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9 Cards in this Set

  • Front
  • Back
To qualify for registration of securities by NOTIFICATION, a firm must..? (
1. Be in business for at least 3 years
2. Have at least 4mm in net worth or 2mm and a positive income for 2 of the last 3 years
3. At least 400,000 shares owned by the public
4. A min share price of $5
5. And the total warrents and options held by officers, directors, and underwriters cannot exceed 10% of the shares outstanding
Registration of securities by COORDINATION is generally done for what reasons?
It is often done by companies that don't meet all of the financial requirements of NOTIFICATION or have not been in business 3 years. To register this way the issuer will has to have already filed for registration with the SEC and the admin reviews the registration and coordinates with the SEC in ensuring that it contains all of the proper info
Registering Securities by QUALIFICATION is done by who and why?
1. Done by issuers that are not going to be registered with the SEC
2. Also done by issuers of Muni's but only in the state where they are issued (they're exempt elsewhere)
3. Done when they don't qualify for any other type of registration
4. Require a lot more information to be provided and closer scrutiny by the admin
These 3 things are not considered a sale.
1. Stock Dividend
2. Exchange of stock due to a merger
3. Using Stock as collateral for a loan
What is the rule for determining if something is a person?
If you can open an account for's a person. A person is generally any entitity that can act on it's own behalf.
These 6 categories of securities will always qualify as exemept securities?
1. Government Securities
2. Muni's
3. Bank Securities
4. Insurance Co. Securities
5. Railroad S's (Monopoly)
6. Public Utility S's (Monopoly)
Assessable Stock is...?
Is stock sold at a discount and if the corp needs more money they'll assess the holder for the difference
What is a Cross Agency Transaction and what are the rules governing it?
It is where an investment advisor who also acts as a B/D engages in a transation where he is the IA and B/D on both sided of the transaction. In both the buyer and seller are his clients. They cannot recommend the transaction to both parties and they must disclose to the clients that they may collect commissions on both sides, and it may be a conflict of interest. Also they must disclose their renumeration and an annual disclosure.
What are "Soft Dollars?"
Soft Dollars are any compensation either monetarilly or through the offering of products and services by a BD in exchange for an Investment Advisor sending business thier way