Business for the BD Flashcards

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1
Q

Correspondence

A

25 or fewer retail persons - Principal can approve pre- or post-distribution

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2
Q

Retail Communication (Sales Literature)

A

More than 25 retail persons - required Principal approval pre-distribution

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3
Q

OCC Disclosure Document (ODD)

A

Options Clearance Corporation - required WITHIN 15 DAYS of account APPROVAL

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4
Q

Advertisements for Derivaties

A

Approval required 10 DAYS PRIOR to first use

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5
Q

Cooling Off Period

A

“Quiet Time” - minimum of 20 days, not allowed to comment

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6
Q

What can you do during the Cooling Off Period

A

Send out a Preliminary Prospectus, Indications of Interest (IOI), and Tombstone

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7
Q

What is another name for a Preliminary Prospectus?

A

Red Herring

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8
Q

What is the difference between a Preliminary Prospectus and a Final Prospectus?

A

A Red Herring does not contain the final offering price

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9
Q

True of False: Indications of Interests (IOIs) are non-binding on some parties

A

False: Non-binding on ALL parties

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10
Q

Tombstone

A

Advertisement that discloses NO BUYING/SELLING - able to post during Cooling Off Period

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11
Q

Underwriting Agreement

A

Agreement between Issuer (Corp) and Underwriters (BD Firms)

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12
Q

Selling Group Agreement

A

Agreement between Underwriters (BD Firms) and their Selling Group Members (Clients)

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13
Q

True or False: Selling Group Members are never liable for unsold securities

A

True

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14
Q

What are the different types to Blue Sky with your State Administrator?

A

Coordination, Qualification, and Notification

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15
Q

Notice of Sale

A

Published in the Daily Bond Buyer - applicable for Municipal Bonds

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16
Q

What is the difference between what the public pays and what the Issuer receives?

A

Spread

17
Q

What are the different components (from smallest to largest) of a Spread?

A

Management Fee, Additional Takedown, Selling Concession

18
Q

Total Takedown [equation]

A

Applicable to Municipal Bonds: Additional Takedown + Selling Concession

19
Q

True or False: The Total Takedown is the single largest component of a Spread

A

False: Selling Concession
(remember: pay attention to the full question - SINGLE largest component. Total Takedown = Additional Takedown + Selling Concession)

20
Q

True or False: Municipal Bonds are exempt from registering under the ‘33 Act

A

True

21
Q

OS

A

Official Statement - the prospectus for Municipal Securities

22
Q

QIB

A

Qualified Institutional Buyer - AUM needs to be $100MM or more

23
Q

Accredited Investor

A

BDs with their Series 7 are considered Accredited Investor
Non-S7 BDs: $1MM net worth exc. primary restidence and/or making $200k/yr for the last 2 years ($300k when married and filing jointly)

24
Q

Reg D Offerings

A

Exempt from SEC Registration (‘33 Act)

25
Q

Reg A Offerings

A

Raise up to $50MM under Reg A

26
Q

Rule 147

A

Intrastate Offerings of securities - subject to 80% test of Issuer (at least 80% of holders must be in-state of offering)

27
Q

True or False: You do not have to be qualify for registration with Blue Sky of your state in order to offer under Rule 147

A

False: You must qualify for registration with Blue Sky

28
Q

How long must you hold a security in order to convert it from unregistered to registered?

A

6 months

29
Q

Rule 144A

A

QIBs are able to purchase unregistered foreign and domestic securities

30
Q

In what way are foreign securities able to be sold to US investors?

A

Via Rule 144A or as ADRs