Series 79- Regulations || A+ Graded Already.
§338 (including its various subsections such as §338(h)(10) of the Internal Revenue Code correct
answers permits, if all conditions are met, a stock sale to be treated as an asset sale for tax
purposes. This allows the seller the benefits of a stock sale (i.e. clean exit of the business) and
provides the buyer with potential value enhancement from the tax shield generated from the asset
step-up.
DEFM14A correct answers SEC filing code for a merger proxy. A solicitation of shareholder
votes in a business combination is initially filed under SEC Form PREM14A (preliminary
merger proxy statement) and then DEFM14A (definitive merger proxy statement).
FINRA Rule 2269 correct answers Requires written disclosure to customers of any interest in a
primary or secondary distribution of securities being offered, sold or advised for a fee. For
example, if a rep is selling a client their own securities, it is required to provide disclosure of the
conflict of interest.
FINRA Rule 5130 correct answers In a fixed price IPO, this rule prohibits certain types of sales
of shares to "restricted persons" who have beneficial interest (any economic interest, such as the
right to gains or losses).
Regulation A correct answers Permits an exemption from filing a registration statement with the
SEC for U.S. and Canadian issuers if the sum of all cash and other consideration to be received
for the securities does not exceed $5,000,000, including no more than $1,500,000 offered by all
selling security holders.
Regulation D offering may be sold to correct answers an unlimited number of investors who
meet the definition of accredited investors. However, no more than 35 non-accredited investors
may be purchasers in a Regulation D offering.
NYSE Rule 472 correct answers Prohibits members from threatening or retaliating against an
analyst for issuing an adverse, negative or unfavorable report or appearance. The firm can't
interfere in the analyst's normal work, research or communications. It can avoid including the
analyst in the road show and investor presentations, because this is not retaliation or a threat.
Rule 139 correct answers Research will not be considered an offer if the dealer distributes
research in the regular course of business and does not represent a broker dealer's initial coverage
on the issuer or its securities.
SEC Rule 145 correct answers a business combination that involves an exchange of securities
(not cash) is considered an "offer to sell" and is subject to registration requirements whether or
not a security holder takes any action to buy, sell or exchange securities.
NYSE Rule 472 correct answers To avoid being considered communications with the public, a
Webcast (presented to more than 15 people) should be password-protected, and all participants
should receive prior to the event current research supporting the analyst's opinions. Any
§338 (including its various subsections such as §338(h)(10) of the Internal Revenue Code correct
answers permits, if all conditions are met, a stock sale to be treated as an asset sale for tax
purposes. This allows the seller the benefits of a stock sale (i.e. clean exit of the business) and
provides the buyer with potential value enhancement from the tax shield generated from the asset
step-up.
DEFM14A correct answers SEC filing code for a merger proxy. A solicitation of shareholder
votes in a business combination is initially filed under SEC Form PREM14A (preliminary
merger proxy statement) and then DEFM14A (definitive merger proxy statement).
FINRA Rule 2269 correct answers Requires written disclosure to customers of any interest in a
primary or secondary distribution of securities being offered, sold or advised for a fee. For
example, if a rep is selling a client their own securities, it is required to provide disclosure of the
conflict of interest.
FINRA Rule 5130 correct answers In a fixed price IPO, this rule prohibits certain types of sales
of shares to "restricted persons" who have beneficial interest (any economic interest, such as the
right to gains or losses).
Regulation A correct answers Permits an exemption from filing a registration statement with the
SEC for U.S. and Canadian issuers if the sum of all cash and other consideration to be received
for the securities does not exceed $5,000,000, including no more than $1,500,000 offered by all
selling security holders.
Regulation D offering may be sold to correct answers an unlimited number of investors who
meet the definition of accredited investors. However, no more than 35 non-accredited investors
may be purchasers in a Regulation D offering.
NYSE Rule 472 correct answers Prohibits members from threatening or retaliating against an
analyst for issuing an adverse, negative or unfavorable report or appearance. The firm can't
interfere in the analyst's normal work, research or communications. It can avoid including the
analyst in the road show and investor presentations, because this is not retaliation or a threat.
Rule 139 correct answers Research will not be considered an offer if the dealer distributes
research in the regular course of business and does not represent a broker dealer's initial coverage
on the issuer or its securities.
SEC Rule 145 correct answers a business combination that involves an exchange of securities
(not cash) is considered an "offer to sell" and is subject to registration requirements whether or
not a security holder takes any action to buy, sell or exchange securities.
NYSE Rule 472 correct answers To avoid being considered communications with the public, a
Webcast (presented to more than 15 people) should be password-protected, and all participants
should receive prior to the event current research supporting the analyst's opinions. Any
