Ch 2 Deck 14 Flashcards
Nasdaq listing requirements include:
-minimum share price
-minimum market capitalization
–minimum number of market makers
–minimum number of shareholders
Nasdaq listing requirements do not include:
minimum price/book ratio
electronic quotation system that provides information on OTC equity securities that are not listed or traded on the NASDAQ or any other national securities exchange
The OTC Bulletin Board (OTCBB)
OTCBB provides quotes on
–Non-listed equity securities
–Non-listed ADRs
–Non-listed Warrants
–Non-listed DPPs
Minimum listing requirements for OTCBB
–Submit reports to the SEC
–Minimum number of stockholders holding a specified number of shares
–At least one market maker submit Form 211 to FINRA
In a secondary offering who sells to the public
major shareholders
In a negotiated offering, issuer starts by
choosing an underwriter with whom they will then negotiate terms
Most common form of underwriting for corporate underwriting
Negotiated offerings
information to make an investment decision is called
material information
Best efforts underwriting commitment is also called
contingency offering
Mini-max offerings are sometimes called
part or none offerings
Syndicate accounts must be closed within 90 days of
syndicate settlement date
date that securities are delivered to underwriters to be sold
syndicate settlement date
no later than the final settlement each member of selling syndicate must receive
an itemized statement of syndicate expenses
syndicate expenses are considered
underwriting expenses
Under the corporate financing rule, a FINRA member may not join with a non-member in
any syndicate, selling group or joint account for the distribution of securities
Under corporate financing rule, a syndicate cannot include
suspended members
if a selling group member is suspended during a distribution
they may still sell shares but must purchase them at full price rather than at the discount
Can the syndicate include foreign member that are not eligible to be FINRA members?
Yes (really)
Under the corporate financing rule selling concessions cannot go to
a bank or a trust
Under the corporate financing rule underwriters fees must be
fair and reasonable
Under the corporate financing rule, for an offering filing with the SEC or state securities commission, underwriting agreements must be submitted to FINRA
no later than 1 business day after filing with SEC or state securities commission
Under the corporate financing rule, for an offering not filing with a regulatory agency, underwriting agreements must be submitted to FINRA
at least 15 business days prior to the anticipated offering date
The FINRA review on the fairness of underwriting fees will not
pass judgment on the merits of the securities
In a review of the fairness of underwriting fees, FINRA will render a
“No objection” opinion
These are considered underwriting compensation
(must memorize this list) Discounts/commissions Reimbursements Finders fees Advisory fees Attorneys fees(excluding blue-sky fees) Securities (common and preferred stock, options, warrants, debt securities) Fees of a qualified independent underwriter
These are not considered underwriting compensation
(must memorize this list) Expenses borne by the issuer Registration fees(issuers fees) Blue-sky fees Printing fees Accountants fees
