Series 24 || with 100% Accurate Solutions.
Secondary Distribution correct answers A redistribution of large block of securities held by a few
owners (insiders/institutions) - NOT secondary market. May be purchased on margin
Primary Distribution correct answers Cannot be purchased on margin
Competitive Bidding correct answers Method of underwriter being chosen; typically for munis
and debit - issuer chooses the firm with the lowest net cost. Always Sealed
Negotiated Underwriting correct answers Method of underwriter being chosen; typically for
equity offerings - the spread is negotiated between underwriter and issuer
Letter of intent correct answers Used for underwriting agreements; required
Underwriting agreement correct answers Signed the evening before or the morning of the
distribution & filed with the SEC
Eastern Account Agreement correct answers Signed severally and jointly (undivided)
Western Account Agreement correct answers Signed Severally but not jointly, Corporate
underwritings always western (divided)
Expenses paid by the issuer correct answers BRAP - Blue Sky Costs, Registration Fees,
Accountant Fees, Printing Costs
Issuer goes brap brap brap
Expenses paid by the underwriting syndicate correct answers SADC - Stabilization costs,
advertisting costs, Due Dilligence expenses, Counsel Fee's
Syndicate is sadC
Underwriters Compensation correct answers FCW - Finders Fee, Commisions and Discounts,
Wholesalers Fee
Intended use of proceeds correct answers NOT a factor in the pricing of an issue
Spread Components correct answers RUMSS (Reallowance, underwriters compensations,
Managers Fee, Selling Concession, Spread)
Cooling off period correct answers 20 days before the effective date - no offers of sale can be
made at this time; soliciations only with no money. Red herring preliminary prospectus may be
distributed at this time
, Green shoe correct answers The syndicate manager is allowed to overalot 15% of shares if
exceptional demand for the issue; must inform the SRO - underwriter can go back to issuer and
get more shares at POP - spread. SRO must be notified here SRO-FINRA
Issuer documents correct answers If filed with the SEC must be filed with FINRA no later than
one day later
Immediate Family Members correct answers must fit the definition AND be contributing 25% of
income to them
Stand by purchaser correct answers Someone who would be restricted AND meets all these
conditions (stand by agreement is disclosed in prospectus, agreement is written, managing
underwriter discloses in writing that hes unable to find any other purhcasers, securities are
subject to 3 month lock up period)
Member Firm Disclosure correct answers Must be disclosed at or before the time of the
transaction
Member Private Placements correct answers Member must disclose the use of offering proceed
and the offering expenses in one of the offering documents, and file these docs with FINRA at or
prior to the time the docs are provided to customers, and commit that 85% of proceeds will be
used for business purposes (excluding offering cots, commissions, incentives etc)
Spinning correct answers prohibited; when an underwriter allocates ipo shares to a director or
executive in exchange for investment banking services
The FINRA Commitee examines correct answers interstate, intrastate, regulation a offerings,
partnerships, oil and gas participation plans, mortgage and real estate investment trusts, and
rights offerings
the FINRA committee does not examine correct answers munis, open ended investments,
variable annuity contracts, straight debt issues (rated B or higher)
FINRA Commitee correct answers not evaluating the issue. Its the underwriting compensation
that is evaluated for FAIR AND REASONABLE
Interstate Offerings Documents correct answers Must file docs with FINRA commitee no later
than one business day after they are filed with the SEC
Intrastate Offerings Documents correct answers Must file docs with FINRA commitee at time of
filing with SEC and at least 15 busienss days prior to the anticipated offering datezzAW
Conflicts of Interests correct answers must be disclosed on the prospectus - include the nature of
the conflict of interest, name of the member that is the qualified independent underwriters, and a
breif statement about the role and responsibilities of the qualified underwriter
Secondary Distribution correct answers A redistribution of large block of securities held by a few
owners (insiders/institutions) - NOT secondary market. May be purchased on margin
Primary Distribution correct answers Cannot be purchased on margin
Competitive Bidding correct answers Method of underwriter being chosen; typically for munis
and debit - issuer chooses the firm with the lowest net cost. Always Sealed
Negotiated Underwriting correct answers Method of underwriter being chosen; typically for
equity offerings - the spread is negotiated between underwriter and issuer
Letter of intent correct answers Used for underwriting agreements; required
Underwriting agreement correct answers Signed the evening before or the morning of the
distribution & filed with the SEC
Eastern Account Agreement correct answers Signed severally and jointly (undivided)
Western Account Agreement correct answers Signed Severally but not jointly, Corporate
underwritings always western (divided)
Expenses paid by the issuer correct answers BRAP - Blue Sky Costs, Registration Fees,
Accountant Fees, Printing Costs
Issuer goes brap brap brap
Expenses paid by the underwriting syndicate correct answers SADC - Stabilization costs,
advertisting costs, Due Dilligence expenses, Counsel Fee's
Syndicate is sadC
Underwriters Compensation correct answers FCW - Finders Fee, Commisions and Discounts,
Wholesalers Fee
Intended use of proceeds correct answers NOT a factor in the pricing of an issue
Spread Components correct answers RUMSS (Reallowance, underwriters compensations,
Managers Fee, Selling Concession, Spread)
Cooling off period correct answers 20 days before the effective date - no offers of sale can be
made at this time; soliciations only with no money. Red herring preliminary prospectus may be
distributed at this time
, Green shoe correct answers The syndicate manager is allowed to overalot 15% of shares if
exceptional demand for the issue; must inform the SRO - underwriter can go back to issuer and
get more shares at POP - spread. SRO must be notified here SRO-FINRA
Issuer documents correct answers If filed with the SEC must be filed with FINRA no later than
one day later
Immediate Family Members correct answers must fit the definition AND be contributing 25% of
income to them
Stand by purchaser correct answers Someone who would be restricted AND meets all these
conditions (stand by agreement is disclosed in prospectus, agreement is written, managing
underwriter discloses in writing that hes unable to find any other purhcasers, securities are
subject to 3 month lock up period)
Member Firm Disclosure correct answers Must be disclosed at or before the time of the
transaction
Member Private Placements correct answers Member must disclose the use of offering proceed
and the offering expenses in one of the offering documents, and file these docs with FINRA at or
prior to the time the docs are provided to customers, and commit that 85% of proceeds will be
used for business purposes (excluding offering cots, commissions, incentives etc)
Spinning correct answers prohibited; when an underwriter allocates ipo shares to a director or
executive in exchange for investment banking services
The FINRA Commitee examines correct answers interstate, intrastate, regulation a offerings,
partnerships, oil and gas participation plans, mortgage and real estate investment trusts, and
rights offerings
the FINRA committee does not examine correct answers munis, open ended investments,
variable annuity contracts, straight debt issues (rated B or higher)
FINRA Commitee correct answers not evaluating the issue. Its the underwriting compensation
that is evaluated for FAIR AND REASONABLE
Interstate Offerings Documents correct answers Must file docs with FINRA commitee no later
than one business day after they are filed with the SEC
Intrastate Offerings Documents correct answers Must file docs with FINRA commitee at time of
filing with SEC and at least 15 busienss days prior to the anticipated offering datezzAW
Conflicts of Interests correct answers must be disclosed on the prospectus - include the nature of
the conflict of interest, name of the member that is the qualified independent underwriters, and a
breif statement about the role and responsibilities of the qualified underwriter
