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26 Cards in this Set
- Front
- Back
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considered an issuer transaction. |
pre-emptive rights offerings private placements offerings initial public offerings
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Initial public offerings Private placements Preemptive rights offerings are what type of transactions
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issuer transactions |
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Exchange trading occurs |
in the secondary market. |
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*The agent is trying to convince the successful dairy farmer to purchase shares of a U.S. Treasury fund. The agent assured the farmer that the bonds held within the fund are guaranteed by the government & therefore, the client’s money is safe. Evaluate this agent’s sales practices. |
The agent has utilized an unethical sales practice
While the bonds within the fund may be guaranteed by the U.S. Government, the fund itself is not, & its value may rise/fall due to market conditions. Although the agent didn't specifically say that the client can't lose money, it is implied that the farmer's money is "safe" based on the U.S. Government's guarantee. |
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Nonexempt securities must be registered with |
the State Securities Administrator by filing a registration statement.
not blue sky securities |
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gift of an assessable stock, by definition is |
a sale |
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Issuers of assessable stock had the right to |
assess(estimate) shareholders for the payment of additional funds. |
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Assessable stock was last issued |
decades ago. |
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Today all stock is |
non-assessable |
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some limited partnership interests are assessable giving the partnership |
the ability to demand that the partners contribute additional funds. |
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The gift of this assessable security would be deemed a |
sale it's a gift is a gift it relieves the donor of a possible future liability. |
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Stock rights & warrants have what value |
intrinsic value(calculate value) unlike additional shares from stock splits/dividends & are considered in the definition of sale |
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intrinsic |
calculated value |
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intrinsic value |
perceived or calculated value of a company, including tangible & intangible factors, using fundamental analysis |
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Excluded from the definition of sale are |
stocks pledged as collateral for a loan,
stock dividends
& stock exchanges due to mergers/reorganizations |
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stocks pledged as collateral for a loan, stock dividends & stock exchanges due to mergers/reorganizations excluded from the definition of |
a sale |
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No agent shall share in the profits/losses in a client's account unless |
there is prior written approval by the client & the agent's employing BD |
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If a firm has no office in a state, when effecting transactions with other BDs/institutional customers. it is |
not considered a BD |
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BDs when executing trades for existing clients who are not residents of the state& no place of business in that state the firm is considered in that state |
not considered BD |
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FY Brokerage has no office in State A. Under the USA, in which of the following situations would FY Brokerage be considered a broker-dealer in this state? u5 |
FY limits its sales to 10 or fewer retail customers in State A FY only engages in municipal bond transactions with its retail customers in State A
*firm must still register as a broker-dealer under the USA.
not FY limits its sales in State A to institutional customers no office in a state, it is not considered a BD when effecting transactions with other BDs/ institutional customers.FY sells stock for a customer who is on vacation in State A not considered BDs when executing trades for existing clients who are not residents of the state,
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XYZ Brokerage, which transacts business with retail customers who reside in State A a BD in state A REMEMBER: The time frame is not considered when looking at this exclusion from the definition for a broker-dealer. |
Yes broker-dealers in State A, |
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DEF Investments is solely doing business with BDs in State A, therefore the firm is excluded from the definition |
of a BDs in State A |
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Brokerage is not considered a BDs in State A, if the firm is dealing with |
an existing customer who is in State A temporarily. REMEMBER: The time frame is not considered when looking at this exclusion from the definition for a BD. |
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ABC Brokerage, which processed a trade for a customer temporarily in State A for 35 days, without having an office in State A a BD/exclusion from the definition for a BD in state A |
Not BDs in State A
ABC Brokerage is not considered a BD in State A, since the firm is dealing with an existing customer who is in State A temporarily. REMEMBER: The time frame is not considered when looking at this exclusion from the definition for a BD. |
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The USA is preempted by the rules of the: |
SEC |
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The SEC has preemptive authority over rules of |
the Uniform Securities Act & state securities administrators |
