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Series 66 > Ch 2 State Registration of Securities Part II > Flashcards

Ch 2 State Registration of Securities Part II Flashcards

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Series 66 flashcards
1
Q

If a Nasdaq stock trades in the secondary market, does the USA consider it an exempt security or exempt transaction?

A

Exempt security

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2
Q

What criteria must be met for commercial paper to be exempt from registration?

A

A 270-day maximum life, minimum denomination of $50,000, rated in one of the top-three categories according to an NRSRO

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3
Q

Accepting orders for unregistered, non-exempt securities is allowed if clients attest that the trade was _____________.

A

unsolicited.

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4
Q

An __________ policy is a type of life insurance that pays face value at the end of a period.

A

endowment policy

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5
Q

True or False: Securities of a Canadian company, but listed on the NYSE, are exempt from state registration.

A

True

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6
Q

Is a 401(k) plan considered a security?

A

No

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7
Q

List the securities that are exempt from registration.

A

Government/municipal bonds, commercial paper, bankers’ acceptances, bank issues, non-profit and small business issues

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8
Q

Name some of the federal covered securities.

A

Securities listed on an exchange, issued by an investment company, and sold as a private placement (Reg. D Rule 506)

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9
Q

a universal life insurance policy considered a security?

A

No

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10
Q

True or False: An issuer whose securities trade on the NYSE must pay a registration fee to a state Administrator.

A

False

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11
Q

For certain federal covered securities, may an Administrator require the issuer to complete the notice filing?

A

Yes. Notice filing is the process by which information filed with the SEC is also filed/shared with the Administrator.

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12
Q

True or False: Charitable organizations may issue securities.

A

True. The securities issued by charitable organizations are exempt from registration.

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13
Q

True or False: A certificate of interest in a mining title is a security under the USA.

A

True. Certificates of interest in mining or drilling titles are securities under the Uniform Securities Act.

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14
Q

Under the USA, is a federal covered security trading in the secondary market an exempt security or an exempt transaction?

A

Exempt security

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15
Q

True or False: Exchange-listed futures contracts are securities.

A

False. Futures and forward contracts are not securities.

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16
Q

As it applies to persons and securities, what does the term “exemption” mean in the USA?

A

Exemption signifies that a person or security is not subject to registration under the USA.

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17
Q

May a state prevent the sale of a federal covered security in its state?

A

No. Federal covered securities are not regulated by the state.

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18
Q

Is a multi-level distributorship considered a security?

A

Yes

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19
Q

True or False: A transaction by an executor is exempt.

A

True. Any transaction by an executor, administrator, trustee in bankruptcy, or conservator is considered exempt.

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20
Q

Is a fixed annuity a security?

A

No, but variable contracts (e.g., variable annuities or variable life insurance) are considered securities.

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21
Q

Is a Keogh plan considered a security?

A

No, but Keogh plan participation is considered a security.

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22
Q

Securities issued by any government with whom the U.S. has _____________ relations are exempt from state registration.

A

diplomatic relations

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23
Q

Is a preemptive right considered a security?

A

Yes

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24
Q

True or False: Precious metals are not considered securities.

A

True

25
Q

Who must prove that an exemption exists?

A

The party claiming the exemption

26
Q

True or False: Occasional, secondary market transactions in an OTCBB stock are considered exempt transactions.

A

False. Only non-recurring secondary market transactions are considered exempt transactions.

27
Q

Is an investment interest in livestock considered a security?

A

Yes

28
Q

The USA considers preorganization certificates, prime bank notes, and voting trust certificates to be __________.

A

securities.

29
Q

NSMIA indicates that securities listed on the NYSE and Nasdaq are _______ _______ securities.

A

federal covered securities.

30
Q

Is a whiskey warehouse receipt considered a security?

A

Yes

31
Q

According to NSMIA, when is an investment pool considered a federal covered security?

A

When it registers as an investment company under the Investment Company Act of 1940

32
Q

Is a certificate of interest in a mining lease a security?

A

Yes

33
Q

True or False: The sale of securities to a pension plan is considered an exempt transaction under the USA.

A

True

34
Q

Is an isolated, non-recurring, non-issuer transaction in OTCBB or OTC Pink Market stock subject to registration?

A

No. It is considered an exempt transaction.

35
Q

Is an option on a commodity futures contract a security?

A

Yes. Options are securities, but futures contracts alone are not. Options may be tied to an equity, index, or currency.

36
Q

Is an interest in oil and gas drilling program considered a security?

A

Yes

37
Q

Is a limited partnership a security?

A

Yes

38
Q

Registration by Coordination requires issuers to meet requirements of the USA as well as what other Act?

A

The Securities Act of 1933

39
Q

Are securities issued by a software company exempt from state registration?

A

No

40
Q

Is a warrant a security?

A

Yes. Warrants are financial instruments that allow investors to acquire stock at a preset price.

41
Q

Is an endowment life insurance policy a security?

A

No

42
Q

A car dealer gives 100 shares of stock to all new car buyers. Is this considered a sale of securities?

A

Yes. Since the gift is contingent on a purchase being made, it is considered a sale of the security.

43
Q

Registration by Filing (Notification) requires issuers to be in business at least _____ months preceding registration.

A

36 months

44
Q

True or False: Options on commodities are securities.

A

True. Options are always considered securities (e.g., options on futures, a currency, an index, or equities).

45
Q

Regarding federal covered securities, may an Administrator prohibit the sale of the security in his state?

A

No

46
Q

Are bonds issued by a charitable organization subject to state registration?

A

No. Securities issued by non-profit organizations are exempt from registration.

47
Q

Non-issuer trading of securities subject to reporting requirements of the Act of 1934 are _________ transactions.

A

exempt transactions.

48
Q

Registration by Filing (Notification) requires that the underwriting commission be no more than _____%.

A

10%

49
Q

What form of state registration is not available in all states?

A

Notification (filing)

50
Q

Is a futures contract considered a security?

A

No, but an option on a futures contract is a security.

51
Q

What method of state securities registration requires issuers to wait to hear from the Administrator before selling?

A

Qualification

52
Q

What instruments are used to facilitate trading of foreign securities in the U.S.?

A

American Depositary Receipts (ADRs)

53
Q

Which Act regulates Unit Investment Trusts?

A

The Investment company Act of 1940

54
Q

Transactions between the issuer and its underwriter are considered ________ transactions.

A

exempt transactions.

55
Q

True or False: Two friends, anticipating a rise in value, purchase property. The property is considered a security.

A

False

56
Q

Is a debenture considered a security?

A

Yes. A debenture is an unsecured corporate bond.

57
Q

True or False: Variable annuities are not securities and are, therefore, not subject to registration.

A

False. Any variable products are considered securities. However, fixed insurance products are not securities.

58
Q

Is an unsolicited, non-issuer transaction in an OTC stock exempt from state registration?

A

Yes, because it is unsolicited.

Series 66 (21 decks)

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