Issuer correct answers Any person who issues or proposes to issue any security. Mostly businesses or government entity.
Security (Determined by the Howey Case) correct answers 1. The investment of money
2. In a common enterprise (Pooling)
3. With an expectation of profits
4. Results solely...
Series 65 || with Error-free Solutions.
Issuer correct answers Any person who issues or proposes to issue any security. Mostly
businesses or government entity.
Security (Determined by the Howey Case) correct answers 1. The investment of money
2. In a common enterprise (Pooling)
3. With an expectation of profits
4. Results solely from the efforts of others
Exempted Securities correct answers 1. Any security issued or guaranteed by the US, any state,
or political subdivision.
2. Any commercial paper with maturity <= 9 months. Used to increase net working capital and
NOT for purchase of fixed assets.
3. Security issued for religious, educational, benevolent, or charitable purposes.
4. Any interest in a railroad equipment trust.
Rule 147 correct answers Exempt under federal law, but not under state
1. Security must be sold to residents of one state. Principal residence in that state.
2. for 9 months, resell must be to residents of that state.
3. 80% of issuers gross revenue from that state.
4. 80% of proceeds used in that state
5. 80% of issuers assets in that state
80-80-80 rule
Exempted Transactions correct answers Transactions by any person other than the issuer,
underwriter, or dealer
AND
Transactions by an issuer that do not involve public offering
1933 Act Protects investors correct answers requiring registration of new issues distributed
interstate
issuer to provide full and fair discolure
issuer make all material info available
regulating underwriting
criminal penalties for fraud in issuance of securities
During the cool off period, underwriters may not correct answers -take orders
-distribute sales literature or advertising material
-take indications of interest
-distribute preliminary prospectuses
-publish tombstone advertisements to provide information about the potential availability of the
securities.
, Preliminary Red Herring Prospectus correct answers used to acquaint investors with essential
facts concerning the new issue. MUST have expected number of shares, estimate of price range
per share.
CANNOT be
-confirmation of sale
-in place of a registration statement
-declare the final public offering
Final Effective Prospectus correct answers Summarizes the registration Statement. Must contain
all material facts in registration statement, but shorter.
Rule 482 Omitting Prospectus correct answers Mutual Fund Advertisements.
-any info in the advertisement must be taken from the regular prospectus
-the advertisement must state conspicuously from who prospectus may be obtained
-advertisement must urge investers to read the prospectus carefully
-past performance data must be accompanied by disclaimers
-advertisement cannot be used to purchase shares
Rule 506
506 (b)
506(c)
Form D correct answers Facilitate capital formation of small business. Securities sold in
compliance with 506 are exempt from registration.
506(b) - can sell offering to unlimited accredited investors and 35 non-accredited. No
advertising.
506(c) - Issue can be advertised.
-All purchasers are accredited.
-issuer take reasonable steps to ensure purchases are accredited.
Form D - file 15 days after first sale
SEC Rule 501 Accredited Investors correct answers -Bank, Insurance Company Registered
Investment Company
-Employee benefit plan if a bank, insurance company, or registered investment adviser, or if plan
has excess of $5 million
-Charitable organization, corporation, partnership with excess of $5 million
-Directors, Executive Officers, and General Partners of the issuer
-Person with net worth excluding primary residence exceeding $1 million
-Person with income excess of $200k or joint income with spouse of $300k for last 2 years
-entities of accredited investors
Restricted Securities
aka correct answers Unregistered securities purchased in private placement and restricted from
resale for a period of time.
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