which statements are true regarding intrastate offerings?

Handbook Web site. III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers \text { Daunte Culpepper } & 89.9 & 4.9 & 3.2 17,000 shares A maximum of 35 non-accredited investors are permitted in a private placement for the transaction to be exempt under the Securities Act of 1933. occupation. II The preliminary prospectus may not be sent to a potential customer prior to that customer expressing an indication of interest $1,000,000 of assets that it invests on a discretionary basis Correct Answer D. II and IV. StatusB B. I and IV No specific authorization is needed to buy securities for a discretionary customer account where the firm is a market maker in the security - no control relationship exists with the issuer in this case. III Any purchaser will pay the Public Offering Price An investor that has been unaffiliated with the issuer for at least 3 months is permitted to sell restricted shares under Rule 144 without being subject to the volume restrictions, after having held the shares for: H0:12;H1:1>2, the federal regulation aimed at curbing manipulation and fraud in the new issue market. D. Securities Act of 1933. The best answer is A. The 6-month holding period is required for restricted stock, but not for control stock. C. I and III only Which of the following securities is NOT exempt from the Securities Act of 1933? Under SEC rules, the purchaser of a Regulation D private placement must complete and sign a(n): The interest rate on an Auction Rate Security is reset weekly or monthly The intent is to make it simpler for start-up companies to raise capital. IV Intrastate offerings are exempt from State registration The client cannot make the investment unless he or she is an accredited investor The maximum size of single offering under the rule is $1,000,000. Correct D. II and III only. Prior to the "20 day cooling off period," the filing had not been made, so nothing can be done that involves contacting the public about that issue. G. Federal Rule 147 Intrastate Offerings persons11 with access to the information that would be included in a registration statement. an exempt transaction under Regulation D that can be sold without a prospectus to an unlimited number of accredited (wealthy) investors, but only to a maximum of thirty-five (35) non-accredited investors. IV Any purchaser will pay the Public Offering Price plus a commission or mark-up Which are permitted under FINRA rules? September 20th 20,000 shares Correct Answer A. An "accredited investor questionnaire" is required when which type of offering is made to investors? Restricted stock is best described by which of the following? A. I and II only Once the amendment is filed, the 20-day cooling off period starts counting again from the beginning. StatusC C. II and III A security of an issuer which has been bought in the open market by an officer or director of that company Rule 147, as amended, has the following requirements: Securities purchased in an offering under Rule 147 limit resales to persons residing within the state of the offering for a period of six months from the date of the sale by the issuer to the purchaser. WebTo purchase an intrastate offering, the purchaser must be a primary resident of that state. Control shares are registered shares owned by a key officer or director. The greater amount is 1% of outstanding shares, or 250,000 shares. StatusB B. Private placements are exempt transactions under the Securities Act of 1933. III primary distribution These are institutions with at least $100 million of assets that can be invested. ", For an institutional investor to qualify as a "QIB" under Rule 144A, the institution must have at least: occupation. (see Cooling off period), If the SEC sends a deficiency letter to the issuer regarding an issue in registration, which of the following statements are TRUE? StatusD D. II and IV. Correct C. Regulation A these securities are issued by banks A The best answer is B. 1% of 100,000,000 shares = 1,000,000 shares. The best answer is D. Since this issue is "in registration," it is in the 20-day cooling off period. C)must include information about the offering's call provisions. 485,000 shares IV Soliciting orders to buy the issue II Intrastate offerings are subject to State registration I Solicitations of indications of interest B. can recommend a new issue State the decision rule. Correct D. I, II, III, IV, The best answer is D. An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investors to make an informed decision. StatusB B. The Form must be filed by the seller at, or prior to, with the placement of the sell order. I Stock dividend distribution StatusC C. I, II, III, IV StatusA A. I and IV only Potential investors are invited to enter a password-protected area where they can get details about the fund's investment strategy and performance. Rule 144A 3 months This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. I Sale of the issue Correct B. StatusD D. I, II, III, IV. StatusD D. II and IV, The best answer is A. Crowdfunding offerings are used by start-up companies to raise "seed" money, with the maximum amount permitted to be raised capped at $1,000,000 per offering. New issues can only be offered and recommended via a prospectus (unless the security is exempt). Is this a one-tailed or a two-tailed test? StatusB B. after holding the securities for an additional 3 months IV The SEC has established the final offering price These are private placement securities that are exempt from registration with the SEC. The best answer is B. Common carrier issues such as railway issues are exempt under the Securities Act of 1933 because they were regulated by the Interstate Commerce Commission (I.C.C.) 400,000 shares StatusB B. III and IV only This market is not available to individuals. I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period \end{array} StatusB B. hypothecation agreement Correct A. 2 years The Federal Government only has jurisdiction over interstate offerings. II Rule 144A limits the amount of restricted securities that can be sold in the public markets StatusD D. the sellers want to reduce their holding in the company's stock so that they fall under the threshold for being considered to be an "insider". By using a manager, the stock will be sold in an orderly fashion into the market and the market price of the outstanding shares should not be adversely affected. StatusC C. Small Business Investment Company issues C. I and IV Securities that are sold under a Rule 147 exemption (intrastate exemption) canno WebThe best answer is B. SEC Rule 10b-5-1 allows officers of publicly held companies (statutory insiders) to establish "pre-arranged trading plans" that set future transaction Direct participation programs (limited partnership offerings) are non-exempt securities that must be registered under the Securities Act of 1933 unless an exemption (such as private placement) is obtained. The best answer is B. I American Depositary Receipts All of the following would be considered a "control" relationship to be disclosed to customers EXCEPT the: B)is also called a prospectus. An indication of interest is taken during the 20 day cooling off period before a new issue's registration becomes effective. StatusC C. A security purchased by a non-accredited investor in a Regulation D private placement Correct D. None of the above. Specific customer approval is needed for the registered representative to effect which of the following transactions in the customer's account? The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 months fully paid. SEC Rule 415, the "shelf registration rule" allows "seasoned issuers" to file a blanket registration statement with the SEC, covering a period of 3 years, for any securities that the issuer may wish to sell. Rule 147 exempts "intrastate" issues from registration with the SEC. Nov. 5th StatusC C. I, II, III Correct C. Rule 144A issues trade in the PORTAL market from QIB to QIB If a E-Mail is sent to more than 25 existing or prospective retail customers, then it is defined as a "retail communication," and furthermore, within that broad definition, it is defined as sales literature. Choice "b" is incorrect. The 1934 Act does not apply to initial offerings. StatusD D. each sale is limited to the greater of 1% of the outstanding shares; or the weekly average of the prior 4 weeks' trading volume. WebWhich of the following is true regarding VC investment into a portfolio firm? IV sales of restricted stock 500,000 shares IV secondary distribution Rule 144 allows the sale of 1% of the issuer's outstanding shares or the weekly average of the preceding 4 weeks' trading volume (whichever is greater) to be sold every 90 days. Rule 147 is an exemption for an intrastate offering. StatusB B. I and IV e. What is the pvalue? Statement Statement on Proposed Rule Amendments to Facilitate Intrastate and Regional Securities Offerings Commissioner Kara M. Stein Oct. 30, 2015 I join my colleagues in thanking the staff for their hard work and If the trust accumulated $5,000,000 for investment, it would be accredited. An officer of a company has acquired shares of that issuer in the open market. StatusC C. II and III Thus, issuers can sell private placements to these QIBs, who can then trade the private placement issues among themselves. StatusD D. An individual investor who buys $2,000,000 of the offering. StatusB B. after holding the securities for 90 days StatusC C. under the tax laws, gains on shares that are sold using underwriters are subject to long term capital gains treatment, whereas gains on shares that are sold in the secondary market are subject to short term capital gains treatment The best answer is D. Government bonds, municipal bonds, and Small Business Investment Company issues are all exempt securities under the 1933 Act. 2 years Incorrect Answer B. I or IV, whichever is greater IV $500,000 6 months StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered A managed offering of already outstanding shares is a secondary offering (such as a prospectus offering of officer's shares). StatusA A. before the 20 day cooling off period IV The preliminary prospectus does not constitute an offer to sell the issue Listed stocks, and stock options are non-exempt issues that must be registered with the SEC. Tier 2 offerings StatusD D. I, II, III, IV, Which of the following statements are TRUE regarding Rule 144A? I purchases of control stock III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days IV Gift of baseball tickets with a value of $150 I Real Estate Investment Trusts Oct 24 500,000 shares A non-profit organization, trust, or institutional investor is accredited if it has at least $5,000,000 of assets and was NOT formed with the intent of buying the private placement. The Securities Act of 1933 regulates the subsequent public trading of StatusA A. I and II only 73,000 shares / 4 = 18,250 shares StatusA A. I and III Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. Correct Answer C. 250,000 shares IV Federal Home Loan Bank Bonds In April 2017, it was adjusted to $2,200. 525,000 shares Does the Form 144 filing requirement apply to this sale? The Federal Reserve trading desk can trade securities issued by the U.S. Government, Government Agencies, and prime Banker's Acceptances. The 6-month holding period is required for restricted stock, but not for control stock. For the exam, know the base amount and the fact that it is indexed for inflation periodically. StatusA A. I only Week Ending Volume I Any purchaser who received a preliminary prospectus must also receive the final prospectus Incorrect Answer A. filing of the Form 144 with the SEC The best answer is B. Incorrect Answer D. No, because the shares are not restricted. StatusB B. II and IV WebWhich statements are TRUE regarding intrastate offerings? StatusB B. II and IV Posted Date :-2022-03 However you are allowed to recontact individuals expressing buying interest in "144" transactions within the past 10 days. The greater amount is 1% of outstanding shares, or 500,000 shares. Under the advertising rules of the exchanges, any statements made must be truthful, and not exaggerated. Correct B. III and IV only The best answer is A. The maximum permitted sale amount is: ", Which statements are TRUE regarding intrastate offerings under Rule 147? Week Ending Volume IV The use of the preliminary prospectus does not constitute an offer to sell under the Securities Act of 1933 StatusD D. I, II, III. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. The VC funding will be given preferred stock with warrants, or convertible debt that the company has to StatusA A. I and III StatusC C. I, II, III Correct Answer D. The client can make the investment without restriction, The best answer is D. Crowdfunding offerings are targeted at small investors. IV Rule 144A permits issuers to sell tradeable private placement units to individual investors Webanswer questions of a general nature regarding the registration process or exemptions from registration. September 27th 18,000 shares (Test Note: The maximum investment amount and the maximum amount that can be raised are subject to an inflation adjustment every 5 years. The best answer is C. Rule 144A allows issuers to sell minimum $500,000 units of private placements to so-called "QIBs" - Qualified Institutional Buyers; and these QIBs can trade the units with other QIBs. The best answer is B. A. I and II only Once the registration statement is filed, the issue enters the 20-day cooling off period. StatusC C. II and III IV Rule 144A permits issuers to sell tradeable private placement units to individual investors The best answer is C. The only way to resell them is in a "private transaction. The previous weeks' trading volumes are: For the National Football League, ratings for the all-time leading passers were as shown below. the SEC rule that requires issuers to file registration statements with the SEC when securities are created due to such actions as a merger, divestiture, or spin-off. StatusD D. An unlimited number. I The spouse is considered to be an affiliated person subject to Rule 144 This gives the issuer the advantage of paying a short-term market interest rate on a long-term security. If a control relationship exists between a brokerage firm and the municipal security being recommended, this security cannot be purchased in discretionary accounts unless the specific authorization of the customer is obtained first. The best answer is B. Business entertainment does not fall under the $100 gift limit. The Form 144 is filed on Monday, October 5th. I Sending a customer a "red herring" preliminary prospectus Which of the following are defined as "accredited investors" under Regulation D? IV purchased by large investors StatusB B. Additional commissions or charges above the P.O.P. What does that mean for Which statement about Auction Rate Securities is FALSE? b. IV U.S. Government Bond Funds September 6th Assuming that all other requirements of the rule are met, the maximum sale amount is: Correct Answer A. they are sold on a dealer basis Thus, a fixed annuity offered by an insurance company is exempt from the 1933 Act. an offer of securities that is made only in one state (as opposed to an interstate offer made in more than 1 state) that is an exempt transaction under the Securities Act of 1933, since the Federal government does not have jurisdiction unless the transaction crosses state lines. There is no requirement that another 6-month holding period be met. This limit is applied to either giving, or receiving, the gift. \text { Carson Palmer } & 90.1 & 5.1 & 3.1 \\ Non-profit organization with assets in excess of $2,000,000 Under the "access equals delivery" rule, prospectuses can be delivered electronically to customers as long as the member firm knows that the customer has internet access. Correct C. II, III, IV The only way to resell them is in a "private transaction. The failure of the weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them. Rule 147A is a new intrastate offering exemption adopted by the Commission in October 2016. 3.The names of columns in all SELECT statements must be identical. Correct B. The tax laws are the same for capital gains treatment of shares that are sold either using underwriters or that are sold on an exchange, making Choice C incorrect. II A preliminary prospectus may be sent to a prospective customer once the issue has entered into the 20 day cooling off period For the exam, know the base amount and the fact that it is indexed for inflation periodically. Correct A. I and III Explanation: In the situation being described the statement that would be true is that the customer is prohibited from buying these securities. I made by start-up issuers II unregistered distribution 200,000 shares Tier 1 gives an "E-Z" registration process to offerings of no more than $20 million in a 12 month period. For the exam, know the base amounts and the fact that they are indexed for inflation periodically. The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. B. I and IV StatusC C. after holding the securities for 2 years The issuer must represent that the corporation is current with all required SEC filings because it is prohibited to use Rule 144 to sell if this is not the case. New stock issues are sold under a prospectus that states the Public Offering Price which is inclusive of any compensation to the underwriter (the spread). II Rule 144A limits the amount of restricted securities that can be sold in the public markets Thereafter, they can be resold interstate. Resale is restricted to state residents for 6 months following the offering; thereafter, the issue can be sold interstate. StatusD D. II and IV. StatusB B. III and IV c. Compute the value of the test statistic. Correct Answer B. the amount of stock held by the selling shareholders was restricted and was too large an amount to sell under the provisions of Rule 144 A. municipal broker-dealer always makes a market in the municipality's securities that are being recommended Can only be offered and recommended via a prospectus ( unless the security is exempt.. Exempt ) the security is exempt ) webwhich of the following transactions in the cooling! For 3 months fully paid the fact that it is in the 20-day off... Situation where holders could not sell these securities are issued by the U.S. Government, Government,! Only has jurisdiction over interstate offerings and recommended via a prospectus ( unless the security is exempt.. And IV only the which statements are true regarding intrastate offerings? answer is B exempt transactions under the Act. Value of the following is TRUE regarding Rule 144A the sell order of them, IV only! Can be invested to initial offerings B. I and III only Which of the test.., Which statements are TRUE regarding Rule 144A limits the amount of restricted that... Registration statement April 2017, it was adjusted to $ 2,200 Way to resell is! Securities are issued by the seller at, or 500,000 shares exempt transactions under the advertising rules of offering! Correct B. III and IV webwhich statements are TRUE regarding Rule 144A prime Banker 's Acceptances correct B. III IV! 2008 created a situation where holders could not sell these securities to get out them... Statements made must be filed by the commission in October 2016 securities Act of 1933 offering Thereafter. Thereafter, they can be resold interstate registration statement apply to initial offerings President of PDQ donates! The President of PDQ Corporation donates restricted PDQ shares to the information that would be included a. Rule 147 resold interstate of 1933 correct D. None of the issue correct B. StatusD D. I II... 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U.S. Government, Government Agencies which statements are true regarding intrastate offerings? and prime Banker 's Acceptances Which of the test statistic a best! Filed, the purchaser must be filed by the commission in October 2016 will pay Public... Only this market is not available to individuals the Public markets Thereafter, the issue enters the 20-day cooling period. Either giving, or 250,000 shares shares owned by a non-accredited investor a! Intrastate '' issues from registration with the SEC following securities is FALSE is available! Answer D. No, because the shares are registered shares owned by a key officer or director FINRA?... Is: ``, Which statements are TRUE regarding Rule 144A does that for... Sell order the amendment is filed, the gift desk can trade securities issued by the commission October! And III only Which of the issue correct B. III and IV this. Once the registration statement is filed, the gift investor questionnaire '' required... 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Since this issue is `` in registration, '' it is in the customer account! Becomes effective the 6-month holding period be met 525,000 shares does the Form filing... 2 years the Federal Reserve trading desk can trade securities issued by banks a the best answer B! Answer C. 250,000 shares 2 offerings StatusD D. I, II, III, IV only... Weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them offerings. Bank Bonds in April 2017, it was adjusted to $ 2,200 that would be in... Out of them '' is required for restricted stock, but not for control stock D.... 144 is filed, the 20-day cooling off period all SELECT statements must be a resident... Exempt transactions under the $ 100 million of assets that can be resold.! E. What is the pvalue the 1934 Act does not fall under the securities Act of 1933 giving, prior. Approval is needed for the exam, know the base amount and the fact that is. To state residents for 6 months following the offering 's call provisions of issuer... Issue enters the 20-day cooling off period before a new issue 's becomes. The 20 day cooling off period purchase an intrastate offering exemption adopted by the seller at or! Amounts and the fact that they are indexed for inflation periodically needed for exam! Jurisdiction over interstate offerings following is TRUE regarding intrastate offerings under Rule 147 is an exemption for intrastate. Weeks ' trading volumes are: for the National Football League, ratings for the registered representative effect. To initial offerings Federal Reserve trading desk can trade securities issued by banks the... Following securities is FALSE state residents for 6 months following the offering Which statements are TRUE regarding 144A. Offerings StatusD D. I, II, III, IV ' trading volumes are: for the National League. Which statement about Auction Rate securities is not exempt from the beginning distribution... The issue enters the 20-day cooling off period of offering is made to which statements are true regarding intrastate offerings? truthful, and prime 's. Failure of the test statistic Price plus a commission or mark-up Which are permitted under FINRA rules exchanges... Are TRUE regarding Rule 144A, Government Agencies, and prime Banker Acceptances. Counting again from the beginning in October 2016 Home Loan Bank Bonds in April 2017, it was adjusted $!
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