An officer of ABC wishes to sell ABC stock on November 15th under Rule 144. Tier 1 gives an "E-Z" registration process to offerings of no more than $20 million in a 12 month period. Scores on an accounting exam ranged from 42 to 96 , with quartiles Q1=61,Q2=77Q_1=61, Q_2=77Q1=61,Q2=77, and Q3=85Q_3=85Q3=85. Correct A. I and III Correct D. II and IV. IV The issuer avoids the 20 day cooling off period and is allowed to issue the securities 2 business days after filing I Stock dividend distribution ARSs are available from both corporate and municipal issuers. StatusA A. I and III September 27th 200,000 shares III primary distribution Incorrect Answer C. 12 months The registration statement must be amended, and the 20 day cooling off period starts recounting from the date of the amendment filing. Under Rule 144, the Form 144 is filed: 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 b. While no prospectus is required, each buyer must be given disclosure in an Offering Circular. StatusB B. StatusB B. I and IV StatusD D. I, II, III, IV, Which of the following statements are TRUE regarding Rule 144A? \text { Kurt Warner } & 93.2 & 5.1 & 3.4 \\ StatusD D. no filing is required with the SEC. The prior weeks' trading volumes are: 1 September 6th II unregistered distribution II they are sold on an agency basis It requires the registration of broker-dealers and self-regulatory organizations (the exchanges). It simply notifies the SEC that the issue is being offered in compliance with the exemption. (Test Note: The investment minimum and maximum amount that can be raised are subject to an inflation adjustment every 5 years. 250,000 shares Q2. The best answer is C. Rule 144A issues are private placement securities sold in minimum $500,000 blocks only to QIBs - Qualified Institutional Buyers (institutions with at least $100MM of assets available for investment). The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. 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. StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus An investor wishes to sell restricted stock under the provisions of Rule 144. I Real Estate Investment Trusts StatusA A. I only Under the 1933 Act, U.S. Government securities are exempt and are not required to be registered with the SEC, nor are they required to be sold with a prospectus. Regulation A is intended to make it easier for start-up companies to raise capital. Webthe registration of non-exempt new issue offerings in each State where the security will be sold. ADRs are the way that most foreign corporate issues trade in the United States. Regulation A is intended to make it easier for smaller issuers to raise capital. IV Rule 144A permits issuers to sell tradeable private placement units to individual investors trading occurs in the secondary marketD. StatusA A. Correct C. $1,000,000 Correct Answer B. Nov. 5th StatusA A. I and II On November 23rd, an officer of MNO Corporation wishes to sell stock under Rule 144. Correct A. immediately III Proceeds from the sale of 500,000 shares will go to the company This offering is a(n): StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. 2 years StatusA A. I and III Whereas normal private placements cannot be traded, these can be traded from QIB to QIB. Correct A. StatusB B. III and IV only The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. StatusD D. I, II, III, IV. Since the shares are being offered at the current market price of the stock, Choice B is false. Correct A. I and III The last 4 weeks' trading volumes are: (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. However, the issue is still subject to state (blue-sky) registration. Correct C. Regulation A Anyone can purchase a Regulation A offering, however the amount that can be purchased of a Tier 2 offering by a non-accredited investor (basically, a person who is not wealthy) is limited to the greater of 10% of that person's annual income or net worth. A. I and II only IV The SEC can issue subsequent deficiency letters after amendments are reviewed It is only available to "seasoned" companies that already have completed a registered IPO, that have been registered for 1 year, and that have a minimum market captialization of $75 million. Business entertainment does not fall under the $100 gift limit. a. The interest rate on an Auction Rate Security is reset weekly or monthly The best answer is C. These are wealthy individuals and institutional investors. Other investment companies - whether they be open-end or closed-end management companies; or unit investment trusts; are non-exempt and must be registered with the SEC. WebIntrastate Crowdfunding (RCW 21.20.880 to .886) Federal Covered Securities Federal covered securities are securities that are preempted from state registration by Section 18 (b) (4) of the Securities Act of 1933. In reality, private placements are sold to a relatively small number of institutional investors. 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 Correct Answer C. 250,000 shares 3.The names of columns in all SELECT statements must be identical. Conclude your report Only the proceeds from the primary distribution will go to the company. Such "QIBs" can buy unregistered private placement blocks and trade them with other "QIBs. Week Ending Volume a one-page report about this area of I Any purchaser who received a preliminary prospectus must also receive the final prospectus \text { Peyton Manning } & 94.7 & 5.7 & 2.8 \\ 6 months These do not have to complete the 6 month holding period requirement because they are registered, but to sell them, the officer must file a Form 144 Notice of Sale and is subject to the rule's volume restrictions. Oct. 23rd Correct B. The best answer is D. Since this issue is "in registration," it is in the 20-day cooling off period. Rule 144 is applicable to officers, directors, and "affiliated" persons - meaning someone whom they "control." The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. One is not accredited because a large purchase of the private placement is made. StatusA A. exempt under Regulation A II 10% of the outstanding shares Incorrect Answer A. The rule allows the greater of 1% of the outstanding shares or the weekly trading average of the last 4 weeks to be sold under the filing. A. 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. Which of the following statements are TRUE regarding Rule 144A? III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers The best answer is B. Correct B. Thus, the registration for the issue may never "go effective. II Resale of the securities is permitted outside that state immediately following the initial offering StatusA A. a registration statement must be filed with the SEC Correct C. II, III, IV 12 months Determine the least-squares regression line for estimating the passer rating based on the percentage of passes that were touchdowns. StatusC C. II or III, whichever is greater StatusB B. I and IV a. Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push up the stock price). Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. Once the amendment is filed, the 20-day cooling off period starts counting again from the beginning. The registered representative must inform the customer that all prospectuses must be sent in hard-copy form to the customer's physical mailing address WebWhich statement is TRUE regarding intrastate offerings? Resales of restricted securities in the public markets must comply with the provisions of SEC Rule 144 (see Rule 144). Additional commissions or charges above the P.O.P. IV A bank or savings and loan institution 500,000 shares A small investor with $2,000 of available funds wishes to make a crowdfunding investment. 3,000,000 shares / 4 weeks = 750,000 share average The best answer is C. Rule 144A allows issuers to sell minimum $500,000 units of private placements to so-called "QIBs" - Qualified Institutional Buyers; and these QIBs can trade the units with other QIBs. Correct Answer B. the amount of stock held by the selling shareholders was restricted and was too large an amount to sell under the provisions of Rule 144 Essentially Intrastate crowdfunding simply means, crowdfunding that occurs entirely within a single state can be governed by the rules of that state (i.e. Which of the following securities are NOT required to be registered with the SEC? To effect Rule 144 transactions, certain representations are required to ensure that the sale is not being made in contravention of the rule. StatusC C. 506,250 shares the effective date of the issue is unaffected by the deficiency notice An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investor For the exam, know the base amounts and the fact that they are indexed for inflation periodically. StatusB B. Which of the following are exempt issues under the Securities Act of 1933? StatusB B. I and IV Rule 147 is an exemption for an intrastate offering. 35 Q Correct C. sales are limited to purchasers who are "resident" in the state where the issuer resides 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. September 27th 18,000 shares 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. II and IV. B. I and IV Intrastate Offerings Defined An intrastate offering can only be purchased in the state it is issued. The best answer is B. (Test Note: The maximum investment amount and the maximum amount that can be raised are subject to an inflation adjustment every 5 years. The best answer is A. Why do you think JCB chose to enter India via a joint venture, as opposed to some other entry mode? Telecommunication 47 CFR Section 64.604. B. WebAll of the following statements are true about Rule 147 EXCEPT: A. II. Rule 147 is an exemption for an intrastate offering. The seller must represent that the securities have been held fully paid for 6 months, otherwise Rule 144 cannot be used. I This is a primary distribution of 500,000 shares StatusD D. Rule 144. A. I and II only Intrastate offerings are exempt from: The shares can be sold: Correct B. II only Tier 2 offerings Your firm cannot act as a market maker in "144" shares. Correct Answer C. the stock must be held for 6 months, fully paid StatusA A. Week Ending Volume Correct B. I, II, III 490,000 shares Once the registration is effective, the final prospectus is used to offer and sell the issue. Assuming that all other requirements of the rule are met, the maximum sale amount is: I A Prospectus must be delivered to all purchasers Regulation A \text { Player } & \text { Rating } & \text { TD } \% & \text { Inter } \% \\ Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. If a control relationship exists between a brokerage firm and the municipal security being recommended, this security cannot be purchased in discretionary accounts unless the specific authorization of the customer is obtained first. 485,000 shares 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. 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 focus of the rule is to require that there be current public information regarding a company. StatusD D. II and IV. II The issuer must file an amendment with the SEC to cure the deficiency StatusB B. after holding the securities for 90 days D. I, II, III, IV. The sample mean is 2.59. 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. During this time period, the issue may not be sold nor advertised, so neither firm orders, nor deposits can be taken. But the rule disallows this if the trust is formed for the purpose of buying the private placement! This offering is a(n): To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. For the National Football League, ratings for the all-time leading passers were as shown below. Oct. 30th Correct Answer B. The best answer is A. now to prepare yourself to pursue the III The SEC has approved the offering for sale to the public Incorrect Answer A. subscription agreement October 4th 16,000 shares WebWhich statements are TRUE regarding intrastate offerings? IV Gift of baseball tickets with a value of $150 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. Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. Rule 144A Incorrect Answer B. Intrastate offerings are exempt from Federal The firm has more than 300 lawyers and other professionals practising in New York, New York; Washington, DC; Los Angeles and San Diego, California; Chicago, Illinois; Stamford, Connecticut; Parsippany, New Jersey; and Houston, Texas. StatusB B. III and IV An unaffiliated investor wishes to sell a large amount of "144" shares. Without the exemption, the company would be in violation of the Securities Act if the offering does not qualify for another exemption. I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues 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. II Any purchaser who received a preliminary prospectus need not receive the final prospectus StatusD D. I, II, III, IV. G. Federal Rule 147 Intrastate Offerings persons11 with access to the information that would be included in a registration statement. A maximum of 35 non-accredited investors are permitted in a private placement for the transaction to be exempt under the Securities Act of 1933. Which statement is TRUE? 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. Common carrier issues such as railway issues are exempt under the Securities Act of 1933 because they were regulated by the Interstate Commerce Commission (I.C.C.) I Individual earning $200,000 per year ADRs are the way that most foreign corporate issues trade in the United States. StatusD D. II or IV, whichever is greater. Restricted securities can be sold under Rule 144 if: Legally, these are not considered to be offers of the security. are not allowed. 500,000 shares To obtain the 147 exemption, both the issuer and the purchaser must be state residents. Correct D. None of the above. 220,000 shares $100,000 The best answer is A. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. B. September 13th 19,000 shares The SEC encourages the use of the internet and permits private placements under Regulation D to be offered via the web. III Recommending the purchase of the issue Correct D. II and IV. Which of the following is an exempt security under the Securities Act of 1933? 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. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered WebThe Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company.b. Week Ending Volume Regulation D permits a private placement to be sold to a maximum of 35 non-accredited investors and an unlimited number of accredited (wealthy and institutional) investors. When the Securities and Exchange Commission sets the effective date for a new issue in registration, this means that the: StatusD D. I, II, III. Which statements are TRUE? The issue here is that there can be an inherent conflict of interest when such a relationship exists. In addition, a company must comply with state securities laws and regulations in the states in which securities are offered or sold. StatusD D. 4 years. IV The SEC has established the final offering price III sales of control stock Which statements are TRUE? If the Form 144 is filed today, the maximum sale is: If the Form 144 had been filed the preceding week, the maximum permitted sale is: The best answer is A. StatusC C. after the 20 day cooling off period Incorrect Answer C. I and III only StatusA A. job category securities, commodities, Thereafter, they can be resold interstate. 35 The best answer is B. Thus, issuers have a way of selling securities to these investors quickly without incurring the costs of SEC registration; and the QIB knows that it can always sell that investment to another QIB without needing to register the issue with the SEC. StatusC C. II and III 4 filings are allowed per year. The issuer must represent that the corporation is current with all required SEC filings because it is prohibited to use Rule 144 to sell if this is not the case. The only way to resell them is in a "private transaction.". StatusC C. I, II, IV Correct A. StatusC C. II and III Does the Form 144 filing requirement apply to this sale? I The SEC has certified that the offering documents give full and fair disclosure II Treasury Bills 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. In registration, '' it is in a private placement for the purpose of buying the private blocks! 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