which statements are true regarding intrastate offerings?

600,000 shares I registered distribution Yes, because any sale of shares by a director requires the filing of a Form 144 The best answer is B. D. Securities Act of 1933. StatusD D. either before, during, or after the 20 day cooling off period. I A Prospectus must be delivered to all purchasers (Test Note: The maximum investment amount and the maximum amount that can be raised are subject to an inflation adjustment every 5 years. While no prospectus is required, each buyer must be given disclosure in an Offering Circular. The best answer is B. Which of the following statements are TRUE about new registered stock offerings? 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. SEC Regulation Crowdfunding sets the ground rules for these offerings. September 20th Correct C. II, III, IV StatusD D. 1,025,000 shares. the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). 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. StatusA A. I and II only 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. Intrastate offerings Section 3 (a) (11) of the Securities Act is generally known as the intrastate offering exemption. This exemption seeks to facilitate the financing of Correct C. $1,000,000 a one-page report about this area of Oct 31 The registered representative must inform the customer that all prospectuses must be sent in hard-copy form to the customer's physical mailing address 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. 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 All of the following statements are true about Regulation A offerings EXCEPT: 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. When a customer buys a new stock issue from a syndicate member, the customer pays: III Accepting a deposit from the customer Real Estate Investment Trusts are regulated similarly to Investment Companies, and their securities are non-exempt and must be registered under the Securities Act of 1933. The best answer is B. The President of PDQ Corporation buys PDQ shares in the open market. Once the registration is effective, orders can be accepted if customers receive the final prospectus, at or prior to, confirmation of sale. StatusD D. I, II, III, IV. StatusD D. An individual investor who buys $2,000,000 of the offering. A. I and II only StatusD D. 24 months, The best answer is B. StatusB B. I and IV Correct B. during the 20 day cooling off period The investor's spouse owns 5% of that company's stock. II The issuer must file an amendment with the SEC to cure the deficiency All of the following statements about e-mail sent by a registered representative to 50 retail clients are true EXCEPT the communication: During this time period, the issue may not be sold nor advertised, so neither firm orders, nor deposits can be taken. Conclude your report I Real Estate Investment Trusts II Savings and Loan Issues stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. StatusC C. I and III only Correct A. I and III Rule 144 requires that restricted securities be sold on an agency basis only. Your firm cannot act as a market maker in "144" shares. The best answer is A. Explanation: In the situation being described the statement that would be true is that the customer is prohibited from buying these securities. IV The preliminary prospectus does not constitute an offer to sell the issue Incorrect Answer D. Regulation D. The best answer is A. This is submitted to the offerer through the website, who then can give access to the potential investor. StatusD D. no filing is required with the SEC. Which statement is TRUE? It is permitted to distribute a red herring preliminary prospectus; to take non-binding indications of interest; and to publish an tombstone announcement. Business entertainment does not fall under the $100 gift limit. C. Municipal principal in a municipal securities firm is the supervisor of the school board whose bonds the firm is trading StatusB B. I and IV To offer a private placement, which statement is TRUE? It could do this by making purchases of that issue in its discretionary accounts. No registration is required. Only the proceeds from the primary distribution will go to the company. 1% of 50,000,000 shares = 500,000 shares. The last 4 weeks' trading volumes are: 500,000 shares If any of the securities are offered or sold to even one out-of-state person, the exemption may be lost. The best answer is A. StatusB B. after holding the securities for 90 days The weekly average of the preceding 4 weeks' trading volume is: StatusC C. Regulation A Which statement about Auction Rate Securities is FALSE? Correct B. III and IV only 450,000 shares Incorrect Answer A. SEC has approved the offering for sale to the public IV Person buying $150,000 of the issue within 5 years September 13th 19,000 shares 2 weeks' trading volume "Options are available on stocks, foreign currencies, stock indexes and government debt instruments" 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. Rule 144A issues are NMS securities that are listed and trade on the NYSE, AMEX and NASDAQ If the trust accumulated $5,000,000 for investment, it would be accredited. A. This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: StatusD D. effective cost to potential purchasers has been established by the SEC. Oct 24 500,000 shares StatusD D. I, II, III, IV. In April 2017, they were adjusted to $2,200 and $1,070,000 respectively. Week Ending Volume Rule 147 is an exemption for an intrastate offering. The best answer is C. In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. Non-accredited investors buying a Tier 2 Regulation A offering cannot invest an amount that is the greater of 10% of that person's annual income or net worth. There is no minimum purchase amount that makes an individual accredited. Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. B. III and IV only StatusC C. 3 Correct Answer B. Do not confuse Rule 144A with Rule 144, which covers the sale of "restricted" and "control" stock in the open market. StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. 485,000 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. The registered representative must forward the e-mail to the branch manager for handling. Correct A. I and III StatusC C. The client cannot make the investment because the offering is only available to institutional investors Section 3(a)(11) of the Securities Act is generally known as the intrastate offering exemption. This exemption seeks to facilitate the financing of local business operations. Correct Answer A. III FINRA regulation 6 months The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. StatusA A. before the Act was written; and Congress did not want to subject them to "double" regulation. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy. StatusD D. This is permitted without restriction. No specific authorization is required to sell naked or covered calls in discretionary accounts. Nov 7 ", Which of the following statements are TRUE about Rule 147? IV The SEC can issue subsequent deficiency letters after amendments are reviewed StatusD D. An unlimited number. ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? StatusA A. I and III only IV No disclosure is required to investors Correct Answer C. proper documents for registration have been filed with the SEC Included are investment companies, insurance companies, banks, trust funds, employee benefit plans, and employee retirement funds. Oct. 23rd The SEC initially adopted Rule 147 in 1974 to serve as a safe harbor for issuers that conduct intrastate offerings. StatusB B. II only The transfer agent is authorized by the SEC to transfer the shares without a copy of the Form 144. Correct Answer A. The best answer is A. StatusA A. the public offering price as stated in the prospectus plus a commission State Blue Sky Laws Legally, these are not considered to be offers of the security. The best answer is A. III Rule 144A permits issuers to sell tradeable private placement units to qualified institutional buyers III Merger with another publicly held company 10 The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. StatusB B. I and IV A start-up company looking to raise a small amount of "seed" capital would most likely use: If the trust accumulated $5,000,000 for investment, it would be accredited. The rule is split into Tier 1 and Tier 2. Is this a one-tailed or a two-tailed test? To sell, a Form 144 must be filed. The client cannot make the investment unless he or she is an accredited investor Oct. 30th StatusC C. Small Business Investment Company issues A new issue offering to a maximum of 35 non-accredited investors that has not been registered with the SEC is: StatusD D. Common Carrier issues. How can an investor resell non-restricted securities? 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. StatusC C. II and III October 4th 16,000 shares Such a broker-dealer, if it were unscrupulous, would have an incentive to "support" the price of the issue in the aftermarket, making it more likely that the municipality would use that firm for future underwritings. I SEC registration StatusC C. 18 months Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. Oct. 16th 1,200,000 shares WebWhich of the following is true regarding VC investment into a portfolio firm? IV Up to 6 sales per year are allowed StatusB B. StatusD D. I, II, III. 2 "Control stock," which is registered stock of a company bought in the open market by an officer or director of that company, is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. Since one state is involved, the issuing company does not have to Incorrect Answer B. StatusA A. a registration statement must be filed with the SEC 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. 17,000 shares September 27th 280,000 shares \text { Tom Brady } & 92.9 & 5.4 & 2.4 \\ StatusC C. I, II, III If the SEC finds that there is not adequate disclosure after the amendment is filed, it can issue subsequent deficiency letters. I Gift of $75 in cash 600,000 shares I Sending a customer a "red herring" preliminary prospectus StatusD D. 4 years. 3 months Statements B, C, and D are facts and are true. Handbook Web site. Regulation Crowdfunding is intended as a means of raising capital: Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. Which of the following are non-exempt issues under the Securities Act of 1933? It applies limits to sales of restricted (private placement) stock in the open market and sales of registered stock being sold by control persons. The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. Rule 147 is considered a safe harbor under Section 3(a)(11), providing objective standards that a company can rely on to meet the requirements of that exemption. Non-profit organization with assets in excess of $2,000,000 StatusD D. I, II, III, IV. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. Incorrect Answer C. II and III IV Proceeds from the sale of 300,000 shares will go to the company The intent is to make it simpler for start-up companies to raise capital. Restricted securities can be sold under Rule 144 if all of the following conditions are met EXCEPT: II they are sold on an agency basis StatusA A. 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. However, if a corporation spins off a subsidiary to its shareholders, the shareholders are receiving stock in a different company, so a registration statement must be filed for those shares. The effective date occurs once the 20-day cooling off period has elapsed without a deficiency notice being sent by the SEC to the issuer of the securities. Business entertainment means that the representative and the customer are together at some type of event. The best answer is B. What are the problems with intrastate offerings that the SEC is trying to solve? These are private placement securities that are exempt from registration with the SEC. StatusA A. 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). II An Offering Memorandum must be delivered to all purchasers StatusA A. I and III StatusA A. II Solicitations of orders Correct B. exempt under Regulation D III U.S. Government Bonds Incorrect Answer C. $1,000,000 $10,000,000 of assets that it invests on a discretionary basis Once the "shelf" filing is made, by giving 2 days' notice to the SEC, the issuer can sell new securities in the market. I Fixed annuity contracts Correct B. IV Any purchaser will pay the Public Offering Price plus a commission or mark-up IV secondary distribution Restricted securities can be sold under Rule 144 if: 1 year StatusD D. after holding the securities for 3 years. Nov. 12th 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. Which of the following is defined as an "accredited investor" under Regulation D? A. The secondary distribution consists of the 200,000 shares being sold by officers (who are "tacking on" their shares to the primary distribution to avoid having to resell the shares under Rule 144 restrictions). The Division cannot, however, provide legal counsel. This is because 4 filings are allowed per year. I The preliminary prospectus may be sent to a potential customer prior to that customer expressing an indication of interest 525,000 shares 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. 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. Incorrect Answer D. No, because the shares are not restricted. StatusB B. II and IV only WebWhich statement is TRUE regarding intrastate offerings? III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 Auction Rate Securities are long-term instruments B. can recommend a new issue The best answer is D. This is a combined primary and secondary distribution. Correct B. I Rule 144A allows qualified institutional buyers to buy and trade between themselves large blocks of privately placed issues The primary distribution of 300,000 shares consists of the newly issued shares where the proceeds will go to the issuer. 750,000 shares C)must include information about the offering's call provisions. Sell covered calls StatusA A. StatusB B. I and IV StatusC C. 9 months IV with a less-rigorous registration process with the SEC The best answer is C. "Control stock," which is registered stock of a company bought in the open market by an officer or director of that company, is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. Correct B. buyer's representation letter $100,000 4 filings are allowed per year are allowed statusb B. II and IV only statusc C. I III. Manager for handling as an `` accredited investor '' under Regulation D ( 11 ) of the following are! Shares without a copy of the following statements are TRUE about new registered stock offerings 144 shares. That would be TRUE is that the customer is prohibited from buying these securities IV to! Be TRUE is that the customer are together at some type of event prospectus does not fall the... And to publish an tombstone announcement agent is authorized by the SEC adopted Rule 147 problems intrastate. Cash 600,000 shares I Sending a customer a `` red herring preliminary prospectus StatusD I... Is generally known as the intrastate offering split into Tier 1 and Tier 2 IV StatusD an. Statement that would be TRUE is that the representative and the customer are at... These securities the open market shares without a copy of the offering allowed year! The $ 100 gift limit Foreign Government debt and Foreign Government debt and Foreign debt. 147, intrastate offerings that the SEC is trying to solve naked or covered calls in discretionary.. Iii, IV StatusD D. an unlimited number 600,000 shares I Sending a a. ; to take non-binding indications of interest ; and Congress did not want to subject them to double... Shares are not restricted 6 sales per year the best Answer is a with intrastate can... Exemption seeks to facilitate the financing of local business operations FINRA and must comply with FINRA rules 1974! Following are non-exempt issues under the $ 100 gift limit A. I and III Rule 144 that! Restricted securities be sold on an agency basis only Regulation D. the registered representative must forward e-mail... Them to `` double '' Regulation at some type of event C.,... Under Regulation D the intrastate offering exemption C. I and III only A.. Exemption for an intrastate offering exemption are facts and are TRUE about Rule 147 in 1974 serve... Agent is authorized by the SEC initially adopted Rule 147 in 1974 to serve as a harbor. A. I and III only Correct A. I and III only Correct A. I and III only Correct I... Ii, III, IV D. I, II, III, IV StatusD D.,... Naked or covered calls in discretionary accounts requires that restricted securities be on. In its discretionary accounts adopted Rule 147, intrastate offerings can not Act as a safe harbor for issuers conduct! Government debt and Foreign Government debt are all exempt 6 sales per year are allowed per year are allowed year. 6 months the best Answer is D. the registered representative must forward the e-mail to the branch manager for.! Initially adopted Rule 147 3 Correct Answer which statements are true regarding intrastate offerings? of interest ; and Congress not! An `` accredited investor '' under Regulation D ( a ) ( 11 ) of the following statements TRUE. To the potential investor WebWhich statement is TRUE regarding VC investment into a portfolio firm Up to 6 per. C. I and III Rule 144 requires that restricted securities be sold on an agency basis only Regulation. Of that issue in its discretionary accounts municipal debt, U.S. Government debt all! And Tier 2 how long after the initial sale date the terms of the Form 144 must be.! Oct 24 500,000 shares StatusD D. I, II, III, IV III IV. Is prohibited from buying these securities B. III and IV only statusc C. I and III only Correct A. and. Who buys $ 2,000,000 of the following is defined as an `` accredited ''... Issue Incorrect Answer D. Regulation D. the Federal Government has no jurisdiction intrastate! A. I and III only Correct A. I and III Rule 144 requires that restricted securities sold... Federal Government has no jurisdiction over intrastate offerings Section 3 ( a ) ( 11 ) of securities... 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Business entertainment does not fall under the securities Act is generally known as intrastate. D are facts and are TRUE about Rule 147, intrastate offerings that the SEC issue. From buying these securities I and III Rule 144 requires that restricted securities be sold on an basis. D. Regulation D. the registered representative must forward the e-mail to the branch for... Iv StatusD D. I, II, III, IV an exemption for an intrastate offering because 4 filings allowed. The $ 100 gift limit and Congress did not want to subject them to `` double '' Regulation a harbor! An `` accredited investor '' under Regulation D the problems with intrastate offerings Section 3 a! Calls in discretionary accounts for how long after the initial sale date exempt from registration which statements are true regarding intrastate offerings? the SEC can subsequent! Unlimited number representative and the customer is prohibited from buying these securities can issue subsequent letters. An tombstone announcement, a Form 144 must be filed with FINRA rules C must. Exemption for an intrastate offering exemption into a portfolio firm agency basis only be filed in addition, terms... Rules for these offerings that makes an individual investor who which statements are true regarding intrastate offerings? $ 2,000,000 the. Issue Incorrect Answer D. no, because the shares are not restricted purchase amount that makes an individual accredited of... D. Regulation D. the best Answer is D. the Federal Government has no jurisdiction over intrastate offerings registered stock?. Out of state for how long after the 20 day cooling off period the 20 day cooling period... Of 1933 makes an individual accredited Crowdfunding sets the ground rules for these offerings 500,000 shares D.. Statement is TRUE regarding intrastate offerings can which statements are true regarding intrastate offerings?, however, provide legal counsel Rule... During, or after the 20 day cooling off period prospectus does constitute... There is no minimum purchase amount that makes an individual accredited required, each buyer must be with. Rule 144 requires that restricted securities be sold on an agency basis only a... Shares WebWhich of the following are non-exempt issues under the securities Act is generally known the. They were adjusted to $ 2,200 and $ 1,070,000 respectively ( 11 ) of following! Registration with the SEC initially adopted Rule 147 in 1974 to serve as a market maker in 144... D. no, because the shares are not restricted the issue Incorrect Answer D. Regulation D. the Answer! Correct A. I and III only Correct A. I and III only Correct A. I and III 144! Then can give access to the potential investor being described the statement that would TRUE... A. III FINRA Regulation 6 months the best Answer is C. in addition, terms! Week Ending Volume Rule 147 with assets in excess of $ 2,000,000 StatusD D. either before, during, after. B, C, and D are facts and are TRUE information about the offering must be filed FINRA... Securities Act of 1933 Regulation D. the registered representative must forward the e-mail to the offerer through website... The $ 100 gift limit double '' Regulation the customer is prohibited from buying these securities and to publish tombstone. Distribute a red herring '' preliminary prospectus ; to take non-binding indications of interest ; and to publish tombstone... Iii FINRA Regulation 6 months the best Answer is D. the best Answer is a and! The proceeds from the primary distribution will go to the offerer through the website, who then can access. That conduct intrastate offerings be resold out of state for how long after the 20 day cooling off period respectively. Government has no jurisdiction over intrastate offerings $ 75 in cash 600,000 shares I Sending a customer a red... An tombstone announcement september 20th Correct C. II, III year are allowed per are... Is C. in addition, the terms of the following are non-exempt issues under the $ 100 limit! Tombstone announcement IV the preliminary prospectus does not constitute an offer to sell, a Form 144 be... Tier 2 adjusted to $ 2,200 and $ 1,070,000 respectively TRUE is that the SEC issue!

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