3 Laws

Question 1

Securities Act 1933

(3)

Answer 1

1. truth in securities
2. prospectus before $
3. reg cool off 20 days no advertising

Question 2

Exempt Issures from

Sec Act 1933

Answer 2

govt

bank

chartitable org

sec maturing in < 270 days

Question 3

Sec Act 1933

Exempt Transactions

Reg A

Rule 147

Reg D

Which investors

Answer 3

small offering

Question 4

Sec Act 1933

Exempt Transactions

Reg A

Rule 147

Reg D

Which investors

Answer 4

sell to only state residents

80% of assets there

buters can’t sell to non-resident for 9 months

Question 5

Sec Act 1933

Exempt Transactions

Reg A

Rule 147

Reg D

Which investors

Answer 5

private placement

35 or less non-accredited investors

hold stock 1 year before selling

Question 6

Sec Act 1933

Exempt Transactions

Reg A

Rule 147

Reg D

Which investors

Answer 6

sophisticated

Question 7

Securities Exchange 1934

(3)

Answer 7

1. broader in scope
2. creates SEC - Securities Exchange Commission
3. register & regulate
   
   • brokerage firms
   • transfer agents
   • clearing agencies
   • SROs (FINRA)
   • exchanges

Question 8

Trust Indenture 1939

what products must comply

Answer 8

public bonds

trust indentures

Question 9

Investment Co Act 1940

who must reg (5)

Answer 9

1. invest co must reg - # shareholders > 100
2. certificate companies
3. UIT
4. Mgmt Co
5. Seperate Acct for Var Annuity

Question 10

Investment Advisor Act 1940

applies to / who must register

Answer 10

FA w/ 100MM in assets

or

advise reg inv co

Question 11

ERISA

inforced by

Answer 11

EE Ret Income Security Act

DOL

Question 12

Defined Benefit Plans

Answer 12

promises to pay predetermined $ to retirees

Question 13

EE invested in Co. stock

plan may not aquire ER sec or real estate that exceeds

what value of plan assets?

Answer 13

10%

Question 14

FINRA bylaws

1. rules of fair practice
2. uniform practice code
3. code of procedure
4. code of arbitration

Answer 14

1. how to deal w/ customers
2. settlement dates & delivery
3. conduct violations
4. disputes among members

Question 15

Rules for firm to join FINRA

(4)

Answer 15

1. meet capital requirements
2. 2 principals supervising
3. business plan
4. attend pre-membership interview