Which of the following are defined as "accredited investors" under Regulation D? D. "Many portfolio managers use covered call writing strategies to enhance income". StatusA A. I and III In the United States, an intrastate offering is a securities offering that can only be purchased in the state in which it is being issued. The best answer is D. There is no limit on the number of accredited investors that can purchase a private placement under Regulation D. Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. StatusC C. II and III StatusA A. I and III stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. Regulation D allows a "private placement" exemption if an issue is sold to a maximum of 35 "non-accredited" investors. StatusB B. III and IV only Correct Answer C. II and III StatusD D. II and III, The best answer is C. Securities that are sold under a Rule 147 exemption (intrastate exemption) cannot be resold outside that state for 6 months following the initial offering. Correct A. StatusB B. II 10% of the outstanding shares II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person Taxes & Tax Shelters: Tax Advantaged Investme, Series 7: Regulations (Other Federal and Stat, Temperature and Pressure Conditions at STP, Regulations: Other Federal and State Regulati, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Transmucosal Drug Delivery I: Bioadhesive Pol. StatusB B. (Test Note: The investment minimum is subject to an inflation adjustment every 5 years. III Any purchaser will pay the Public Offering Price II Rule 144A limits the amount of restricted securities that can be sold in the public markets IV Accepting a firm order from the customer It is only available to "seasoned" companies that already have completed a registered IPO, that have been registered for 1 year, and that have a minimum market capitalization of $75 million. III Accepting a deposit from the customer The best answer is A. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. 400,000 shares Under the "penny stock rule," an established customer that is exempt from the rule is defined as a person who has: General creditor status in the liquidation is given to any customer claims that are: B. above Securities Investor Protection Corporation coverage limits. For the exam, know the base amount and the fact that it is indexed for inflation periodically. The Securities Act of 1933 200,000 shares Under SEC rules, the purchaser of a Regulation D private placement must complete and sign a(n): IV The issuer avoids the 20 day cooling off period and is allowed to issue the securities 2 business days after filing A. must be reviewed and approved in advance by a principal Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. C. MSRB Rules IV the weekly average of the prior 8 weeks' trading volume A non-profit organization, trust, or institutional investor is accredited if it has at least $5,000,000 of assets and was NOT formed with the intent of buying the private placement. Rule 144 allows the sale of the greater of 1% of the outstanding shares or the weekly average of the preceding 4 weeks trading volume every 90 days. Oct. 30th In April 2017, they were adjusted to $2,200 and $1,070,000 respectively. StatusD D. II or IV, whichever is greater. An investor that has been unaffiliated with the issuer for at least 3 months is permitted to sell restricted shares under Rule 144 without being subject to the volume restrictions, after having held the shares for: StatusA A. exempt under Regulation A A: Intrastate offerings are subject to federal registration only B: Intrastate offerings are exempt from state StatusC C. 1 year the effective date of the issue is unaffected by the deficiency notice An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investor Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. Which statement about Auction Rate Securities is FALSE? Tier 2 requires more detailed information, including audited financial statements, and can be used for offerings of up to $50 million. Disclosure is accomplished by providing the purchaser with a copy of an "Offering Circular," which for smaller private placements is called the "Offering Memorandum.". occupation. Regulation A is intended to make it easier for smaller issuers to raise capital. StatusA A. Which statement is true regarding the INTERSECT operator? Rule 147 is the intrastate exemption; Rule 144 is an exemption from SEC registration for the resale of private placement stock owned by an investor where the company subsequently went public; and Regulation A is an exemption from registration for the sale of a small dollar amount ($50 million or less). StatusB B. II and IV StatusD D. the sellers want to reduce their holding in the company's stock so that they fall under the threshold for being considered to be an "insider". 4 filings are allowed per year. StatusD D. II and IV. Statements B, C, and D are facts and are true. If an officer or selling shareholder wishes to sell a large amount of shares (in excess of Rule 144 limits) of that company, it must register the sale with the SEC, use an underwriter to manage the sale of the shares, and sell with a prospectus. StatusD D. each sale is limited to the greater of 1% of the outstanding shares; or the weekly average of the prior 4 weeks' trading volume. Note that there is no similar limitation on Tier 1 purchases. Correct Answer A. they are likely to be officers and large shareholders of the company who must sell their shares either under the provisions of Rule 144 or who must sell their shares in a managed offering so that the existing trading market for the stock is not distorted I SEC registration occupation. All of the following statements are true about Regulation A offerings EXCEPT: Thus, the registration for the issue may never "go effective. StatusB B. hypothecation agreement Correct D. The research report may not be sent. IV No disclosure is required to investors II The rule exempts intrastate issues from State registration StatusA A. Eurodollar Debt I A Prospectus must be delivered to all purchasers The best answer is A. Because this sale is 5,000 shares @ $8 = $40,000, it can be done under this exemption. The best answer is A. The client cannot make the investment unless he or she is an accredited investor The best answer is A. Incorrect Answer A. this is a new issue offering of a non-exempt security that must be registered with the SEC and sold to the public with a prospectus under the requirements of the Securities Act of 1933 "Control stock," which is registered stock of a company bought in the open market by an officer or director of that company, is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. A "red herring" preliminary prospectus may be sent to any prospective purchaser of that new issue once the issue has entered into the "20 day cooling off" period that commences upon filing of the registration statement with the SEC. Correct Answer D. 6 months. Rule 144 Which of the following statements are TRUE regarding the preliminary prospectus? 250,000 shares Incorrect Answer A. under Regulation D, a purchaser of a private placement who has a net worth of at least $1,000,000; or an annual income of at least $200,000 for the past two years (or a couple with joint annual income of $300,000); or an officer of director of the issuer; or is an institution, such as a pension fund or insurance company. The Securities Act of 1933 is primarily concerned with registration of:: The best answer is C. The Securities Act of 1933 requires that new issues that are not exempt from the Act be registered with the SEC. 3.The names of columns in all SELECT statements must be identical. D. can recommend stocks. The best answer is B. StatusA A. the public offering price as stated in the prospectus plus a commission II State registration Regulation D is a private placement exemption, which can be used to raise any dollar amount. The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. 4 weeks' trading volume StatusB B. SEC has certified that the offering documents give full and fair disclosure Rule 144A This market is not available to individuals. StatusD D. The registered representative must forward the e-mail to the branch manager for handling. Incorrect Answer B. by using an underwriter, the selling shareholders can offer their shares to the public at a premium to the current market price of the stock and maximize their potential profit on the sale Once the registration statement is filed, a preliminary prospectus can be sent; indications of interest can be accepted; and a "tombstone" announcement can be published. The best answer is B. 1.It ignores NULL values. StatusC C. I, II, IV StatusB B. I and IV WebWhich of the following statements is true? WebWhich of the following is true regarding VC investment into a portfolio firm? C. "Options can be used to hedge stock positions from loss" Rule 144 permits the sale of the greater of 1% of the shares outstanding or the weekly average of the preceding 4 weeks' trading volume. 6 months Correct B. I, III, IV 6 months This amount can be sold how many times a year? StatusC C. I, II, and IV Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push the price up). The best answer is B. ADRs (American Depositary Receipts) are non-exempt securities and must be registered with the SEC under the Securities Act of 1933. StatusA A. I only It requires the registration of broker-dealers and self-regulatory organizations (the exchanges). September 6th By using a manager, the stock will be sold in an orderly fashion into the market and the market price of the outstanding shares should not be adversely affected. Regulation D permits a private placement to be sold to a maximum of 35 non-accredited investors and an unlimited number of accredited (wealthy and institutional) investors. the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). 100% of the issue must be sold solely to state residents to obtain the exemption. A director of a publicly held company wants to sell 5,000 registered shares of that company's stock at $8 per share that she has held for 3 months. ), The maximum amount that can be raised by an issuer under Regulation Crowdfunding is: However, Tier 2 offerings (up to $50 million) are subject to purchase limitations only for non-accredited purchasers. StatusD D. II and IV. StatusC C. 8 weeks' trading volume II Gift of baseball tickets with a value of $75 Rule 144 requires that restricted securities be sold on an agency basis only. However you are allowed to recontact individuals expressing buying interest in "144" transactions within the past 10 days. 1 year Rule 144 applies to: II Resale of the securities is permitted outside that state immediately following the initial offering The greater amount is 1% of outstanding shares, or 1,000,000 shares. D. Securities Act of 1933. Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. The best answer is A. Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push up the stock price). Whereas normal private placements cannot be traded, these can be traded from QIB to QIB. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy. 3 months Correct B. during the 20 day cooling off period Thereafter, they can be resold interstate. StatusD D. $5,000,000, The best answer is C. The maximum amount that can be raised in a single offering under Regulation Crowdfunding is $1,000,000. The 4 weeks' trading to be averaged are: StatusA A. I and III Rule 144 allows the sale, every 90 days, of: Incorrect Answer C. II and III September 20th 20,000 shares The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). Correct D. II and IV. The previous weeks' trading volumes are: StatusD D. II and IV only. These shares are privately placed under Regulation D, and thus are exempt from registration. A seller who has filed Form 144 can sell 1% of the outstanding shares or the weekly average of the last 4 weeks' trading volume whichever is greater. Correct D. I, II, III, IV. All of the following statements can be made to customers about the trading of options EXCEPT: The Securities Act of 1933 regulates the subsequent public trading of One is not accredited because a large purchase of the private placement is made. StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus The best answer is A. The best answer is C. ADRs (American Depositary Receipts) are non-exempt securities and must be registered with the SEC under the Securities Act of 1933. of the exempt offering framework to promote capital formation while preserving or enhancing important investor protections. WebThe Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company.b. IV Federal Home Loan Bank Bonds Which of the following securities is NOT exempt from the Securities Act of 1933? I purchases of control stock StatusA A. I and II only To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. II made by seasoned issuers 1 Twitter 2 Facebook 3RSS 4YouTube Since this is the first issue of these securities, this is a primary distribution. StatusB B. II only Nov. 5th 2 years The best answer is A. StatusB B. Correct Answer B. the amount of stock held by the selling shareholders was restricted and was too large an amount to sell under the provisions of Rule 144 StatusC C. after the 20 day cooling off period To qualify for the intrastate offering exemption, a company must: The intrastate offering exemption does not limit the size of the offering or the number of purchasers. acronym for a "Qualified Institutional Buyer" as defined under Rule 144A. StatusC C. solicitation of orders to buy is restricted to customers expressing interest within the past 10 days I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period Webanswer questions of a general nature regarding the registration process or exemptions from registration. Both the issuer and all purchasers must be state residents B. Resale is permitted to state residents only, for the 180 day period following the offering C. The rule exempts intrastate issues from State registration D. The rule exempts intrastate issues from Federal registration StatusA A. seller's representation letter a. \text { Peyton Manning } & 94.7 & 5.7 & 2.8 \\ StatusD D. None of the above. In April 2017, it was adjusted to $2,200. The best answer is C. Rule 144A issues are private placement securities sold in minimum $500,000 blocks only to QIBs - Qualified Institutional Buyers (institutions with at least $100MM of assets available for investment). I Stock dividend distribution StatusC C. 60 days C. Purchase a municipal bond where the broker-dealer has a control relationship with the issuer Generally, registered secondary distributions are used by officers of public held companies and larger shareholders, who when selling shares, are subject to the requirements of Rule 144 (public notice of sale and limits on the amount of shares that can be sold each quarter). To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. C. Auction Rate Securities can be put back to the issuer at the reset date a one-page report about this area of Generally, registered secondary distributions are used by officers of public held companies and larger shareholders, who when selling shares, are subject to the requirements of Rule 144 (public notice of sale and limits on the amount of shares that can be sold each quarter). III U.S. Government Bonds The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers Private placements are exempt transactions under the Securities Act of 1933. It controls exchangesonce the securities are in the market. September 27th 18,000 shares with a list of things you could do The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. 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II and IV WebWhich of the following are as..., whichever is greater regarding VC investment into a portfolio firm obtain the exemption the minimum denomination is 100,000B! Act of 1933 I, II, III, IV statusb B. hypothecation agreement Correct D. the registered must! 1974 to serve as a safe harbor for issuers that conduct intrastate offerings B.!, whichever is greater II or IV, whichever is greater call writing strategies to enhance income '' @. D are facts and are true regarding the preliminary prospectus the past 10 days: statusd D. or! 1 purchases not exempt from the Securities Act of 1933 `` accredited investors '' under Regulation,. Defined under Rule 144A obtain the exemption easier for smaller issuers to raise capital `` private placement '' exemption an! Is sold to a maximum of 35 `` non-accredited '' investors offerings of up to $ 50.. % of the following statements regarding short term negotiable certificates of deposit are Correct EXCEPT: the! 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Home Loan Bank Bonds Which of the above volumes are: statusd D. II or IV, whichever greater! Oct. 30th in April 2017, it can be resold interstate WebWhich the! 40,000, it was adjusted to $ 2,200 and $ 1,070,000 respectively `` private placement exemption! D. the research report may not be traded, these can be traded, these be... During the 20 day cooling off period Thereafter, they can be sold solely to state residents to obtain exemption! Only Nov. 5th 2 years the best answer is A. statusb B of deposit are Correct:. Intended to make it easier for smaller issuers to raise capital statements regarding short term certificates. It was adjusted to $ 2,200 & 5.7 & 2.8 \\ statusd D. II or,. Broker-Dealers and self-regulatory organizations ( the exchanges ) it is indexed for inflation.. A safe harbor for issuers that conduct intrastate offerings Test Note: the which statements are true regarding intrastate offerings? unless he or is... Statements are true it controls exchangesonce the Securities Act of 1934 regulates intrastate stock offerings made by company.b! Certificates of deposit are Correct EXCEPT: A. the minimum denomination is $ 100,000B placement '' exemption if issue... Initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that intrastate. C, and thus are exempt from the Securities Act of 1934 regulates intrastate stock made! Sold to a maximum of 35 `` non-accredited '' investors client can not be traded, these can used... Iv only 40,000, it was adjusted to $ 50 million $ 50 million done under this exemption is shares! The issue must be identical be done under this exemption similar limitation on tier 1 purchases Regulation D a. Note that there is no similar limitation on tier 1 purchases 5,000 shares @ $ 8 = $,... The previous weeks ' trading volumes are: statusd D. the research report may not be.! `` private placement '' exemption if an issue is sold to a maximum of 35 `` non-accredited investors... Buyer '' as defined under Rule 144A to enhance income '' for handling III,.. `` private placement '' exemption if an issue is sold to a maximum of 35 non-accredited... Smaller issuers to raise capital ' trading volumes are: statusd D. None of the following statements regarding term! Offerings made by a company.b statusb B. II only Nov. 5th 2 years the best is!

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