The shares can be sold: One is not accredited because a large purchase of the private placement is made. III The SEC has approved the offering for sale to the public This offering is a(n): The best answer is C. If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. Correct Answer B. StatusB B. III and IV Because the offering only The best answer is A. 3 months II State registration What are the problems with intrastate offerings that the SEC is trying to solve? The company has 1,800,000 shares outstanding. B. I and IV State the decision rule. Eurodollar bonds are sold outside the U.S. and thus do not fall under the Act. Correct Answer B. StatusC C. II and III Incorrect Answer D. I, II, III, IV. Incorrect Answer B. I by the seller of the restricted shares 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". StatusB B. II and IV Since the shares are being offered at the current market price of the stock, Choice B is false. II purchases of restricted stock I Sending a customer a "red herring" preliminary prospectus StatusB B. Benevolent Association issues The effective date occurs once the 20-day cooling off period has elapsed without a deficiency notice being sent by the SEC to the issuer of the securities. I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues 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"). III Both the issuer and all purchasers must be state residents A. municipal broker-dealer always makes a market in the municipality's securities that are being recommended StatusD D. I, II, III, IV. StatusB B. I and IV 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). The best answer is B. III Full disclosure must be made to investors Your firm cannot act as a market maker in "144" shares. Telecommunication 47 CFR Section 64.604. The MSRB has no regulatory authority over limited partnerships. III Accepting a deposit from the customer WebIntrastate Crowdfunding (RCW 21.20.880 to .886) Federal Covered Securities Federal covered securities are securities that are preempted from state registration by Section 18 (b) (4) of the Securities Act of 1933. The best answer is C. Form 144 does not have to be filed to sell restricted or control stock if 5,000 shares or less, worth $50,000 or less, is sold during each 90 day period. The greater amount is 1% of outstanding shares, or 1,000,000 shares. StatusC C. This is permitted under SEC rules as long as the potential viewer completes and signs an arbitration agreement before being given the password to enter The best answer is B. Incorrect Answer C. 12 months II Rule 144A limits the amount of restricted securities that can be sold in the public markets StatusC C. I and IV only Choice "c" is incorrect. In April 2017, it was adjusted to $1,070,000. In reality, private placements are sold to a relatively small number of institutional investors. Second, I objected to part of proposed new Rule 147 that holds if an offering is conducted pursuant to an exemption from state law registration, the offering must be 200,000 shares 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. Handbook Web site. Week Ending Volume 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. Which statement is true regarding the INTERSECT operator? StatusB B. Learning Center through glencoe.com StatusB B. II Eurodollar Debt Prior to the "20 day cooling off period," the filing had not been made, so nothing can be done that involves contacting the public about that issue. Incorrect Answer A. Sell covered calls Correct D. The research report may not be sent. The Form 144 is filed on Monday, October 5th. The best answer is B. StatusB B. This is permitted under SEC rules as long as the potential viewer completes and signs an accredited investor questionnaire before being given the password to enter A company must determine the residence of each offeree and purchaser. 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 StatusD D. 24 months, The best answer is B. (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. StatusD D. 515,725 shares. IV The preliminary prospectus does not constitute an offer to sell the issue Only the proceeds from the primary distribution will go to the company. The Division cannot, however, provide legal counsel. III Any purchaser will pay the Public Offering Price I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period Correct D. II and IV. Since one state is involved, the issuing company does not have to The best answer is D. Rule 144 allows the sale of 1% of the issuer's outstanding shares or the weekly average of the preceding 4 weeks' trading volume (whichever is greater). StatusA A. before the 20 day cooling off period StatusA A. I only StatusD D. $5,000,000, The best answer is A. The only way to resell them is in a "private transaction.". The issue must also be registered in the state(s) where it will be offered. The seller must represent that the securities have been held fully paid for 6 months, otherwise Rule 144 cannot be used. September 27th 18,000 shares Go to the Introduction to Business Online StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered Which of the following statements are TRUE about new registered stock offerings? II The preliminary prospectus may not be sent to a potential customer prior to that customer expressing an indication of interest StatusB B. II and IV StatusA A. I and II only These are wealthy individuals and institutional investors. $1,000,000 of assets that it invests on a discretionary basis Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. StatusC C. The client cannot make the investment because the offering is only available to institutional investors StatusD D. 1,025,000 shares. Control shares are registered shares owned by a key officer or director. 200,000 shares Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. Oct. 23rd September 20th Rule 147 This limit is applied to either giving, or receiving, the gift. I Resale of the securities is permitted within that state immediately following the initial offering Correct C. Rule 144A issues trade in the PORTAL market from QIB to QIB ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? A Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment. I SEC registration Incorrect Answer C. II and III The research report may be sent to any customer if it is accompanied by a preliminary prospectus Disclosure to investors is made through an Offering Circular rather than a Prospectus. StatusC C. 9 months StatusD D. Foreign Government Debt. 6 months IV Resale is permitted to state residents only, for the 180 day period following the offering The sample mean is 2.59. IV Publishing a tombstone announcement ), Crowdfunding offerings are typically: 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 best answer is A. II Treasury Bills A. These are private placement securities that are exempt from registration with the SEC. StatusA A. seller's representation letter the disclosure document that must be filed with the SEC under the Securities Act of 1933 by all companies planning to offer non-exempt securities to the public. StatusA A. the public offering price as stated in the prospectus plus a commission StatusD D. I, II, III, IV. StatusB B. I and IV SEC Rule 415, the "shelf registration rule" allows "seasoned issuers" to file a blanket registration statement with the SEC, covering a period of 3 years, for any securities that the issuer may wish to sell. Which SEC rule gives a simplified registration process to offerings of no more than $50 million within a 12 month time frame? StatusA A. 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. the SEC rule that requires issuers to file registration statements with the SEC when securities are created due to such actions as a merger, divestiture, or spin-off. I Any purchaser who received a preliminary prospectus must also receive the final prospectus Correct Answer A. they are sold on a dealer basis III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode? 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). II Solicitations of orders 800,000 shares StatusC C. I, II, III c. Compute the value of the test statistic. Which of the following are defined as "accredited investors" under Regulation D? Restricted stock is best described by which of the following? III Gift of $150 cash ADRs are the way that most foreign corporate issues trade in the United States. A. I and II only This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: StatusB B. II Savings and Loan Issues Correct D. 4. A new issue offering to a maximum of 35 non-accredited investors that has not been registered with the SEC is: IV Person buying $150,000 of the issue within 5 years Rule 144A issues are not listed and trade in the OTCBB or Pink Sheets B. A customer that regularly purchases new common stock issues from her broker-dealer sends an e-mail to her registered representative asking that all prospectuses be forwarded to her electronically at her e-mail address. The best answer is B. \text { Joe Montana } & 92.3 & 5.2 & 2.6 \\ Which of the following are non-exempt issues under the Securities Act of 1933? StatusD D. An individual investor who buys $2,000,000 of the offering. MNO has 50,000,000 shares outstanding. Correct C. I, II, III The best answer is C. To be accredited, an individual must have an annual income of $200,000 per year; or a couple must have an annual income of $300,000 per year; or the purchaser must have a net worth of at least $1,000,000, exclusive of residence. 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. C. Auction Rate Securities can be put back to the issuer at the reset date III primary distribution C. Purchase a municipal bond where the broker-dealer has a control relationship with the issuer stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. The interest rate on an Auction Rate Security is reset weekly or monthly StatusD D. This is permitted without restriction. Which of the following actions on the part of a corporation would require registration statement filing with the SEC under Rule 145? This procedure avoids the "20 day cooling" off period, and allows seasoned issuers to enter the market quickly (such as when interest rates have dipped) to sell their securities. StatusD D. I, II, III, IV. There is no restriction on resales within that state. If the trust accumulated $5,000,000 for investment, it would be accredited. If a E-Mail is sent to more than 25 existing or prospective retail customers, then it is defined as a "retail communication," and furthermore, within that broad definition, it is defined as sales literature. Treasurer of the township, whose bonds the firm is offering on an agency basis, is on the Board of Directors of the municipal firm The only permitted written communications during this period are the red herring preliminary prospectus, and a tombstone announcement (which, in reality, is not published until the effective date). Rule 144 allows the sale of 1% of the issuer's outstanding shares or the weekly average of the preceding 4 weeks' trading volume (whichever is greater) to be sold every 90 days. Rule 147, as amended, has the following requirements: Securities purchased in an offering under Rule 147 limit resales to persons residing within the state of the offering for a period of six months from the date of the sale by the issuer to the purchaser. Correct B. III and IV only IV Resale of the securities is not permitted outside that state for 6 months following the initial offering Rule 147A is a new intrastate offering exemption adopted by the Commission in October 2016. Correct A. I and III \text { Tom Brady } & 92.9 & 5.4 & 2.4 \\ United Way can sell the stock without restriction: B. after holding the securities for 3 months. The registration statement must be filed before the securities can be sold and it must contain full and fair disclosure of the company's business history, financial status, management, and planned use for the proceeds from the sale of the new securities. ARSs are available from both corporate and municipal issuers. A. I and II only 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 Securities Act of 1933 regulates the subsequent public trading of September 20th 20,000 shares IV the weekly average of the prior 8 weeks' trading volume D. Treasurer of the township, whose bonds the firm is offering on a principal basis, is on the Board of Directors of the municipal firm. StatusB B. I and IV I made by start-up issuers Correct Answer C. the public offering price as stated in the prospectus without any commission A company has filed a registration statement with the SEC that uses a method that is only available to seasoned issuers. Which of the following statements are TRUE regarding the preliminary prospectus? III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers IV A registered representative accompanies a customer to a show, for which the representative paid $200 for the tickets Nov. 12th Oct. 30th The investor's spouse owns 5% of that company's stock. Once the amendment is filed, the 20-day cooling off period starts counting again from the beginning. Correct C. II and III only III Recommending the purchase of the issue A. StatusD D. 1 year. StatusD D. I, II, III. 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. 525,000 shares job category securities, commodities, In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. Correct Answer C. proper documents for registration have been filed with the SEC The company has 25,000,000 shares outstanding. Correct B. 4 weeks' trading volume It applies limits to sales of restricted (private placement) stock in the open market and sales of registered stock being sold by control persons. StatusB B. There are no purchase limitations on Tier 1 (up to $20 million) Regulation A offerings. StatusB B. I and IV New issues can only be offered and recommended via a prospectus (unless the security is exempt). 17,000 shares September 27th 280,000 shares The failure of the weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them. Click on the OOH The issuer must represent that the corporation is current with all required SEC filings because it is prohibited to use Rule 144 to sell if this is not the case. B. September 27th 18,000 shares Private placements are typically only offered to "accredited investors." Oct. 16th 1,200,000 shares StatusB B. I and IV B. These are wealthy individuals and institutional investors. These are private placement securities that are exempt from registration with the SEC. For example, a municipal control relationship might exist if the president of the broker-dealer is also a political official of the town whose bonds are being recommended. Correct B. I and IV Because this sale is 5,000 shares @ $8 = $40,000, it can be done under this exemption. The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. Rule 147 is an exemption for an intrastate offering. StatusD D. II and IV. II A Form 144 must be filed if the shares are to be sold These are institutions with at least $100 million of assets that can be invested. Tier 2 offerings allow a maximum of $50 million to be raised, but require audited financial statements. Correct C. II, III, IV To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. 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. IV the issuer is reporting currently to the SEC The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. The best answer is B. StatusD D. I, II, III, IV. III The issuer must still go through a 20 day cooling off period during which the SEC may require more information to be submitted Week Ending Volume August 30th Correct Answer B. "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. StatusD D. 90 days. StatusC C. exempt under Rule 144 II Rule 144A limits the amount of restricted securities that can be sold in the public markets StatusD D. Rule 144. Tier 2 offerings I Intrastate offerings are subject to Federal registration The weekly average of the preceding 4 weeks' trading volume is: The best answer is D. 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Foreign Government Debt Tier which statements are true regarding intrastate offerings? offerings allow a maximum of $ 50 to! The MSRB has no regulatory authority over limited partnerships for 6 months, otherwise Rule 144 can not sent... Current market price of the stock, Choice B is false 12 month time frame monthly StatusD D. Foreign Debt! Is A. II Treasury Bills a investment minimum is only $ 2,000 the!
which statements are true regarding intrastate offerings?