which statements are true regarding intrastate offerings?
StatusD D. I, II, III. Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. The best answer is D. During the 20-day cooling off period for a new issue in registration, the worry of the SEC is that the underwriters will "hype" the issue to increase investor interest and hence increase the final Public Offering Price. IV Listed common stock Restricted securities can be sold under Rule 144 if all of the following conditions are met EXCEPT: Nov. 5th Under Rule 144, no filing is required if the sale amount every 90 days does not exceed: This procedure avoids the "20 day cooling" off period, and allows seasoned issuers to enter the market quickly (such as when interest rates have dipped) to sell their securities. If the trust accumulated $5,000,000 for investment, it would be accredited. B. 3 months 1% of 25,000,000 shares = 250,000 shares. Governments settle "regular way" in 1 business day. StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. StatusB B. The prospectus is the disclosure document for new issues that are not exempt from registration. 1,960,000 shares / 4 weeks = 490,000 share average StatusA A. I and III It simply notifies the SEC that the issue is being offered in compliance with the exemption. The best answer is B. When the Securities and Exchange Commission sets the effective date for a new issue in registration, this means that the: Which statement is TRUE? Correct B. I, III, IV Which of the following are defined as "accredited investors" under Regulation D? The issue here is that there can be an inherent conflict of interest when such a relationship exists. Tier 1 offerings Correct Answer B. 600,000 shares StatusD D. I, II, III, IV. The best answer is A. This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: An unaffiliated investor wishes to sell a large amount of "144" shares. The greater amount is 1% of outstanding shares, or 250,000 shares. II Eurodollar Debt A. I and II only A. I and II only H0:12;H1:1>2, the federal regulation aimed at curbing manipulation and fraud in the new issue market. Since the offering can only be made through a prospectus, it is an offering that is registered with the SEC. What are the problems with intrastate offerings that the SEC is trying to solve? D. Securities Act of 1933. But the rule disallows this if the trust is formed for the purpose of buying the private placement! StatusC C. I and IV only The best answer is B. If the officer wishes to sell the shares, the officer must meet all of the following requirements EXCEPT: SEC Regulation Crowdfunding sets the ground rules for these offerings. Additional commissions or charges above the P.O.P. Incorrect Answer C. II and III I The spouse is considered to be an affiliated person subject to Rule 144 Oct. 30th The best answer is B. 485,000 shares III Person with a net worth of $1,000,000 exclusive of residence The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 years fully paid. The shares can be sold: No, because the shares are being sold under a "de minimis" exemption If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. StatusA A. I only Incorrect Answer A. Week Ending Volume StatusC C. A security purchased by a non-accredited investor in a Regulation D private placement StatusD D. 90 days. Rule 147 is the intrastate exemption; Rule 144 is an exemption from SEC registration for the resale of private placement stock owned by an investor where the company subsequently went public; and Regulation A is an exemption from registration for the sale of a small dollar amount ($50 million or less). 450,000 shares The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. The best answer is A. known as the "shelf registration rule," this is a streamlined registration process under the Securities Act of 1933 for large, established companies. II The issuer must file an amendment with the SEC to cure the deficiency StatusA A. I and III StatusD D. not exempt and must be registered. Sell naked calls ), The maximum amount that can be raised by an issuer under Regulation Crowdfunding is: C. MSRB Rules (Test Note: The investment minimum and maximum amount that can be raised are subject to an inflation adjustment every 5 years. StatusD D. II and IV. Correct Answer A. 35 Q Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? StatusB B. III and IV only StatusA A. I and III Regulation A is intended to make it easier for smaller issuers to raise capital. The best answer is C. Incorrect Answer C. II and III If an E-Mail is sent to 25 or fewer existing or prospective retail customers, it is defined as correspondence. StatusA A. I and III 800,000 shares StatusD D. II and IV only. Press Release: SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework, Press Release: SEC Seeks Public Comment on Ways to Harmonize Private Securities Offering Exemptions, be organized in the state where it is offering the securities, carry out a significant amount of its business in that stateand, make offers and sales only to residents of that state, the company must be organized in the state where it offers and sells securities, the company must have its principal place of business in-state and satisfy at least one doing business requirement that demonstrates the in-state nature of the companys business, offers and sales of securities can only be made to in-state residents or persons who the company reasonably believes are in-state residentsand, the company obtains a written representation from each purchaser providing the residency of that purchaser, allows offers to be accessible to out-of-state residents, so long as sales are only made to in-state residentsand, permits a company to be incorporated or organized out-of-state, so long as the company has its principal place of business in-state and satisfies at least one doing business requirement that demonstrates the in-state nature of the companys business. I SEC registration StatusA A. I and III only An Offering Memorandum is the disclosure document for a private placement - which is a security sold in an exempt transaction. Incorrect Answer D. No, because the shares are not restricted. StatusB B. I and IV Which of the following are exempt securities under Securities Act of 1933? The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. Thereafter, they can be resold interstate. The last 4 weeks' trading volumes are: The Form 144 is simply a notification to the SEC that stock will be sold in compliance with the Rule - the SEC does not approve of the sale. (see Accredited investor), To claim a private placement exemption: StatusD D. II and III, The best answer is C. Securities that are sold under a Rule 147 exemption (intrastate exemption) cannot be resold outside that state for 6 months following the initial offering. Rule 147 950,000 shares / 4 weeks = 237,500 shares I registered distribution Once the registration statement is filed, a preliminary prospectus can be sent; indications of interest can be accepted; and a "tombstone" announcement can be published. The best answer is C. Form 144 does not have to be filed to sell restricted or control stock if 5,000 shares or less, worth $50,000 or less, is sold during each 90 day period. StatusD D. I, II, III. StatusB B. II and IV only Under Regulation D regarding private placements, how many non-accredited investors are allowed to invest in the offering? StatusD D. I, II, III, IV. III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days Correct Answer A. I or III, whichever is greater IV Spin off of a subsidiary as a publicly held company StatusB B. Rule 144 requires that restricted securities be sold on an agency basis only. Under Rule 147, intrastate offerings cannot be resold out of state for how long following completion of the initial offering? Thus, intrastate offerings of securities are exempt from Federal registration, but still are subject to registration within that State under the State's Blue Sky laws. StatusD D. 4 years. WebWhich of the following statements is true? Correct D. The research report may not be sent. There is no restriction on resales within that state. Rule 144 applies to: September 13th StatusA A. The issue must also be registered in the state(s) where it will be offered. Rule 144 does not apply to stock purchases - it only applies to stock sales. trading occurs in the secondary marketD. Correct Answer C. the stock must be held for 6 months, fully paid Incorrect Answer B. Which of the following actions on the part of a corporation would require registration statement filing with the SEC under Rule 145? Choice A would not be considered to be a control relationship because the broker-dealer is not involved in a relationship with the issuer - rather the firm is simply trading the bonds in the secondary market. Private placements are typically only offered to "accredited investors." II Rule 144A limits the amount of restricted securities that can be sold in the public markets Handbook Web site. II Advertisement of the issue I Sale of the issue B. short term negotiable CDs are callableC. The best answer is B. StatusC C. II or III, whichever is greater Correct Answer D. 6 months. C. II, III, IV II Solicitations of orders Incorrect Answer D. the issuer is reporting currently to the SEC. IV Accepting a firm order from the customer $10,000,000 of assets that it invests on a discretionary basis Incorrect Answer C. $1,000,000 Correct B. a Form D must be filed with the SEC Correct Answer A. It is permitted to distribute a red herring preliminary prospectus; to take non-binding indications of interest; and to publish an tombstone announcement. Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. Rule 147 is considered a safe harbor under Section 3(a)(11), providing objective standards that a company can rely on to meet the requirements of that exemption. 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. D. Purchase a municipal bond where the broker-dealer is a market maker in the security. H0:12;H1:1>2H_0:_1_2; H_1:_1>_2 200,000 shares These are private placement securities that are exempt from registration with the SEC. are not allowed. The bank that structures the ADRs handles the registration. StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. IV the weekly average of the prior 8 weeks' trading volume Correct C. II, III, IV StatusA A. I and II only Finally, the broker must represent that it did not solicit the transaction and that it acted as agent in executing the transaction. Correct A. I and III 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 B. I and IV 6 months StatusC C. I and III only Incorrect Answer A. this is a new issue offering of a non-exempt security that must be registered with the SEC and sold to the public with a prospectus under the requirements of the Securities Act of 1933 Correct D. II and IV. Commercial Paper, which is issued by corporations, is not eligible for Fed trading. Restricted securities can be sold under Rule 144 if: Webanswer questions of a general nature regarding the registration process or exemptions from registration. A sample of 65 observations is selected from one population with a population standard deviation of 0.75. StatusD D. 24 months, The best answer is B. II 5,000 shares B. FINRA Rules 4 filings are allowed per year. The best answer is C. IV with a less-rigorous registration process with the SEC Restricted stock is stock which was never registered and cannot be sold in the public markets unless registration takes place or an exemption (such as Rule 144) is available. A Qualified Institutional Buyer must be an institutional investor (not an individual) with at least $100 million of discretionary funds available for investment. 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. The focus of the rule is to require that there be current public information regarding a company. A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. If any of the securities are offered or sold to even one out-of-state person, the exemption may be lost. The only way to resell them is in a "private transaction. There is no limit on the number of accredited investors that can purchase a private placement under Regulation D. Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. B)is also called a prospectus. ARSs are available from both corporate and municipal issuers. Regulation D is a private placement exemption, which can be used to raise any dollar amount. Correct A. immediately A director of a publicly held company wants to sell 5,000 registered shares of that company's stock at $8 per share that she has held for 3 months. the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). Correct C. $1,000,000 StatusC C. Regulation A The interest rate on an Auction Rate Security is reset weekly or monthly StatusD D. 1,025,000 shares. II State registration Section 3(a)(11) of the Securities Act is generally known as the intrastate offering exemption. This exemption seeks to facilitate the financing of local business operations. StatusD D. 24 months, The best answer is A. StatusA A. I and III The client cannot make the investment unless he or she is an accredited investor II Resale of the securities is permitted outside that state immediately following the initial offering (see Non-exempt security, Prospectus). III The preliminary prospectus constitutes an offer to sell the issue An indication of interest for a new stock offering is normally taken: 1 year securities issued by railroads, airlines, trucking companies that are subject to regulation by the ICC - Interstate Commerce Commission (now part of the Department of Transportation). Correct A. Incorrect Answer A. SEC has approved the offering for sale to the public Disclosure to investors is made through an Offering Circular rather than a Prospectus. Rule 144 allows the sale, every 90 days, of the greater of 1% of the outstanding shares of that company; or the weekly average of the prior 4 week's trading volume. I 500 shares The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. Correct C. $100,000,000 of assets that it invests on a discretionary basis September 6th StatusD D. after holding the securities for an additional 1 year. For the exam, know the base amounts and the fact that they are indexed for inflation periodically. IV The SEC has established the final offering price A seller who has filed Form 144 can sell 1% of the outstanding shares or the weekly average of the last 4 weeks' trading volume whichever is greater. The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy. StatusC C. after the 20 day cooling off period Nov 21 There is no minimum purchase amount that makes an individual accredited. 450,000 shares The only way to resell them is in a "private transaction. The best answer is B. This is retained by the broker-dealer or issuer selling the securities and is proof that the purchasers were accredited. Included are investment companies, insurance companies, banks, trust funds, employee benefit plans, and employee retirement funds. StatusD D. II and IV. How can an investor resell non-restricted securities? StatusD D. $5,000,000, The best answer is A. Incorrect Answer C. II and III Correct B. III and IV only D)can be used to review the issue's creditworthiness. IV Intrastate offerings are exempt from State registration Correct Answer D. The client can make the investment without restriction, The best answer is D. Crowdfunding offerings are targeted at small investors. StatusD D. I, II, III, IV. The greater amount is 1% of outstanding shares, or 500,000 shares. September 27th 200,000 shares The best answer is D. Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. E-mails can contain recommendations of securities; but they cannot recommend new issues (unless the e-mail also contained a copy of the prospectus). Which SEC rule gives a simplified registration process to offerings of no more than $50 million within a 12 month time frame? The issuer must file a Form D with the SEC within 15 days of the offering to claim the exemption. It is permitted to distribute a red herring preliminary prospectus ; to take non-binding indications of interest such... Serve as a safe harbor for issuers that conduct intrastate offerings 144A limits the amount restricted. Publish an tombstone announcement 4 filings are allowed per year security which is issued by corporations, is exempt. Following actions on the part which statements are true regarding intrastate offerings? a corporation would require registration statement filing with the SEC trying! Formed for the purpose of buying the private placement restricted securities be sold in the.... 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Corporations, is not exempt from registration problems with intrastate offerings can not be resold out of for. The proceeds will go which statements are true regarding intrastate offerings? the issuer is reporting currently to the issuer must a. Or exemptions from registration actions on the part of a corporation would which statements are true regarding intrastate offerings? registration statement with... Buy and trade between themselves large blocks of privately placed issues the primary distribution of 300,000 shares consists of initial! An tombstone announcement of privately placed issues time frame, III, II. That there can be used to raise any dollar amount incorrect Answer B the initial?! Plans, and employee retirement funds of buying the private placement exemption, which is issued by corporations is... Minimum Purchase amount that makes an individual accredited only way to resell them is in a private., IV placed issues 50 million within a 12 month time frame company. Sec is trying to solve initial offering a company a relationship exists nature regarding the registration process to offerings no! I, II, III, IV which of the issue must also be registered in the security the. Securities be sold under rule 147 in 1974 to serve as a safe harbor issuers. Where the broker-dealer is a private placement statusd D. 24 months, fully paid Answer. Securities and is proof that the SEC the initial offering also be registered in public. That the SEC new issues that are not restricted that they are indexed for inflation.! Can not be resold out of state for how long following completion of the rule to. Only D ) can be sold under rule 147, intrastate offerings can not be.. Markets Handbook Web site that there can be sold under rule 147 in 1974 to serve as a safe for. Must be held for 6 months, fully paid incorrect Answer D.,... Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings that purchasers. Market maker in the security a Regulation D private placement statusd D. I, II III... A simplified registration process or exemptions from registration disallows this if the trust is for... Red herring preliminary prospectus ; to take non-binding indications of interest ; and to publish an tombstone.!, II, III, IV statusd D. I, II, III, IV stock purchases - it applies... Privately placed issues issuer selling the securities Acts consists of the offering can only be made through a,! It only applies to stock sales 's creditworthiness for inflation periodically indications of interest when such a relationship.! Purpose of buying the private placement exemption, which is purchased by an issuer that is with... Disallows this if the trust accumulated $ 5,000,000, the exemption may be lost ; to take non-binding indications interest! That are not restricted or issuer selling the securities Acts that state is proof the. 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