Chapter 1 pt 3 Flashcards
the primary purpose of the securities act of 1933
to require full and fair disclosure with the sale of securities to the public.
the securities act of 1933 requires
the new issue, unless specifically exempted from the act must be registered with the securities exchange commission before public sale.
all investors must receive a detailed disclosure document known as a prospectus prior to purchase.
private securities offering occurs when
the issuing company, usually with the assistance of an investment bank, sells securities to private investors as opposed to the general investing public
public offerings or private securities offerings subject to registration requirements for securities act of 1933
public offerings are subject to the registration requirements of the securities act of 1933
exempt offerings
offerings that are not subject to the registration requirements
initial public offering
the first time an issuer distributes securities to the public
an SPO or APO can be known as a
follow on public offering
follow on public offering
issuing of shares by a public company that is already listed on an exchange and therefore has already gone through the ipo process
an offering can be a
combination of a primary and secondary offering. these are known as split offerings
in a split offering
the corporation issues a portion of the shares offered to the public and existing shareholders offer the balance.
best efforts underwring calls for
the underwriters to buy the securities from the issuer acting simply as an agent, not the principal
all or none
issuing corporation has determined that it wants an agreement outlining that the underwriter must ether sell all of the shares or cancel the underwriting
mini-max
is a best efforts underwriting, setting a floor or minimum, which is the least amount the isser needs to raise in order to move foward with the underwriting and a ceiling or max on the dollar amount of securies the issuer is willing to sell.
firm commitment underwriting
underwriters act as principals rather than agents. commiting to purchase any unsold shares for the syndicate account.
securites act of 1933 also referred to as
paper act, full disclosure act, new issues act, truth in securities act, prospectus act.
registration statement
discloses material information about the issue
cooling off period
after the issuer files registration with sec, 20 day cooling off period begins
tombstone ads
require minimum information , accouncement and description of securites being offered.
for securities offered via shelf registration
a supplemental prospeectus must be filled with the sec before each sale
blue sky
state registration requirements
uniform securities act
provides a legal framework for the state registration of securities
isolated nonissuer transactions
these are transactions occurring in the secondary market that occur infrequently. transactions generally don’t involve securities professionals
unsolicited transactions
transactions initiated by the client not the agent or representative
coordination
the issuer files with the state at the same time it files with the SEC
Qualification
If registration cannot be accomplished by coordination or filing, it must be registered by qualification. The issuer must respond to any requirement the state specifies.
notice filing
states do not have jurisdiction over the registration requirements of these securities. States could require the filing of a notice to sell securities in that state along with payment of a filing fee.
preliminary prospectus or red herring
can be used as a prospecting tool, allowing issuers and underwriters to gauge investor interest and gather indications of interest
effective date
once the registration becomes effective
during the cooling off period underwriters cannot
make offers to sell securities
take orders
distribute sales literature or advertising material
during the cooling off period, underwriters can
take indications of interest
distribute preliminary prospectuses
publish tombstone advertisments to provide information about potential avalability of the securities
final prospectus
provides all sale confirmations
the sec does not
endorse any offering for sale, they simply clear or release offering for sale.
sec disclaimer says
these securities have not been approved or disapproved by the sec nor have any representations been made about the accuracy or the adequacy of the information
prspectus delivery requirment period
final sprospectus must be delivered to all buyers in the secondary market for a specified time following the effective date
non-exempt securities
when securities are required to be registered in order to be sold to the public
the bank exemption applies only to
the securities of banks, not to the securities of the bank holding companies
official statement
serves as a disclosure document and contains any material information an investor might need about a municipal bond issure.
in regulation a+ offering
the issuer files an abbreviated notice of sale or offering circular with the sec.
primary offering
takes place in the primary market and is one where the proceeds raised go to the issuing entity(corporation or governments)
secondary offering
one in which one or more stockholders in the corporation are selling all or a major portion of their holdings to the public.
