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198 Cards in this Set
- Front
- Back
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State security laws are known as "_____"
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blue sky laws
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regarding the 63....
an "Administrator" is... |
individual responsible for administering securities laws in that state
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other titles for "Administrator"
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Securities Commissioner
Secretary of State (performs "Admin" duties) |
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NASAA
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North American Securities Administrators Association
updates the model law (USA) and the series 63 content |
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the NASAA issues ________, and statements of ________.
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model rules
policy |
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BAII
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the NASAA covers the activities of:
Broker/dealers Agents Investment advisers Investment adviser representatives |
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members of NASAA include...
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Administrators of states and territories
Equivalent officials from Canada/Mexico |
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what is NSMIA...
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the National Securities Markets Improvement Act
passed to reduce duplication of state/federal securities regulation |
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according to the NSMIA, investment advisers generally must register with the SEC when managing __________?
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$100 million or more
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NSMIA prohibits enforcing broker dealer requirements regarding ______, _____, and ___________ that are _____restrictive than federal requirements
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capital
bonding record retention more |
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Notice Filing
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process in which info filed with SEC is also filed/shared with the "Administrator"
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What federal securities law governs investment advisers registered with the SEC
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The Investment Advisers Act of 1940
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The USA regulates the sale of securities and activities of certain securities professionals by...
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carrying out antifraud mandates
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What is NOT a "security"
*hint* FA, F/ULI, EP, C/FC, I, K |
Fixed Annuity
Fixed/Universal Life Insurance Endowment Policy Commodity/Futures Contracts IRA Keogh Plan *note* Keogh participations ARE securities. |
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what is a Ponzi scheme?
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a pyramid scheme in which the returns of investors come from capital contributed by subsequent investors
multilevel distributorship arrangements and marketing schemes are usually variations of a Ponzi scheme. |
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What are the four elements in the Howey Test?
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1. an investment of money
2. a common enterprise 3. an expectation of profits 4. results solely from the efforts of others |
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Why is the Howey Test used?
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For a state/federal authorities to determine whether or not a security is an "Investment Contract"
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an "Issuer" is....
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any person who issues or proposes to issue any security
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in regards to the 63...
a "person" is any legal entity which includes individuals and ........... *hint* C,P,J,T,U,G |
Corporations
Partnerships or associations Joint stock company Trust where beneficiary interests are evidenced by securities Unincorporated organizations Government or governmental body |
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Nonissuer Transactions
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Issuer does not receive proceeds of transactions
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A broker-dealer is....
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Any person effecting securities transactions for its own account or the accounts of others
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Aside from Agents, Issuers, Banks, Savings Institutions, and Trust companies, what other 2 types of people are not considered Broker-Dealers
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1. A person that has no place of business in the state AND only transacts business with issuers, other broker-dealers, financial institutions, or institutional buyers
2. A person that has no place of business in the state AND is licensed where the person maintains its place of business and sells only to existing clients who are not residents of that state. |
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Regarding banks, what is included as a broker-dealer?
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1. Bank holding companies
2. Bank subsidiaries |
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Agent
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represents a broker-dealer or issuer in effecting securities transactions
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When is an individual not considered an agent
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when they provide clerical functions, if they effect transactions of EXEMPT securitities or involved in exempt transactions
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Exempt transactions include...
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transactions between issuer and underwriter
transactions with a trust or savings institution private placements sales to qualified purchasers transaction for partner/director/employee of issuer where no $$ is received directly or indirectly |
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For a Canadian broker to register in a state under limited capacity the firm must...
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register properly in canada
be a member of a canadian SRO or stock exchange NOT have an office in the state |
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What 3 documents must a canadian broker-dealer file to register in that state
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1. consent to service of process
2. copy of registration document, required to be filed with Canadian regulators 3. proof of good standing in the jurisdiction which registered in canada |
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What are the conditions to be met for a Canadian agent or broker-dealer to do business in the states
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1. must be an existing client in the state temporarily
2. must be a bona fide, preexisting relationship with client 3. agents may NOT solicit new clients or contact clients who have moved to the states permanantely |
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Did NAFTA extend limited registration status available to Canadians to Mexican broker-dealers and agents
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No, NAFTA eliminated barriers to free trade and investments between the US, Canada, and Mexico
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Investment adviser
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person who for $$, advises others as to the value of securities or the purchasing or selling securities, or issues securities reports.
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ABC Test to define an investment adviser:
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1. providing ADVICE about securities
2. providing services as a BUSINESS 3. receiving COMPENSATION for services |
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BST
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3 entities not considered an IA
Banks Savings institutions Trust companies |
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LATE
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Professionals whose advice is incidental to their profession and not considered an IA
Lawyers Accountants Teachers Engineers |
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When is a broker dealer not considered an IA
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When their advice is a part of NORMAL business and they DO NOT receive special compensation for advice
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2 types of adviser NOT considered an IA
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Federal-covered advisers
Investment adviser representatives (IAR) |
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RMDSS
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An individual associated with an Investment Adviser is considered an Investment Adviser Representative (IAR) if they.....
Recommend securities Manage accounts/clients Determine what advice is given Solicit investment advisory services Supervise employees |
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A _____ receives a ______ or a ________ of business for referring _______ to an investment adviser.
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solicitor
fee percentage clients |
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true or false:
A solicitor is not directly supervised by the adviser.... |
TRUE
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Under the USA, it is unlawful for a person, to directly or indirectly ....
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employ any device to defraud
make untrue statements, omit material info, mislead engage in fraudulent acts/business |
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The USA specifies the Administrator's power to _______ potential violations of_______________
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investigate
blue-sky laws |
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Define an "Administrator"
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The official or agency administering the securities laws of a state.
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Define what is considered to be an "Advertisement"
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Any material designed for use by newspapers, magazines, radio television, telephone recording or any other public medium to solicit business.
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What is the title of a person who is trying to solicit or sell a security?
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An agent is an individual who represents a broker/dealer or an issuer when selling or trying to sell securities to the investing public.
Individuals are considered agents whether they actually receives or solicits orders. |
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What is another name for an "Agent"?
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Agents are also known as "Registered Representatives".
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An individual representing a broker/dealer or an issuer is known as an _____ .
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Agent
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Define the term "Agent"
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The term "agent" is defined in the Uniform Securities Act so that it be determined legally who must register in the state as an agent.
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If a person is a salaried (no commissions) individual OR s/he represents issuers in the sale of any securities that are exempt from state registration, are they considered an agent?
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NO. A salaried (no commissions) individual is NOT considered an agent if s/he represents issuers in the sale of any securities that are exempt from state registration under the Uniform Securities Act.
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If you are not considered an agent, do you have to register?
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The registration process is not necessary, if a person does not fall into the classification of an "Agent".
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Is an individual considered an agent if s/he represents an issuer in an exempt transaction?
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An individual is not considered an agent if s/he represents an issuer in an exempt transaction such as a private placement of normally non-exempt securities.
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If a partner, officer or director of a brokerage firm limits their activity to managerial functions, must they register with the state as an agent?
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No. An individual is NOT considered an agent merely because s/he is a partner, an officer, or a director of a brokerage firm. IF the partner, officer or director of a brokerage firm limits their activities to managerial functions and does not attempt to affect purchases or sales, then that person is not defined as an agent.
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If a partner, officer or director of a brokerage firm limits their activity to managerial functions, are they considered an agent?
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An individual is NOT considered an agent merely because s/he is a partner, an officer, or a director of a brokerage firm. IF the partner, officer or director of a brokerage firm limits their activities to managerial functions and does not attempt to affect purchases or sales, then that person is not defined as an agent.
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Does the director of a brokerage firm who solicits sales need to register under the Uniform Securities Act?
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Yes because they are selling securities.
An individual is NOT considered an agent merely because s/he is a partner, an officer, or a director of a brokerage firm. IF the partner, officer or director of a brokerage firm limits their activities to managerial functions and does not attempt to affect purchases or sales, then that person is not defined as an agent. |
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Is an individual considered an agent if s/he sale of a private placement of normally non-exempt security?
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An individual is not considered an agent if s/he represents an issuer in an exempt transaction such as a private placement of normally non-exempt securities.
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Anti-Fraud Rules
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Although exempt securities and securities sold in exempt transactions are exempt from the registration and advertising filing requirements of the Uniform Securities Act, no security or person is exempt from the Anti-Fraud rules.
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Who is considered to be an Associated Person?
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Any employee, manager, director, officer or partner of a member broker/dealer or another entity (issuer, bank, etc.) or any person controlling, controlled by or in common control with that member is considered an associated person of that member.
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Define the Blue Sky Laws
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State regulations governing the securities industry.
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NOT classified as broker dealers
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1. Agents (Registered Representatives)
2. Issuers 3. Banks, savings institutions and trust companies 4. Persons who have NO PLACE OF BUSINESS IN THE STATE AND who: a) Effect securities transactions in the EXCLUSIVELY through the issuers of the securities, other broker/dealers, or financial institutions (banks, savings institutions, trust companies, insurance companies and investment companies) OR b) Are licensed in their home state and the only business they do in this state is with an existing customer who is only temporarily in the state. |
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Define Broker - Dealer (B/D)
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A B/D is defined in the USA to determine who must register
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What is the purpose of the "Consent to service of process" ?
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It creates the Jurisdiction for the state over any agent, broker/dealer or adviser registered in that state.
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When is the "Consent to service of process" form completed?
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It is part of the registration process.
When the agent, broker/dealer or adviser registers in that state. |
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If an agent is being sued and are not being able to be located how is the subpoena handled?
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Clients seeking to sue an agent, B/D or adviser need not serve the subpoena directly to the defendant. It need only be served to the Administrator.
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If a person disappears and can not be located, can they still be sued?
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The subpoena (or Service of Process) need only be served on the Administrator, who now has jurisdiction.
(Remember: They can be served but they aren't the courts.) This is helpful when the person being sued can not be located or has moved. |
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What is another name for a "Subpoena"?
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Subpoena is another name for "Service of Process"
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Consent to Service of Process is another way of saying...
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Consent to serve a subpoena
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What does being a broker - dealer mean?
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A B/D means any person engaged in the business of effecting transactions in securities for the other account of others or for his own account.
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A ________ means any person engaged in the business of effecting transactions in securities for the other account of others or for his own account.
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Broker Dealer
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A _______ _______ from the registration requirements of the Uniform Securities Act.
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Securities exempt
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An ______ _______is exempt from the registration requirements.
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Exempt Security
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An ________ _______ from registration and advertisement requirements under the Uniform Securities Act.
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Transaction Exempt
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What is exempt transaction?
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An exempt transaction is exempt from registration and advertisement requirements under the Uniform Securities Act.
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Private Placements is an _______ ______.
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Exempt Transaction
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Give an example of an exempt transaction
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A private placement is an exempt transaction.
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Define the Investment Adviser's Act of 1940
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An investment advisor that is regulated by the SEC rather than the state.
Also known as a Federal Covered Advisor because they are regulated on the federal level instead of the state level. |
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What is another name for an Investment Advisor?
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A Federal Covered Advisor
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_______ _______ ______ are those who manage investments company (mutual fund) portfolios.
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Federal Covered Advisor
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________ _______ ______ are those who manage more than $30 million in assets under management.
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Federal Covered Advisor
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Another name for a Federal Covered Advisor is an _________ ________.
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Investment Advisor
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If a person is a federal covered advisor, is it required to register at the state level?
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State registration is NOT required for Federal Covered Advisors.
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What do most states require Federal Covered Advisors to file?
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1) Copies of the registration forms they send to the SEC
2) A consent to service of process form 3) Pay a filing fee |
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Federal covered security are ______ from state registration.
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Exempt
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New securities issued by companies whose securities trade on a 'national securities exchange' are considered _______ _______ _______ and are considered _______ from state registration.
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federal covered security
exempt |
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Securities issued by investment companies (mutual funds) are considered ______ from state registration.
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exempt
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Securities issued by investment companies are _______ _______ _______.
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Federal covered securities
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Securities issued by mutual funds are _______ _______ _______.
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Federal covered securities
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Federal Covered Securities exempt from state registration include:
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1) New securities that trade on the 'national securities exchange'
2) Securities that trade on the NASDAQ, including any senior or equal to that security 3) New securities issued by mutual fund/investment companies. |
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_______ bond is a fidelity bond.
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Surety
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A ______ ______ indemnifies customers against losses due to check forgery, lost securities or fraudulent trading.
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Fidelity Bond or Surety Bond
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Definition of 'Indemnity'
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Compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability for damages. The concept of indemnity is based on a contractual agreement made between two parties, in which one party agrees to pay for potential losses or damages caused by the other party. A typical example is an insurance contract, whereby one party (the insurer) agrees to compensate the other (the insured) for any damages or losses, in return for premiums paid by the insured to the insurer.
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Exchange List examples
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London Stock Exchange
NASDAQ NYSE |
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A ________ ________ indemnifies a client against loses due to check forgery, lost securities, or fraudulent trading MAY be required of every agent, broker/dealer and investment advisor at the discretion of the Administrator.
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Fidelity Bond
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The Administrator may require broker dealers to obtain a surety bond which specific requirements:
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That minimum coverage is not less than $35,000
Exceptions: 1) B/D's with capital of $35,000 MAY be exempt from this requirement 2) Deposits of cash or securities are acceptable replacements of the bond |
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How much can the Administrator make a B/D obtain in a surety bond?
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Not less than $35,000 minimum
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The deliberate concealment, misrepresentation or omission of material information or the truth to deceive or manipulate another party for unlawful or unfair gains is defined as _______.
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Fraud
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Securities that guarantee as to the payment of principal, interest or dividends from a source other than the issuer, is defined as a ___________ __________.
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Guaranteed Security
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Material and non-public information obtained or used by person for the purpose of trading in securities is defined as ___________ __________.
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Inside Information
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Any person who has non-public knowledge (material information) about a corporation is considered to be a(n) ____________.
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Insider
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Directors, officers and stockholders who own 10% or more of ANY class of equity security of a corporation is known as a(n) __________.
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Insider
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Material information is considered to be ...
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non-public knowledge.
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Define Institutional Investor
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An organization that trades large volumes of securities, such as mutual funds.
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An organization that trades large volumes of securities, such as mutual funds is known as a(n) __________ ________.
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Institutional Investor
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Investment Advisors (a.k.a. Federal Covered Advisors) are not the following:
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1) Banks, savings institutions and trust companies
2) Professionals whose services are 'solely incidental' to the practice of their profession such as lawyers, accountants, teachers and engineers and do not charge a 'separate fee' 3) B/D's offering investment portfolio advice as part of their business and do not receive any special compensation for the service 4) Publishers of any financial publications of general, regular or paid circulation; however the person who sells the subscriptions is a investment advisor 5) Persons that do not conduct business within that state, limiting activity to no more than five clients in any 12 consecutive months 6) Investment adviser representatives |
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True or False
An investment advisor is also known as an IAR. |
False
An investment advisor is NOT an Investment Advisor Representative |
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Persons having no place of business within the state and whose activities are limited to other investment advisers, broker/dealers, banks, savings institutions, trust companies, insurance companies, pension or profit trusts, or other financial or institutional buyers OR no more than five clients in any 12 consecutive months.
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Therefore are not considered an Investment Advisor
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Any person compensated (either by a flat fee or % of assets managed) who offers investment advice either directly or though publications/writings, as to the value of securities or investing in, purchasing or selling securities; or as a part of their regular business is compensated, issues or promulgates analyses or reports concerning securities is known as a(n) _________ __________.
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Investment Advisor
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Any partner, officer, director or individual 'employed by or associated with an investment adviser is known as a(n) ________ ________ _________ who:
* Gives investment advice or makes recommendations *Manages clients accounts or portfolios *Determines which investment recommendations or advice should be given * Offers or sells investment advisory services * Supervises employees involved in any of these activities |
Investment Advisor Representative
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A person who offers or sells investment advice is known as ________________
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An Investment Advisor Representative
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A partner or director who supervises employees that makes recommendations or gives investment advice is known as a(n) ___________
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Investment Advisor Representative
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A(n) ______________ provides investment advice/ recommendations while managing client accounts.
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Investment Advisor Representative
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An issuer transaction is called a ___________.
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Primary transaction
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According to the Uniform Securities Act, any person who issues or proposes to issue any security is the ___________.
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Issuer
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NSMIA
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National Securities Markets Improvement Act
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Federal covered advisors are those who manage federal covered securities portfolios such as ________.
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Mutual funds
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(NSMIA) National Securities Markets Improvement Act
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The federal law regarding the division of responsibilities between federal regulators and the state securities administrators regarding Mutual fund regulation and the registration of investment advisers.
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Liquid capital maintained by a broker dealer as required by law for customer protection is known as ___________.
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Net Capital
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Define Liquid capital
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Is cash and assets readily convertible to cash
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A person other than the issuer of a security is known as ___________.
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the non-issuer
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There is not a direct or indirect benefit for the issuer.
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Non-Issuer
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A transaction where the proceeds go to the selling stockholder is known as ________________.
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A non-issuer transaction
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A non-issuer transaction is also known as a _______ _______ _______.
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secondary market transaction
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A gift of 'assessable stock' is considered a(n) ______ ______ _______.
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offer and sale
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Any security given or delivered with, as a 'bonus' for the 'purchase of securities or merchandise' is considered to have been offered and sold for 'value' is a(n) _____ _____ _____.
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offer and sale
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Every _____ ___ _____of a 'warrant or right to purchase' of another security or convertible to another security is considered to be a(n) _______.
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sale or offer
offer |
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A(n) _______ includes every solicitation to sell a security for value 'and' every solicitation of a(n) ______ to buy a security for value.
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offer
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A(n) ______ is the act of conveying ownership of a security for 'money or other value'.
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sale
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True or false
Bona fide pledges are considered to be a sale and an offer. |
False
Sales and offers to sell DO NOT include bona fide pledges or loans like using stock as collateral for a loan. |
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True or False
A loan using stock as collateral is considered a sale. |
False
Sales and offers to sell DO NOT include bona fide pledges or loans like using stock as collateral for a loan. |
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True or false
Warrants are considered a sale or offer. |
True
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True or false
Stock dividends in lieu of cash dividends, 'if nothing of value is given' by the stockholders for the dividend is NOT considered a sale or offer. |
True
The key word here is 'value'. If value is attached it would make this statement false. |
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True or false
Stockholder-approved mergers are considered a offer or a sale. |
False
Stockholder - approved 'mergers' of the sale of corporate assets in consideration of the issuance of securities of another corporation are NOT considered an offer or sale. |
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True or False
Consequence of a judicially-approved business reorganization is an offer or a sale. |
False
Consequence of a judicially-approved business reorganization is NOT an offer or a sale. |
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Sales and Offers do NOT include 4 items:
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1) Bona Fide pledges or loans
2) Stock dividends in lieu of cash dividends 3) Stockholder approved mergers 4) Business reorganization ordered by the court |
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An offer or a sale is:
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1) Any security given or delivered with as a bonus or purchase with securities or merchandise having been offered and sold for a 'value'
2) A gift of 'assessable stock' 3) A Warrant or right to purchase, or a convertible security |
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A ______ is defined as an individual, a corporation, a partnership, an estate, an association, a fund, a joint stock company, an unincorporated organization, a trust in which the interests of the beneficiaries are evidenced by a security, a government or a political subdivision of a government.
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Person
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The legal document that must be given to every investor who purchases registered securities in a primary offering as required by the Securities Act of 1933.
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Prospectus
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This document describes the details of the company and the particular offering.
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Prospectus
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The _________ is a summary of the registration statement as filed with the SEC.
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Prospectus
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Securities Act of 1933
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States that every investor who purchases a registered securities in the primary offering must be provided a prospectus. It is a legal document.
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Registration by coordination
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A security is eligible for blue-sky registration by coordination in a state if the issuer files for registration of that security under the Securities Act of 1933 and files duplicates of the registration documents with the state administrator.
The state registration becomes effective at the same time the federal registration statement becomes effective. |
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Registration by coordination
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The state registration becomes effective at the same time the federal registration statement becomes effective.
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Registration by coordination
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A security is eligible for registration by coordination in a state if the issuer files for registration and files duplicates of the registration documents with the state administrator.
It is coordinated under the blue sky laws. |
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A security is eligible for registration by ____________ in a state if the issuer files for registration and files duplicates of the registration documents with the state administrator.
A) Qualification B) Notice Filing C) Coordination |
Coordination
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Securities Act of 1933
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The federal legislation requiring the 'full and fair disclosure' of all material information about the issuance of 'new securities'.
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The federal legislation requiring the 'full and fair disclosure' of all material information about the issuance of 'new securities'. Which act is this?
A) Investment Advisor's Act of 1940 B) Securities Act of 1933 C) Securities Exchange Act of 1934 |
Securities Act of 1933
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Registration By Qualification
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A security is eligible for Blue Sky registration by Qualification in a state if the issuer files 'complete registration documents' for that security with the state Administrator, meets minimum net worth, disclosure and other requirements and files appropriate registration fees. 'The state registration becomes effective when the Administrator so orders'. A newly formed company registering securities for the first time in a state would have to register its securities by Qualification.
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A newly formed company registering securities for the first time in a state would have to register its securities by __________.
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Registration By Qualification
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The state registration becomes effective when the Administrator so orders.
A) Registration by Notice Filing B) Registration by Coordination C) Registration by Qualification |
C) Registration By Qualification
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A security is eligible for Blue Sky registration in a state if the issuer files complete registration documents, meets minimum net worth, proper disclosure and files appropriate registration fees.
A) Registration by Notice Filing B) Registration by Coordination C) Registration by Qualification |
Registration By Qualification
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Match the items:
A) Registration by Notice Filing B) Registration by Coordination C) Registration by Qualification 1) The state registration becomes effective when the Administrator so orders. 2) The state registration becomes effective at the same time the federal registration statement becomes effective or when all 'filing' requirements are met. 3) The state registration becomes effective at the same time the SEC registration does. |
A3
B2 C1 |
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Blue sky laws this type of registration:
1) "Short form" registration 2) A consent to service of process 3) Pay filing fees |
Registration by notice filing
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Short form registration means
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Requires the issuer to file copies of the registration statement filed with the SEC
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When a company isn't new, in other words already established, the blue sky laws allow for what type of registration?
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Registration by notice filing
Key word here is - existing company that has a proven past record- everything has been filed already, they are just added newly issue security |
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A newly formed company registering securities for the first time in a state would have to register its securities by _________.
A) Registration by Notice Filing B) Registration by Coordination C) Registration by Qualification |
c) Registration by Qualification
Key word is new formed company, it needs to make sure its qualified to do so. |
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Registration by coordination is simply coordinating both the federal and the state registration at the same time.
A) Registration by Notice Filing B) Registration by Coordination C) Registration by Qualification |
B) Registration by coordination
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If the new issues of an established company are NOT federally covered, meaning not listed on the stock exchange or on the NASD, they would be registered in the 'state' level by ...
A) Registration by Qualification B) Registration by Coordination C) Registration by Notice Filing |
C) Registration by Notice Filing
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NASD
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National Market System
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Securities and Exchange Commission (SEC)
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The commission, created by Congress to protect investors, that enforces the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940 and other federal securities laws.
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What is a security?
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Any note, stock or bond, investment contract, debenture, certificate of interest in profit sharing or partnership agreement, certificate of deposit, collateral trust certificate, voting trust certificate, pre-organization certificate, option of a security or other instrument.
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Definition of a Debenture
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A type of debt instrument that is not secured by physical assets or collateral. Debentures are backed only by the general creditworthiness and reputation of the issuer. Both corporations and governments frequently issue this type of bond in order to secure capital. Like other types of bonds, debentures are documented in an indenture.
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Example of a Debenture issued by the government
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An example of a government debenture would be any government-issued Treasury bond (T-bond) or Treasury bill (T-bill).
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True or False
An insurance policy or fixed annuity is NOT a security. |
True
Variable life insurance or annuity are considered securities though. |
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Basic definition for being a security
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Whether the investor invest their money in a common enterprise and is led to expect profits from the managerial efforts of the promoter or a third party.
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A _____ is defined as any instrument that can be traded for value.
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Security
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An ________ is considered a security if a person invests their money in a common enterprise with the 'expectations of profit' form the managerial efforts of a 3rd party.
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Investment
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______________ and ______________ are NOT securities.
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Insurance Policies and Fixed Annuities
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Insurance Policies are/are not securities
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NOT.
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Fixed Annuities
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are NOT securities.
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Commodity Option Contracts are _______
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Securities
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Commodity Future Contracts are/ are not securities
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NOT
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IRA and KEOGH plans are or are not a security?
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Are Not a security, it is an investment vehicle.
Investments are a security if a profit can be made off of the efforts of others. It is not in a common enterprise (think Individual Retirement plan) . |
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Any person who issues or proposes to issue any security
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Issuer
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Issuer transaction
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is done in the primary market.
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Non-Issuer transaction
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is done in the secondary market, such as the OTC or on an exchange and does not benefit the issuer.
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Broker/Dealer
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is a securities firm.
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The firm may act in dual capacity as both but not in the same transaction.
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Broker Dealer
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A ______ always acts as an agent for the accounts of customers.
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Broker
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Always acts for their own account, buying and selling securities for their own inventory.
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Dealer
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A market maker is a __________.
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Dealer
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A broker dealer may be an agent but
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an agent can not be a broker dealer.
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Broker / Dealers must register with:
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1) SEC
2) NASD 3) State Securities Division |
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The word "_____" refers to every contract to sell a security or interest in a security, including a security given as a bonus with the purchase of another security or merchandise, or a gift of assessable stock .
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Sale
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The term " ________" is defined as an attempt to solicit a purchase or sale in a security .
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Offer to sell
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An offer includes every offer to "dispose of a security" for a client or "solicitation of an ____________ a security from a client for "value".
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offer to buy
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Offer to buy or sell, includes:
1) 2) 3) 4) |
1) Gift of assessable stock
2) Warrants 3) Securities offered as a 'Bonus' for buying other securities or merchandise 4) Rights |
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Not considered to be an offer to buy or sell are:
1) 2) 3) 4) |
1) Bona fide pledges or loans
2) Stock dividends 3) Stockholder approved mergers 4) Acts incident to approved corporate 'reorganizations' |
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A "________" security is one guaranteed for the payment of Principal, Interest or Dividends
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Guaranteed
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Insurance policies or endowments ________ securities, unless variable.
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Are NOT
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A "______" transaction is just another name for a primary market transaction and will require registration, unless it is exempt or an exempt transaction.
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Issuer
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A "______" transaction is just another name for a secondary market trade, such as a 'transaction made by selling stockholders'.
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Non-issuer
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Regardless as to what an agent sells, if an agent represents a broker / dealer then ....
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The agent must be registered
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Unless exempt, ______________ must register in every state they sell in.
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Broker/dealers
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Unless exempt, ______________ must register in every state they sell in.
a) Agent b) Investment Advisor Representative c) Investment Advisor d) Broker / dealers |
D) Broker/dealers
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A _____ security must be registered in every state where it will be sold.
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Non-exempt
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The definition of a broker - dealer .....
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does not include agents, issuers or banks.
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True or False
A bank is also considered a broker dealer. |
False
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True or False
An Issuer is also considered a broker dealer. |
False
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True or False
An agent is also a broker dealer. |
False
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True or False
A broker dealer can also be an agent. |
True
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