracts security or not a security

security

Commodity option contract security or not

One year

Every registration statement is effective for _____ from its effective date,

Registration by Filing

Filing can be used by established companies that have been in continuous operation for the past 3 years, who already have registered securities with the Securities and Exchange Commission

all of them

Filing of advertising with the Administrator is NOT required for: I U.S. Government securities II Municipal securities III Investment company securities IV NYSE-listed securities

10 people

For offers of pre-organization certificates to be exempt under the Uniform Securities Act, the number of subscribers is limited to how many people?

Exempt ; non exempt

Foreign government securities (that means debt, since governments don't issue stock) are ______Foreign stocks, however, are _______

Are not

Futures contracts _____ defined as securities

CD's and fixed annuities

Give example of items not defined as a security ?

amendment to the registration application

If a registration is found to be incomplete, the issuer must send the Administrator a(n):

B

If a registration is found to be incomplete, the issuer must send the Administrator a(n): Anew registration application Bamendment to the registration application Cconsent to service of process Dcertified financial statement

applicant

If the issue is being registered by qualification or filing, the burden of proof is on the ______ to show that the order should be vacated

9; $50,000; 3

In order for a promissory note to be an exempt security under the Uniform Securities Act: it must mature within _____months it must be issued in minimum denominations of $_______ it must be rated in one of the ____ highest categories by Moody's

not a security

Insurance products term life policies whole life policies endowment policies fixed annuities (however variable annuities are a security) security or not

I,II,III

Misstatements of material fact in a securities registration are violations of the Act for which of the following persons? I Issuer II Directors of the issuer III Underwriter IV Agents of the underwriter Which ones

Federal covered security

NYSE, AMEX (now renamed NYSE American) or NASDAQ listed or is a senior security of such an issuer; issued by a registered investment company; sold only to qualified investors - that is, investment managers with at least $25,000,000 under management

II,IV

Next An agent tells a customer: "Since I am not registered in your State, I cannot contact you and ask you to buy a security. However, you can call me and ask me to sell it to you, since then I am not soliciting you." Under the Uniform Securities Act: I The agent is soliciting an offer to sell from the customer II The agent is soliciting an offer to buy from the customer III The agent's actions are permitted IV The agent's actions are prohibited

5

Registration by Filing becomes effective _____ business days after the filing is complete

5 days

Registration by Filing becomes effective ____business days after the filing is complet

if it is in the public interest and the and the applicant cannot prove that the offering would not be illegal in the State

Registration by Qualification or filing can be stopped by the Administrator for what two reasons?

excluded

Stock dividends paid to existing shareholders are specifically _____from the definition of a "sale" or "offer to sell."

I

The Administrator can deny an exemption to: I Not-for-Profit issues II Municipal issues III U.S. Government issues IV Agency issues which ones

Order

The Administrator may deny or revoke a securities registration by:

sale of the securities tends to work a fraud on investors spreadtaken by the underwritersis excessive issuer's business is illegal in that State

The Administrator may issue a stop order for a securities issue "in registration" for all of the following reasons

transactions; securities

The Administrator, by order, can deny any exemption from registration for exempt ________, but not exempt ________

Secretary of State

The State Administrator is supervised by:

Gov't issues Gov't agencies Municipalities Foreign Gov't Issues already regulated by other laws

The exempt issues under State law are:

both an additional filing fee and a late registration fee must be paid and an amendment must be filed, as long as it is within 6 months of the date of sale

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 what needs to be done?

Exempt transaction

The sale of securities by issuers to financial institutions is a(n):

Registration by qualification

This is the most detailed registration procedure, because there are no Federal filings upon which the Administrator can rely.

Securities Act of 1933

To qualify for registration by coordination under the Uniform Securities Act, the issuer's securities must be concurrently registered under the provisions of the:

I,II,III

To use Registration by Coordination, an issuer must file a registration statement with: I the Securities and Exchange Commission II the Administrator of that State III FINRA Which ones

10; cant ; prohibited

Under State law, a private placement is an offer of securities to no more than __ persons , where commissions _____ be paid for sales to individual investors (they can be paid on sales to institutional investors). Advertising is _____

10; 12

Under the Uniform Securities Act, a private placement is an offer to no more than _____investors in a ____month period, where no commissions are paid

all of them

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 which ones

isolated non-issuer transaction"

Under the Uniform Securities Act, an investment adviser with no place of business in a State only does 1 trade in a non-exempt security in the State within a 12 month period. what type of transaction Is this?

All of them

Under the Uniform Securities Act, which of the following securities issued by PDQ Corporation are exempt, if PDQ is an American Stock Exchange (NYSE American) listed company? I PDQ non-convertible debentures ll PDQ preferred stock lll PDQ warrants

Exempt transation

Unsolicited customer orders are defined as an _________transaction" under the Act, whether the securities involved are exempt or non-exempt.

I, II, IV

Which of the following are defined as securities under the Uniform Securities Act? I Warehouse receipt II Collateralized Mortgage Obligation III Fixed Annuity Contract IV Pre-organization certificate Which ones

All of them

Which 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? I Current equity and debt capital of the issuer II Description of issuer's business, product lines and competitive environment III Use of proceeds of the offering IV Offering terms which ones

B

Which of the following is NOT defined as a security under the Uniform Securities Act? A. Bank note BEndowment policy CVariable annuity DWarrant

II,III,IV

Which of the following would be defined as a "sale" or "offer" under the Uniform Securities Act? I A stock dividend given to existing shareholders II A bonus of stock that is given for completing a securities purchase III Stock warrants given to purchasers of a debt offering IV Subscription rights given to existing shareholders for a different class of securities than originally purchased which ones

Non-issuer transaction

______~ transaction, since the issuer does not receive the proceeds of the sale.

Registration by Coordination

a method of registering securities in a State, this is used by a new company that is also registering the securities with the SEC.

Registration by Qualification

a method of registering securities in a State, this is used by new companies that have never previously registered securities with the State.

Registration by coordination

allows an issuer to use its SEC-registration documents under the Securities Act of 1933 as its registration documents in the State.

basic definition of a security

an investment in a common enterprise for profit, with management provided by a third party.

Registration by Filing

can be used by established companies that have been in continuous operation for the past 3 years, who already have registered securities with the Securities and Exchange Commission. A "secondary" offering by an issuer is defined as an issue from a company that already has registered securities outstanding.

vacated

f the Administrator has issued a "stop order" against an issuer that is selling (or intends to sell) securities in that State, the order will be ______if it can be proven that the sale is not illegal in the State

Administrator

f the issue is being registered by coordination, since there is a concurrent SEC registration, the burden of proof is on the ______to show that the order should not be vacated

is not; SEC

if a security is defined as a "federal covered security," then registration in the State____ required (only registration with the_____ is required).

Registration By qualification

in a State is the most difficult method and can be used for ANY securit

Sale

is a contract to sell a security, or an interest in a security, for value.

assembly security

is one which obligates to owner to make future payments into the investment as required.

Federal covered security

listed on the New York Stock Exchange, American Stock Exchange or NASDAQ, or is a senior security (preferred stock or bonds) of such an issuer listed on a national securities exchange that has substantially similar listing standards to those exchanges listed above issued by a registered investment company

A sale

offer of rights or warrants on an underlying security; or the sale or offer of a convertible security

Blue Sky laws

require the registration of broker-dealers, investment advisers, and their agents in each State (unless an exemption is available).

offer to sell

the unexecuted contract to sell a security for value - that is, the attempt to sell a security.

Administrator

this persons responsibility is to enforce the Act's anti-fraud provisions, protecting that State's residents from securities fraud.

35; prohibited; can Be paid

under Federal law, a private placement is a sale of securities to no more than ____"non-accredited" investors. advertising is______ ; and Commission __