Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
8 Cards in this Set
- Front
- Back
|
FINRA Rule 5130
|
Covers the restrictions on the purchase and sale of IPOS by restricted persons
|
|
|
A person is considered to be restricted if:
|
It is anyone that is in the brokerage business & their immediate family
|
|
|
Immediate family does NOT include
|
1.Aunts/uncles
2.Grandparents |
|
|
T or F
Purchases by a b/d that has been formed as an inv partnership are allowed as long as the accountts do not exceed 10% of the account |
T
|
|
|
Preconditions of sale
|
Member firm must obtained verification that the account is eligible within the past 12 months
|
|
|
Following accounts would be allowed to purchase a new issue
|
1.an inv company registered under the inv company act of 1940
2.Trust fund with 1000+ accts 3.Insurance company that received premiums for 1000+ policyholders 4.An acct if the beneficial interest of restricted person do not exceed 10% |
|
|
Standby purchasers
|
b/d's allowed to purchase the stock if:
1.agreement is disclosed in the prospectus 2.is a written agreement 3.managing underwriter represents in WRITING that it was unable to find any other buyes 4.securities cannot be sold for 3 months after purchase |
|
|
Under-subscribed
|
When underwriteers buy the IPO for their own accounts bc noone else wanted them
|
