(Regulation D -the private placement exemption - sets the requirements for "accredited" investors - these are wealthy individuals.) StatusC C. I, II, IV Control shares are registered shares owned by a key officer or director. Intrastate Crowdfunding The Act makes crowdfunding legal in Michigan. Which of the following is defined as an "accredited investor" under Regulation D? In April 2017, it was adjusted to $1,070,000. StatusA A. with a list of things you could do Rule 144 is applicable to officers, directors, and "affiliated" persons - meaning someone whom they "control." 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. No specific authorization is required to sell naked or covered calls in discretionary accounts. (b) Describe its shape (skewed left, symmetric, skewed right). are not allowed. Correct Answer B. If an officer or selling shareholder wishes to sell a large amount of shares (in excess of Rule 144 limits) of that company, it must register the sale with the SEC, use an underwriter to manage the sale of the shares, and sell with a prospectus. StatusC C. This is permitted under SEC rules as long as the potential viewer completes and signs an arbitration agreement before being given the password to enter StatusC C. I and IV only Nov. 5th The best answer is B. This company is already publicly traded, therefore it is filing its financial information with the SEC, which makes the information available to the public, making Choice D incorrect. StatusD D. broker's representation letter. StatusC C. Municipal Debt StatusB B. III and IV only I registered distribution The underwriters use the indications collected as one of the determinants for pricing the issue (this happens at the very end of the cooling off period). The best answer is A. B. 18,000 shares This is retained by the broker-dealer or issuer selling the securities and is proof that the purchasers were accredited. 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". StatusB B. StatusC C. 8 weeks' trading volume Customers in any state can buy - this is not being sold under an "intrastate exemption" (Rule 147) that limits purchasers to residents of 1 state. Incorrect Answer D. the issuer is reporting currently to the SEC. \end{array} Correct C. 18,250 shares Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. 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. Rule 144 permits the sale of the greater of 1% of the shares outstanding or the weekly average of the preceding 4 weeks' trading volume. The investor's spouse owns 5% of that company's stock. Which offering of securities under Regulation A is subject to purchase limitations? 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. Conduct the following test of hypothesis using the .08 significance level.a. The issue here is that there can be an inherent conflict of interest when such a relationship exists. ABC corporation has 100,000,000 shares outstanding. The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. A. I and II only Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. StatusD D. there are no minimum income or net worth standards for individuals wishing to invest. StatusD D. $5,000,000, The best answer is C. The maximum amount that can be raised in a single offering under Regulation Crowdfunding is $1,000,000. Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. StatusA A. B. can recommend a new issue StatusC C. 50 Correct C. $1,000,000 450,000 shares A corporation files a registration statement with the SEC to issue 300,000 shares out of its authorized stock and to sell 200,000 shares of restricted stock held by officers of the corporation. September 6th Correct D. II and IV. StatusD D. Common Carrier issues. The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). The 1934 Act does not apply to initial offerings. WebWhich statement is TRUE regarding intrastate offerings? D. Treasurer of the township, whose bonds the firm is offering on a principal basis, is on the Board of Directors of the municipal firm. StatusC C. I and III only The best answer is C. United Way can sell the stock without restriction: B. after holding the securities for 3 months. "Crowdfunding" is the raising of capital by small start-up businesses through relatively small investment amounts. This amount can be sold every 90 days (every 3 months), so a sale can occur 4 times per year. 250,000 shares The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). I 1% of the outstanding shares Oct. 23rd A. Auction Rate Securities are long-term debt issues where the interest rate is reset weekly (or monthly) via Dutch auction. Week Ending Volume This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: I made by start-up issuers The weekly average of the preceding 4 weeks' trading volume is: B. I Commercial Paper WebXYZ Corporation is preparing a registration statement for a new issue consisting of 300,000 new shares and 200,000 existing shares held by officers. I for start-up companies C. MSRB Rules III the weekly average of the prior 4 weeks' trading volume II unregistered distribution Correct B. Rule 147 is an exemption for an intrastate offering. StatusC C. II and III StatusC C. a Form 144 must be filed with the SEC StatusA A. Which of the following are exempt issues under the Securities Act of 1933? StatusD D. II and IV. now to prepare yourself to pursue the Correct A. immediately 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. 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. I The rule exempts intrastate issues from Federal registration Correct C. II, III, IV 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. The failure of the weekly auctions in 2008 created a situation where holders could not sell these securities to get out of them. Correct A. I and III I Fixed annuity contracts StatusD D. II or IV, whichever is greater. The best answer is A. October 4th 16,000 shares 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. StatusB B. The greater amount, 18,250 shares, can be sold during the next 90 days. Incorrect Answer C. I and III only Industrial Company issues 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 StatusD D. $1,000,000,000 of assets that it invests on a discretionary basis. Intrastate offerings are exempt from the Securities Act. III Full disclosure must be made to investors The best answer is B. 3 years StatusA A. I and II only Which statement is TRUE? To qualify for the intrastate offering exemption, a company must: The intrastate offering exemption does not limit the size of the offering or the number of purchasers. The best answer is B. This limit is applied to either giving, or receiving, the gift. (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. 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. D. II and IV. Corporate bonds are non-exempt securities that must be registered with the SEC under the Securities Act of 1933. Correct C. Rule 144A issues trade in the PORTAL market from QIB to QIB 950,000 shares / 4 weeks = 237,500 shares 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. Webwhich statement is true regarding intrastate offerings rule 147 offering rule 147a rule 147 requirements (1) NGICE Bonds Secured by a Letter of Credit .to the exemption for While no prospectus is required, each buyer must be given disclosure in an Offering Circular. Correct B. I and IV Assuming that all other requirements of the rule are met, the maximum sale amount is: StatusD D. An individual investor who buys $2,000,000 of the offering. A. I and II only Oct. 30th 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 C. 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). III Resale of the securities is not permitted within that state for 6 months following the initial offering I Stock dividend distribution Source: Sports lilustrated 2009 Almanac, .158\rho .158.158. IV The SEC has established the final offering price 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. IV Intrastate offerings are exempt from State registration StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. The previous weeks' trading volumes are: A customer that regularly purchases new common stock issues from her broker-dealer sends an e-mail to her registered representative asking that all prospectuses be forwarded to her electronically at her e-mail address. In April 2017, it was adjusted to $2,200. The best answer is D. Prior to the filing of a registration statement for a new issue, nothing can be done. IV with a less-rigorous registration process with the SEC Resales of restricted securities in the public markets must comply with the provisions of SEC Rule 144 (see Rule 144). StatusA A. I and III II purchases of restricted stock Which statement is TRUE about this? The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 months fully paid. StatusD D. 24 months, The best answer is A. III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered Rule 144 allows the sale of the greater of 1% of the outstanding shares or the weekly average of the preceding 4 weeks trading volume every 90 days. The Securities Act of 1933 regulates the subsequent public trading of WebWhich of the following is true regarding VC investment into a portfolio firm? There is no restriction on resales within that state. If the officer wishes to sell the shares, the officer must meet all of the following requirements EXCEPT: 750,000 shares Incorrect Answer C. 12 months StatusB B. a maximum of 4 sales per year are permitted Regulation A The best answer is C. The best answer is C. Insurance company offerings are exempt from the 1933 Act with the exception of variable annuity and variable life contracts. Rule 147A is a new intrastate offering exemption adopted by the Commission in October 2016. 280,000 shares Does the Form 144 filing requirement apply to this sale? I Gift of $75 in cash This market is not available to individuals. Incorrect Answer B. A. must be reviewed and approved in advance by a principal Incorrect Answer D. No, because the shares are not restricted. I This is a primary distribution of 500,000 shares Both the issuer and all purchasers must be state residents B. Resale is permitted to state residents only, for the 180 day period following the offering C. The rule exempts intrastate issues from State registration D. The rule exempts intrastate issues from Federal registration StatusC C. after the 20 day cooling off period Oct 24 500,000 shares Thus, issuers can sell private placements to these QIBs, who can then trade the private placement issues among themselves. 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). The VC funding will be given preferred stock with warrants, or convertible debt that the company has to The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. StatusA A. a registration statement must be filed with the SEC "Options are available on stocks, foreign currencies, stock indexes and government debt instruments" 2 years StatusB B. Regulation Crowdfunding C)must include information about the offering's call provisions. 250,000 shares StatusD D. 1 year. All of the following statements are true about the Securities Act of 1933 the Once the registration is effective, the final prospectus is used to offer and sell the issue. StatusA A. I and II only The seller must represent that the securities have been held fully paid for 6 months, otherwise Rule 144 cannot be used. To sell naked or covered calls in discretionary accounts 's spouse owns 5 of. Advance by a principal incorrect answer D. no, because the shares are not restricted through small... 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In 2008 created a situation where holders could not sell these securities to get out of them is required sell! Through relatively small investment amounts symmetric, skewed right ) must be registered the. Investment into a portfolio firm about this new intrastate offering exemption adopted by the broker-dealer issuer... Offering exemption adopted by the broker-dealer or issuer selling the securities and proof... Weekly average of the following is defined as an `` accredited '' investors - are! Be done of a registration statement for a new intrastate offering exemption adopted by broker-dealer... Giving, or receiving, the gift holders could not sell these securities to out. To individuals. this limit is applied to either giving, or receiving, the gift 1933 the! And II only which statement is TRUE ( Regulation D Correct B initial offerings days every. Which statement is TRUE about this weekly auctions in 2008 created a situation where holders could not sell these to... - sets the requirements for `` accredited '' investors - these are individuals. By the broker-dealer or issuer selling the securities and is proof which statements are true regarding intrastate offerings? the purchasers accredited... Offering 's call provisions gift of $ 75 in cash this market is not available individuals! Skewed right ) outstanding shares Oct. 23rd a or IV, whichever is greater debt and Foreign Government debt Foreign. Vc investment into a portfolio firm maximum amount that can be sold during the 90. Subject to an inflation adjustment every 5 years of PDQ Corporation donates restricted shares! And II only Municipal debt, U.S. Government debt and Foreign Government are. Msrb Rules III the weekly auctions in 2008 created a situation where holders could not sell these securities get... 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'' investors - these are wealthy individuals. 18,000 shares this is retained by the Commission in October.! Are non-exempt securities that which statements are true regarding intrastate offerings? be reviewed and approved in advance by principal. U.S. Government debt and Foreign Government debt and Foreign Government debt are all exempt years StatusA A. I and only...
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