In reality, private placements are sold to a relatively small number of institutional investors. It simply notifies the SEC that the issue is being offered in compliance with the exemption. Rule 147A is substantially identical to Rule 147 except that Rule 147A: STAY CONNECTED StatusB B. after holding the securities for 90 days StatusC C. II and III 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). III The preliminary prospectus constitutes an offer to sell the issue Included are investment companies, insurance companies, banks, trust funds, employee benefit plans, and employee retirement funds. 1% of 50,000,000 shares = 500,000 shares. Correct Answer C. the public offering price as stated in the prospectus without any commission Which offering of securities under Regulation A is subject to purchase limitations? The amendments also seek to close gaps and reduce complexities in the exempt offering framework that may impede access to investment opportunities for investors and access to capital for businesses and StatusA A. the public offering price as stated in the prospectus plus a commission The rule allows the greater of 1% of the outstanding shares or the weekly trading average of the last 4 weeks to be sold under the filing. IV sales of restricted stock StatusC C. 60 days The best answer is D. Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. Correct D. None of the above. Listed stocks, and stock options are non-exempt issues that must be registered with the SEC. Under Rule 144, no filing is required if the sale amount every 90 days does not exceed: The issue here is that there can be an inherent conflict of interest when such a relationship exists. StatusC C. II, III, IV 200,000 shares Rule 144A issues are not listed and trade in the OTCBB or Pink Sheets The rule is split into Tier 1 and Tier 2. I Gift of $75 in cash Industrial Company issues StatusD D. 90 days. All of the following statements are true about Regulation A offerings EXCEPT: IV Intrastate offerings are exempt from State registration Correct Answer A. I and III 73,000 shares / 4 = 18,250 shares I Sale of the issue If a control relationship exists between a brokerage firm and the municipal security being recommended, this security cannot be purchased in discretionary accounts unless the specific authorization of the customer is obtained first. The best answer is D. During the 20-day cooling off period for a new issue in registration, the worry of the SEC is that the underwriters will "hype" the issue to increase investor interest and hence increase the final Public Offering Price. StatusA A. Rule 147 is considered a safe harbor under Section 3(a)(11), providing objective standards that a company can rely on to meet the requirements of that exemption. II Variable annuity contracts The Form 144 is filed on Monday, September 28th. Correct Answer B. The Securities Act of 1933 3 years Correct B. I, II, III The intent is to make it simpler for start-up companies to raise capital. The best answer is D. 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. e. What is the pvalue? Correct B. A. a. 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. Intrastate offerings are exempt from the Securities Act. Which of the following is defined as an "accredited investor" under Regulation D? There are 2 "tiers" to the rule. 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. StatusD D. I, II, III. Which of the following statements are TRUE regarding Rule 144A? Specific customer approval is needed for the registered representative to effect which of the following transactions in the customer's account? 2 years StatusD D. II or IV, whichever is greater. The issue must also be registered in the state(s) where it will be offered. StatusB B. I and IV The greater amount is 1% of outstanding shares, or 250,000 shares. The proceeds from the secondary distribution go to the selling shareholders. 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). (see Regulation D), Which of the following are accredited investors? II Advertisement of the issue III the weekly average of the prior 4 weeks' trading volume ), The selling shareholders are required to offer their shares via a prospectus because: Correct B. II only Your firm cannot act as a market maker in "144" shares. Incorrect Answer C. II and III The Form must be filed by the seller at, or prior to, with the placement of the sell order. are not allowed. WebKelley Drye & Warren LLP has provided carefully tailored legal counsel to its clients for more than 180 years. These are wealthy individuals and institutional investors. Incorrect Answer B. StatusB B. I and IV (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. StatusA A. before the 20 day cooling off period StatusD D. broker's representation letter. Which of the following are defined as "accredited investors" under Regulation D? The best answer is B. Commercial Paper, which is issued by corporations, is not eligible for Fed trading. Rule 147 exempts "intrastate" issues from registration with the SEC. If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. A spouse is considered an affiliated person. IV Spin off of a subsidiary as a publicly held company Tier 1 offerings 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"). A. Correct Answer A. I or III, whichever is greater II A registered representative pays for a $300 meal with a customer IV The SEC has established the final offering price Regulation Crowdfunding is intended as a means of raising capital: Correct Answer A. They are an exempt security under the Securities Act of 1933 and can be sold without a prospectus. WebWhich statements are TRUE regarding intrastate offerings? StatusC C. II and III As long as the firm has appropriate compliance procedures in place, correspondence is subject to "post-use review and approval." It gives an "E-Z" registration method for offerings of up to $50 million within a 12 month period. A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. StatusA A. I and III a notice from the Securities and Exchange Commission to an issuer who has filed a registration statement under the Securities Act of 1933, that the disclosure is not adequate. 6 months An "accredited investor questionnaire" is required when which type of offering is made to investors? Governments settle "regular way" in 1 business day. StatusD D. Regulation D. The best answer is C. Week Ending Volume StatusC C. Both Tier 1 and Tier 2 offerings If an issuer complies with all of the provisions of Rule 147, then the issuer will be deemed to have complied with Section 3 (a) (11). 950,000 shares / 4 weeks = 237,500 shares Rule 144 allows the sale, every 90 days, of: StatusD D. I, II, III, IV. StatusB B. SEC has certified that the offering documents give full and fair disclosure Correct D. II and IV. The best answer is A. 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 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). \text { Daunte Culpepper } & 89.9 & 4.9 & 3.2 I Individual earning $200,000 per year Incorrect Answer A. A company has filed a registration statement with the SEC that uses a method that is only available to seasoned issuers. Rule 144 does not apply to stock purchases - it only applies to stock sales. StatusD D. 24 months, The best answer is A. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following completion of the initial offering. IV Any purchaser will pay the Public Offering Price plus a commission or mark-up A Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment. Common carriers, small business investment companies, and benevolent associations are all exempt. IV Municipal Debt StatusD D. II and IV. C. MSRB Rules To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. StatusB B. III and IV only The registered representative must inform the customer that all prospectuses must be sent in hard-copy form to the customer's physical mailing address Please note that a registration statement is not required to be filed if a corporation splits its stock or distributes a stock dividend, since such a distribution affects only the par value of the outstanding shares - it does not create a new class of security. II Rule 144A limits the amount of restricted securities that can be sold in the public markets (b) Describe its shape (skewed left, symmetric, skewed right). Incorrect Answer B. Intrastate offerings are exempt from: The underwriters use the indications collected as one of the determinants for pricing the issue (this happens at the very end of the cooling off period). IV No disclosure is required to investors If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. StatusC C. II and III B. III and IV only Rather than having to file a registration statement and complete a 20 day cooling off period for each new securities offering, the issuer files a blanket registration statement with the SEC that goes on the SEC's "shelf" for 3 years. The best answer is B. There is no representation required on the part of the buyer - when the restricted stock is sold through the rule, the buyer receives "clean" unrestricted shares from the transfer agent. The shares can be sold: 1% of 1,800,000 shares = 18,000 shares. The 1934 Act does not apply to initial offerings. I The preliminary prospectus may be sent to a potential customer prior to that customer expressing an indication of interest However, the issue is still subject to state (blue-sky) 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. This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. D. II and IV only. WebThe Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company.b. StatusA A. I and II only StatusA A. All of the following statements can be made to customers about the trading of options EXCEPT: I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues StatusD D. An unlimited number. It applies limits to sales of restricted (private placement) stock in the open market and sales of registered stock being sold by control persons. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following first sale. 2 years I 1% of the outstanding shares 4.The number of columns and data types must be identical for all SELECT statements in the query. This registration statement is good for: 10 Rule 144A issues are NMS securities that are listed and trade on the NYSE, AMEX and NASDAQ III Sending a preliminary prospectus It could do this by making purchases of that issue in its discretionary accounts. "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 start-up company looking to raise a small amount of "seed" capital would most likely use: The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. Webwhich statement is true regarding intrastate offerings rule 147 offering rule 147a rule 147 requirements (1) NGICE Bonds Secured by a Letter of Credit .to the exemption for StatusB B. III and IV only All of the following statements about e-mail sent by a registered representative to 50 retail clients are true EXCEPT the communication: Regulation A is intended to make it easier for smaller issuers to raise capital. A. I and II only StatusC C. The client cannot make the investment because the offering is only available to institutional investors All of the following statements are true about the Securities Act of 1933 the 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. Private placements are typically only offered to "accredited investors." II Savings and Loan Issues StatusB B. 500,000 shares Which of the following are exempt securities under Securities Act of 1933? 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 Common carrier issues such as railway issues are exempt under the Securities Act of 1933 because they were regulated by the Interstate Commerce Commission (I.C.C.) StatusC C. 50 September 20th 20,000 shares State the decision rule. ADRs are the way that most foreign corporate issues trade in the United States. Nov 14 IV Soliciting orders to buy the issue StatusB B. II and III only Correct C. II, III, IV B. can recommend a new issue The 6-month holding period is required for restricted stock, but not for control stock. October 4th 16,000 shares I The SEC has certified that the offering documents give full and fair disclosure The offering price is $30 per IV secondary distribution Excluding the percentage of the outstanding shares test, the maximum permitted sale under Rule 144 is the weekly average of the last: The best answer is B. If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. Resale is restricted to state residents for 6 months following the offering; thereafter, the issue can be sold interstate. Correct A. I and III Oct. 30th The transfer agent is authorized by the SEC to transfer the shares without a copy of the Form 144. StatusA A. I and III 4 filings are allowed per year. An officer of a company has acquired shares of that issuer in the open market. An investor wishes to sell restricted stock under the provisions of Rule 144. Thereafter, they can be resold interstate. Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. As of October 30, 2015, 29 states and the District of Columbia have adopted rules for intrastate securities offerings that fit into the general category of securities crowdfunding that is, the offer of securities over the Internet to a large number of investors who invest relatively small amounts. III Any purchaser will pay the Public Offering Price The best answer is B. Explanation: In the situation being described the statement that would be true is that the customer is prohibited from buying these securities. Nov 7 StatusA A. A. municipal broker-dealer always makes a market in the municipality's securities that are being recommended ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? I purchases of control stock PlayerSteveYoungPeytonManningKurtWarnerTomBradyJoeMontanaCarsonPalmerDaunteCulpepperRating96.894.793.292.992.390.189.9TD%5.65.75.15.45.25.14.9Inter%2.62.83.42.42.63.13.2. Auction Rate Securities are long-term instruments StatusA A. I and III StatusA A. I and II only 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. 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. The greater amount, 18,250 shares, can be sold during the next 90 days. Oct. 16th 1,200,000 shares 220,000 shares StatusD D. I, II, III, IV. III primary distribution Correct D. II and III only. The best answer is B. These are exempt securities under the Securities Act of 1933, since they were already regulated when the Securities Acts were written. The best answer is B. Rule 144 StatusD D. II and IV only. The best answer is A. StatusD D. None of the above. StatusA A. II The issuer must file an amendment with the SEC to cure the deficiency III U.S. Government Bonds The Federal Reserve trading desk can trade securities issued by the U.S. Government, Government Agencies, and prime Banker's Acceptances. Scores on an accounting exam ranged from 42 to 96 , with quartiles Q1=61,Q2=77Q_1=61, Q_2=77Q1=61,Q2=77, and Q3=85Q_3=85Q3=85. Under the Securities Act of 1933, new issues are not marginable until how many days have elapsed from the effective date? Legally, these are not considered to be offers of the security. This client cannot make the investment because the dollar amount to be invested is too small D. Purchase a municipal bond where the broker-dealer is a market maker in the security. Correct Answer A. 500,000 shares III Gift of $150 cash I Disclosure in the registration documents is not complete ", Which statements are TRUE regarding intrastate offerings under Rule 147? Which statements are TRUE regarding intrastate offerings under Rule 147? StatusD D. after holding the securities for an additional 1 year. trading occurs in the secondary marketD. The Division cannot, however, provide legal counsel. Rule 147 Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. The best answer is C. Investment companies, such as mutual funds, are non-exempt; therefore their securities must be registered and sold under a prospectus. The research report may be sent to any customer expressing an "indication of interest" What does that mean for September 13th occupation. StatusC C. 8 weeks' trading volume I registered distribution StatusC C. issuer's representation letter StatusD D. I, II, III, IV. Rule 144A StatusD D. An individual investor who buys $2,000,000 of the offering. StatusB B. II only 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. Second, the Act expands Michigans intrastate offering rule (MUSA 202 (1) (n)) to allow offers and sales to 50 Michigan residents (up from 25 Michigan residents under the old law). 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. and other investments. 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