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9 Cards in this Set
- Front
- Back
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An offering of securities in compliance with Rule 144A is sold primarily to: |
Answer: A |
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All of the following statements regarding the short sale of a listed security are true EXCEPT:
A) a short sale can be effected at any time in the trade sequence. B) short sales may take place at the opening. C) the buyer must be advised that he is purchasing borrowed shares. D) short sales may take place at the closing. |
Answer: C
On an exchange floor, short sales can be effected at any time in the trade sequence. In addition, short sales may be effected at either the opening or the closing. The buyer is never informed that shares being purchased are borrowed. |
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Which of the following provisions govern the offering of restricted shares to the public without filing a form 144?
1. The dollar amt is $1M or less 2. 100K shares or fewer are sold 3. 5K shares or fewer are sold 4. The dollar amt is $50K or less |
Answer: 3 & 4
Under Rule 144, Form 144 need not be filed if 5K or fewer shares are sold and the dollar amount is $50K or less. This de minimis rule applies to sales in any 90 day period. |
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Shortly before the end of the cooling-off period, the underwriters and reps of the issuer have a meeting to review the status of the new issue. This is called a:
A) pre-sales meeting B) syndicate meeting C) negotiation meeting D) due diligence meeting |
Answer: D
The final meeting before the end of the cooling off period is known as a due diligence meeting and is always held before the effective date of the new offering. |
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Which of the following acts requires publicly traded corporations to issue annual reports?
A) Securities Exchange Act of 1934 B) Trust Indenture Act of 1939 C) Investment Company Act of 1940 D) Securities Act of 1933 |
Answer: A
The Securities Exchange Act of 1934 mandates that public issuers file annual and quarterly reports with the SEC. |
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Which of the following acts requires full and fair disclosure of all material information about equity and debt securities offered for the first time to the public?
A) Securities Exchange Act of 1934 B) Securities Investor Protection Act of 1970 C) Securities Act of 1933 D) Trust Indenture Act of 1939 |
Answer: C
The Securities Act of 1933 regulates new issues of nonexempt securities sold to the public. |
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All of the following statements regarding the OTC market are true EXCEPT:
A) it is an auction market. B) more issues trade OTC than on the exchanges. C) it trades listed securities. D) it trades unlisted securities. |
Answer: A
The OTC market is a negotiated market. The exchanges are auction markets. |
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Smith & Co., a FINRA member firm, is preparing to underwrite securities to be issued by KLC Corp for a new business venture. For which of the following will Smith & Co. be responsible?
1. Filing the registration statement with the SEC and state regulatory bodies. 2. Providing advice on the type of security to be issued. 3. Distributing the security to the public. 4. Providing advice on how KLC can best utilize the funds. |
Answer: 2 & 3
The issuer is ultimately responsible for filing registration statements with federal & state regulatory bodies and has already determined how the money will be used. The underwriter confines his activities and advice to the type and sale of the securities. |
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Under the Securities Act of 1933, the SEC has the authority to:
1. issue stop orders regarding a new issue registration filing. 2. approve new issues. 3. review standard registration forms. 4. guarantee the accuracy of the information contained in the registration forms. |
Answer: 1 & 3
During the cooling-off period, the SEC reviews registration statements and can issue stop orders if the registration is not complete or was not filed properly. The SEC does not approve securities or guarantee that any information found within a prospectus is accurate; it only clears the securities for distribution (sale) to the public. |
