Ch 2 Deck 19 Flashcards
Reg D issuers file with
the SEC
Reg D issuers file on form
D
Reg D issuers file on form D within
15 days of the first sale
Reg D issuers can sell before
they file anything (file Form D 15 days after)
Rule 2730 prevents FINRA members in a fixed price offering from arranging the purchase of shares taken in trade from a customer
as payment for securities purchased by the customer
The exception to Rule 2730 restriction on FINRA members purchasing taken in trade shares as payment for securities purchased by the customer is
if securities taken in trade are purchased at price no higher than fair market price
Under FINRA rule 5121, member firm with conflict using QIU exemption must disclose
name and role of QIU
Under FINRA rule 5121, member firm with conflict using can use QIU exemption if QIU prepares
registration and prospectus
Under FINRA rule 5121, member firm with conflict using can use QIU exemption if QIU assists in
distribution
In order to make a member private offering firm must provide
PPM or term sheet to each investor with disclosures
In order to make a member private offering firm must file
PPM with FINRA prior to giving to investors
One option for getting around FINRA rule 5121 prohibiting participation in public offering by firm with conflict is securing participation of
a QIU in offering
One option for getting around FINRA rule 5121 prohibiting participation in public offering by firm with conflict is if the member firm primarily responsible
does not have a conflict or affiliation with conflicted firm
One option for getting around FINRA rule 5121 prohibiting participation in public offering by firm with conflict is if the offered securities are either
exchange listed or
investment grade rated
Minimum OTCBB listing requirements include submitting
reports to the SEC
Minimum OTCBB listing requirements include minimum number of
stockholders
Minimum OTCBB listing requirements include the minimum number of stockholders holding a minimum
number of shares
Minimum OTCBB listing requirements include at least one
market maker
Minimum OTCBB listing requirements include submitting form
211
Minimum OTCBB listing requirements include submitting form 211 to
FINRA
Rule 415(a) imposes 3 year time limitation on shelf offerings that are debt offerings backed by
mortgages
Rule 415(a) imposes 3 year time limitation on shelf offerings that are continuous
offerings of more than 30 days
Rule 415(a) imposes 3 year time limitation on shelf offerings that are by this type of issuer
S-3/F-3 Issuers
Rule 14d-10 equal treatment of security holders: tender offer must be open to all
security holders of the class
Rule 14d-10 equal treatment of security holders: in tender offers the consideration paid to any security holder is
the highest consideration paid to any other security holder
Rule 144 control securities are securities
held by an affiliate of the issuer
Rule 144 Affiliate definition is
one who is controlled by issuer or controls the issuer
FWP must include legend saying that a
registration statement has been filed
FWP must include a legend telling where
a copy of the preliminary prospectus may be obtained
Option 1/2 for qualifying as a WKSI is a worldwide
public float of $700M
Option 1/2 for qualifying as a WKSI is a worldwide public float of 700M in
common equity
Public float is
equity not held by affiliates
accredited investors include corporations, trusts and partnerships with
more than $5M in assets
Accredited investors include large
institutional investors
Accredited investors include people associated with issuer including
issuer’s directors, officers, general partners
Accredited investors include any firm where all
owners are accredited investors (venture capital firms)
member private offerings require disclosure in PPM or term sheet of intended
use of proceeds
member private offerings require disclosure in PPM or term sheet of offering
expenses
member private offerings require disclosure in PPM or term sheet of selling
compensation for syndicate members
Individuals that are accredited investors include individuals with net worth more than
$1M
Individuals that are accredited investors include individuals with net worth more than $1M but this does not include
value of home
Individuals that are accredited investors include individuals with income of
200,000 within 2 years or 300,000 with spouse
