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Series 66 > Ch 2 State Registration of Securities > Flashcards

Ch 2 State Registration of Securities Flashcards

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Series 66 flashcards
1
Q

Is a private placement considered an exempt transaction or an exempt security under the USA?

A

Exempt transaction

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2
Q

What type(s) of transaction(s) are exempt from the antifraud provisions of the USA?

A

No transaction is exempt from the antifraud provisions of the USA.

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3
Q

Is a preorganization certificate considered a security?

A

Yes

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4
Q

True or False: Soliciting orders for unregistered, non-exempt securities is prohibited.

A

True

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5
Q

What does the USA consider a security issued by an investment company that is registered under the Inv. Co. Act of 1940?

A

The securities are considered federal covered.

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6
Q

In order to qualify for an exemption, who bears the burden of proof?

A

The person claiming the exemption

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7
Q

True or False: Paperwork related to coordination is filed with the Administrator at the same time as the SEC filing.

A

False. Registration will become effective simultaneously with SEC registration, but need not be filed at the same time.

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8
Q

Registration by Coordination has a minimum cooling-off period of _____ days.

A

10 days.

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9
Q

What’s an issuer transaction?

A

A transaction in which the issuer receives the proceeds.

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10
Q

True or False: According to the USA, debt issued by a fraternal organization would NOT be considered exempt.

A

False. Securities issued by non-profit organizations are exempt from state registration.

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11
Q

List some of the different types of institutional clients.

A

IAs, BDs, investment, insurance, or trust companies, banks, savings and loan associations, and pension plans

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12
Q

Is a voting trust certificate a security?

A

Yes

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13
Q

To use Filing (Notification) to register stock, the offering price must be at least $______ per share.

A

$5.00 per share.

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14
Q

Are securities that are traded on the Toronto Stock Exchange subject to state registration requirements?

A

No. These secondary market transactions are considered exempt from registration according to the USA.

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15
Q

How would a well-established corporation register a subsequent offering to be sold in multiple states?

A

Notification (filing)

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16
Q

Is treasury stock considered a security?

A

Yes. Treasury stock is stock that was issued and subsequently repurchased by the company.

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17
Q

True or False: Securities that are issued by registered investment companies are considered federal covered securities.

A

True

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18
Q

True or False: Securities issued by municipalities of Mexico are exempt under the USA.

A

True. An exemption applies to securities issued by foreign governments with whom the U.S. has diplomatic relations.

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19
Q

True or False: Agents selling unregistered, non-exempt securities to banks and trust companies are violating the USA.

A

False. Transactions with banks and trust companies are considered exempt transactions.

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20
Q

What is the minimum cooling-off period for registration by notification?

A

Five days

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21
Q

List some securities that are considered federal covered and exempt from registration.

A

Those listed on national exchanges (e.g. NYSE, NASDAQ) and investment company securities (e.g., mutual fund shares)

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22
Q

What four elements are required for an investment contract to be considered a security?

A

1) An investment of money, 2) A common enterprise, 3) Efforts made by a third party, 4) An expectation of profits

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23
Q

True or False: Securities issued by provinces and municipalities of Canada are subject to state registration.

A

False. Securities issued by Canadian provinces or municipalities are exempt from registration.

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24
Q

Under the USA, is stock issued by an electric company an exempt security or an exempt transaction?

A

Securities issued by public utilities are considered exempt securities.

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25
Q

State registration remains in effect for ___ year(s).

A

one year.

26
Q

Under the USA, private placements are exempt if securities are offered to ____ or fewer retail clients over ____ months.

A

10 or fewer retail clients over 12 months.

27
Q

Describe what it means for a security to be registered.

A

The security may be legally offered or sold in the state.

28
Q

True or False: Under the Uniform Securities Act, debentures issued by a Canadian bank are exempt from registration.

A

False

29
Q

Is a variable life insurance policy a security?

A

Yes, but a term or universal life insurance policy is not considered a security.

30
Q

Define an investment contract (according to the Howey Test).

A

An investment of money, in a common enterprise, with expectation of a profit due to efforts of third-party management.

31
Q

True or False: Securities issued by the states and municipalities of Mexico are exempt from registration under the USA.

A

True. An exemption is provided to securities issued by foreign governments with whom the U.S. has diplomatic relations.

32
Q

An executor of an estate sells a block of securities that are not registered. Is this a violation?

A

No. This is an example of an exempt transaction.

33
Q

Though some securities are exempt from registration, nothing is exempt from the ____________ provisions of the Act.

A

anti-fraud provisions of the Act.

34
Q

Which method of state securities registration would likely be used for an IPO being offered in several states?

A

Coordination

35
Q

If an Administrator was aware of facts before a registration became effective, a stop order may be issued if done within __ days.

A

30 days.

36
Q

Regarding federal covered securities, may an Administrator cancel a registration?

A

No

37
Q

True or False: An Administrator may not require a sales report from the issuer of an OTC security.

A

False

38
Q

True or False: A state may require a registration fee from the issuer of a Nasdaq security.

A

False. Nasdaq securities are federal covered securities.

39
Q

Is Keogh plan participation considered a security?

A

Yes, but the Keogh plan itself is not a security.

40
Q

Identify the three forms of state securities registration.

A

Notification (filing), coordination, qualification

41
Q

True or False: Securities issued by the U.S. Treasury and U.S. agencies are deemed exempt securities under the USA.

A

True

42
Q

True or False: A trade of unregistered, non-exempt securities between two BDs is a violation of the USA.

A

False. This is an exempt transaction.

43
Q

________ issued by insurance companies are exempt from state registration.

A

Bonds

44
Q

True or False: A state Administrator may require notice filing by an issuer of an NYSE security.

A

False. Notice filing is required for mutual funds and Reg D (Rule 506) offerings, but not exchange listed securities.

45
Q

The only form of state registration that has its effective date set by the Administrator is _______________.

A

qualification.

46
Q

True or False: Securities that are listed on the NYSE are exempt from state registration.

A

True

47
Q

Are bonds issued by the City of New York exempt from state registration?

A

Yes

48
Q

If an IPO is being registered, an issuer is most likely using what form of state registration?

A

Coordination

49
Q

True or False: Under the Uniform Securities Act, municipal bonds are federal covered securities.

A

False. Municipal bonds are exempt securities. Federal covered securities include listed stocks and mutual funds shares.

50
Q

Are securities that are traded on the OTCBB or the OTC Pink Market exempt?

A

No

51
Q

Is an interest in a real estate condominium development considered a security?

A

Yes

52
Q

Give some examples of insurance company offerings that are exempt from the antifraud provisions of the USA.

A

Life insurance policies and fixed annuities are exempt from the provisions since they are not securities.

53
Q

Is an IRA account considered a security?

A

No

54
Q

True or False: Federal covered securities issuers may be required to pay a filing fee to an Administrator.

A

True. Certain types of federal covered securities issuers may be required to pay a filing fee.

55
Q

True or False: An American Depositary Receipt (ADR) is a security.

A

True

56
Q

The solicitation of buyers for unregistered, non-exempt securities is _____________.

A

prohibited.

57
Q

True or False: Bonds issued by a railroad are exempt from state registration.

A

True. Securities issued by a railroad, common carrier, or public utility are exempt at the state level.

58
Q

True or False: IRAs and Keogh plans are considered securities.

A

False. The participation in these plans (what goes in the plan) is considered a security, but the plan itself is NOT.

59
Q

True or False: Bankers’ Acceptances rated AAA, maturing in 6-months, and issued in $25,000 denominations are exempt.

A

False. Because the BAs were not issued in at least $50,000 denominations, registration is required.

60
Q

An intrastate offering may use which method of state securities registration?

A

Qualification

Series 66 (21 decks)

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