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Series 66 > 66-9 > Flashcards

66-9 Flashcards

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Series 66 flashcards
1
Q

The Securities Act of 1933 regulates _____________.

A

new issues

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2
Q

What is the primary purpose of the Securities Act of 1933?

A

Provide investors with full and fair disclosure regarding new issues (prospectus)

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3
Q

True or False: The SEC judges an offering’s investment merit and provides approval.

A

False

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4
Q

May a preliminary prospectus (red herring) be sent during the cooling-off period?

A

yes

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5
Q

Indications of interest are _______________ on both the customer and BD.

A

non-binding

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6
Q

What should an RR do if a client sends a check to purchase securities going through the cooling-off period?

A

return the check to the customer

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7
Q

The ____________________ will not appear in a red herring.

A

final offering price

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8
Q

True or False: MSRB rules regulate the municipal activities of BDs, banks, and the employees of these institutions.

A

True

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9
Q

What is the purpose of a Tombstone Ad?

A

It calls attention to the new issuance of securities and members of the syndicate.

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10
Q

Who is responsible for the formulation and interpretation of rules for the municipal industry?

A

The MSRB

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11
Q

The Securities Exchange Act of 1934 regulates the ____________________.

A

secondary market

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12
Q

What U.S. Government agency, created by the ‘34 Act, enforces securities laws?

A

SEC

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13
Q

According to the Investment Company Act of 1940, who are considered affiliated persons of an investment company?

A

Officers/directors, members of the advisory board, employees, or owners of 5% or more of the voting stock

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14
Q

The cooling-off period for a federal securities registration is a minimum of _____ days.

A

20

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15
Q

What information will not be found in a preliminary prospectus?

A

The final public offering price and the effective date

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16
Q

The SEC may suspend trading in a security for up to _____ days.

A

10

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17
Q

The SEC may suspend trading on an exchange for up to _____ days with notification to the ____________.

A

90 days; President

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18
Q

Schedule _____ must be filed within _____ days if an investor acquires more than 5% of a publicly traded company.

A

13D; 10 days

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19
Q

May a firm advertise a hedge fund being offered through a Reg. D private placement to the general public?

A

No

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20
Q

Identify the acronym: CRD

A

Central Registration Depository

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21
Q

Identify the acronym: SRO

A

Self-Regulatory Organization

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22
Q

Identify the acronym: MSRB

A

Municipal Securities Rulemaking Board

23
Q

Identify the acronym: FINRA

A

Financial Industry Regulatory Authority

24
Q

What is Form 13F?

A

A report filed by investment managers with discretion over securities that exceed $100 million

25
Q

Define securities information processor.

A

Any entity that collects and disseminates information regarding securities quotes and trades

26
Q

Define omitting prospectus.

A

A written communication for mutual fund shares that contains limited information (less than a regular prospectus).

27
Q

May an agent sell mutual fund shares to a client after giving them an omitting prospectus?

A

Yes, as long as she offers to give the customer the standard prospectus.

28
Q

What are some of the forms that publicly traded companies must file with the SEC?

A

Registration statements, 10-K, 10-Q, 8-K, proxy statements, and possibly Schedule 13D

29
Q

List some items that may be found on an income statement?

A

Revenues, expenses, net income, or net loss

30
Q

The SEC may suspend trading in any security for up to ____ business days.

A

10

31
Q

With notification to the president, the SEC may suspend all trading on an exchange for up to ____ days.

A

90

32
Q

When must a mutual fund prospectus be delivered?

A

At or prior to the time of solicitation or when marketing materials are sent.

33
Q

What is the balance sheet equation?

A

Assets = Liabilities + Shareholders’ Equity

34
Q

How many 10-Q forms must a reporting issuer file per year?

A

Three. While 10-Q forms must be filed quarterly, a 10-K is filed at the end of the year in lieu of a fourth 10-Q.

35
Q

The SEC may suspend trading on an exchange for up to ____ days.

A

90

36
Q

If the SEC intends to suspend trading, who must receive advance notification?

A

The President, who must approve the decision

37
Q

What is the purpose of providing investors with a preliminary prospectus (red herring)?

A

To disclose information and obtain indications of interest

38
Q

True or False: Private placement offerings are exempt from registration under the Securities Act of 1933.

A

True

39
Q

True or False: An intrastate offering is exempt from registration under the Securities Act of 1933.

A

True

40
Q

True or False: Under the Securities Act of 1933, the sale of mutual fund shares is an example of an exempt transaction.

A

False. Mutual funds are generally offered to the public, sold by prospectus, and required to be registered with the SEC.

41
Q

If a mutual fund intends to advertise its performance figures, what must be deducted?

A

All management fees and expenses

42
Q

If a client owns more than 5% of a publicly traded company, what form is required to be filed with the SEC?

A

13D

43
Q

Does the Investment Company Act of 1940 consider an investment company’s legal counsel an affiliated person?

A

No. An affiliated person is an officer, director, partner, employee, or 5% or greater owner of the shares.

44
Q

Is shareholder approval required for a mutual fund’s adviser to be allowed to deviate from the fund’s investment policy?

A

yes

45
Q

What is required for a mutual fund to be allowed to use the fund’s assets to pay the costs of distributing shares?

A

Shareholder approval

46
Q

What is NOT required to be reported on an 8-K filing?

A

The location change of a subsidiary of a company

47
Q

A corporation’s financial reports are reported to the SEC each year on Form _____.

A

10-K

48
Q

According to NYSE rules, if the S&P 500 falls by 7% from the previous day’s close, trading will halt for ______ minutes.

A

15

49
Q

According to NYSE rules, if the S&P 500 falls by 13% from the previous day’s close, trading will halt for ____ minutes.

A

15

50
Q

If the S&P 500 falls by 20% from the previous day’s close, trading halts for ________________________.

A

remainder of the day

51
Q

Under Reg. D ____ is the maximum number of non-accredited investors allowed in a Private Placement.

A

35

52
Q

What must decline by a specific percentage to trigger a trading halt?

A

The S&P 500 Index

53
Q

What form is filed with the SEC to announce that a firm is filing for bankruptcy?

A

8-K

Series 66 (12 decks)

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