CH1: Rules and Regulation Flashcards
What takes place 20 days after filing for a new issue with the SEC?
(a) Firm subscription
(b) Cooling off period
(c) Registration
(d) Selling concession
(e) Underwriting
(c) Registration
Which is found in a preliminary prospectus for a new issue?
A. Final offering price
B. Spread
C. Delivery date
D. None of the above
Who elects the board of directors?
(a) Common stockholders
(b) Preferred stockholders
(c) Bond holders
(d) Corporate officers
(e) Management
(a) Common stockholders
What is a characteristic of the over the counter (OTC) market?
(a) Less stringent listing requirements
(b) Firms make a market
(c) No trading floor
(d) All of the above
(d) All of the above
Who enforces the Securities Act of 1933 and the Securities Exchange Act of 1934?
(a) NASD
(b) SEC
(c) NYSE
(d) CBOE
(e) Treasury
(b) SEC
Under Section 28 of the SRC, _____________is a natural person hired to buy and sell securities on a salary or commission basis properly endorsed to the Commission by the employing Broker Dealer. It shall include any employee of an issuer company whose compensation is determined directly or indirectly on sales of the issuer’s securities
(a) Broker Dealer
(b) Salesman
(c) Trader
(d) Associated Persons
(e) None of the above
(b) Salesman
Which rule by the SEC covers the registration of salesmen and associated persons?
(a) SEC rule 28
(b) SRC rule 4
(c) SEC rule 4
(d) SRC rule 28
(e) None of the above
(d) SRC rule 28
The person employed full time by the Broker Dealer whose responsibilities include internal control supervision of other employees, agents, salesmen, officers, directors of such Broker Dealer for compliance with the Code and rules and regulations is known as:
(a) Broker Dealer
(b) Salesman
(c) Trader
(d) Associated Person
(e) None of the above
(d) Associated Person
Which of the following is a Department within the Securities & Exchange Commission of the Philippines:
(a) The Corporate Finance Department
(b) The Compliance and Enforcement Department
(c) The Company Registration and Monitoring Department
(d) The Market Regulation Department
(e) all of the above
(e) all of the above
Which of the following statements about the Securities Regulation Code are false?
I. A notice, circular, advertisement, letter, or other communication does not constitute an offer for sale in violation of Section 8 of the Code if it is published or transmitted to any person after a registration statementn has been filed with the necessary information.
II. Any evidence of indebtedness issued by a financial institution itself that has been duly licensed by the Bangko Sentral ng Pilipinas to engage in banking/quasi-banking activity shall be exempt from
registration.
III. Evidence of indebtedness issued to the Bangko Sentral
ng Pilipinas (BSP) under its open market and/or rediscounting operations are exempt from registration.
(a) I, III
(b) II and III
(c) IandII
(d) All of the above
(e) None of the above
(d) All of the above
Which of the following conditions must be met for commercial papers to be exempt from registration with the SEC?
I. Payable to a specific person
II. Issued to not more than nineteen (19) non-institutional lenders;
III. In an amount as prescribed by the Commission
IV. Issued to not more than twenty one (21) non-institutional lenders;
(a) I, II,and III
(b) I, III and IV
(c) IandII
(d) II only
(a) I, II,and III
Long-term commercial papers which have maturity period of five (5) years or more shall not be pre-terminated by the issuer or the lender within __________days from issue date.
(a) 365
(b) 730
(c) 1,095
(d) none of the above
(e) 545
(b) 730
According to the Code of Ethics, members must act with integrity, competence, dignity and in an ethical manner when dealing with:
(a) Regulatory bodies
(b) Exchanges
(c) Public and clients only
(d) Public and clients
(e) All of the above
(e) All of the above
All of the following are regulated and supervised by the Securities Exchange Commission EXCEPT:
(a) Philippine Stock Exchange
(b) Mutual Funds
(c) Philippine Dealing Exchange
(d) Corporations
(e) Unit Investment Trusts
(e) Unit Investment Trusts
BSP Circular 392 covering fixed income transactions requires:
(a) Broker dealers to have signed client agreements before transacting with customers
(b) Delivery of securities to third party custodians of buyers investors
(c) Client information to conform with Anti Money Laundering Law
(d) Issuance of Client Statements
(e) Best execution for all client transactions
(b) Delivery of securities to third party custodians of buyers investors
Best execution refers to:
(a) access to major quoting systems
(b) speed with which orders can be executed
(c) ability to obtain best price for order
(d) All of the above
(c) ability to obtain best price for order
The place where previously issued securities are traded is known as:
(a) Primary markets
(b) Secondary markets
(c) Tertiary markets
(d) Capital markets
(e) None of the above
(b) Secondary markets
What are the purposes of the Over-the-Counter Rules?
(a) investor protection
(b) transparency
(c) to promote the capital markets
(d) market integrity
(e) all of the above
(e) all of the above
Which of the following statements is true?
(a) a qualified investor can directly buy or sell securities in the OTC market from a non qualified investor
(b) a non qualified investor can also deal directly in the OTC market
(c) a non qualified investor can only participate in the OTC market by dealing through a broker
(d) a non qualified investor can deal directly with a qualified investors in the OTC market
(e) none of the above
(c) a non qualified investor can only participate in the OTC market by dealing through a broker
Which of the following statement is false?
(a) A dealer cannot deal with a non-qualified investor
(b) A broker can deal with a non-qualified investor
(c) A dealer shall not deal with another dealer unless he has exerted reasonable effort to determine that the other dealer is authorized to participate in the OTC market
(d) An authorized broker can deal with other authorized dealers in the OTC market for his client’s orders
(e) None of the above
(e) None of the above
