Chapter 1 pt 3

Question 1

the primary purpose of the securities act of 1933

Answer 1

to require full and fair disclosure with the sale of securities to the public.

Question 2

the securities act of 1933 requires

Answer 2

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.

Question 3

private securities offering occurs when

Answer 3

the issuing company, usually with the assistance of an investment bank, sells securities to private investors as opposed to the general investing public

Question 4

public offerings or private securities offerings subject to registration requirements for securities act of 1933

Answer 4

public offerings are subject to the registration requirements of the securities act of 1933

Question 5

exempt offerings

Answer 5

offerings that are not subject to the registration requirements

Question 6

initial public offering

Answer 6

the first time an issuer distributes securities to the public

Question 7

an SPO or APO can be known as a

Answer 7

follow on public offering

Question 8

follow on public offering

Answer 8

issuing of shares by a public company that is already listed on an exchange and therefore has already gone through the ipo process

Question 9

an offering can be a

Answer 9

combination of a primary and secondary offering. these are known as split offerings

Question 10

in a split offering

Answer 10

the corporation issues a portion of the shares offered to the public and existing shareholders offer the balance.

Question 11

best efforts underwring calls for

Answer 11

the underwriters to buy the securities from the issuer acting simply as an agent, not the principal

Question 12

all or none

Answer 12

issuing corporation has determined that it wants an agreement outlining that the underwriter must ether sell all of the shares or cancel the underwriting

Question 13

mini-max

Answer 13

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.

Question 14

firm commitment underwriting

Answer 14

underwriters act as principals rather than agents. commiting to purchase any unsold shares for the syndicate account.

Question 15

securites act of 1933 also referred to as

Answer 15

paper act, full disclosure act, new issues act, truth in securities act, prospectus act.

Question 16

registration statement

Answer 16

discloses material information about the issue

Question 17

cooling off period

Answer 17

after the issuer files registration with sec, 20 day cooling off period begins

Question 18

tombstone ads

Answer 18

require minimum information , accouncement and description of securites being offered.

Question 19

for securities offered via shelf registration

Answer 19

a supplemental prospeectus must be filled with the sec before each sale

Question 20

blue sky

Answer 20

state registration requirements

Question 21

uniform securities act

Answer 21

provides a legal framework for the state registration of securities

Question 22

isolated nonissuer transactions

Answer 22

these are transactions occurring in the secondary market that occur infrequently. transactions generally don’t involve securities professionals

Question 23

unsolicited transactions

Answer 23

transactions initiated by the client not the agent or representative

Question 24

coordination

Answer 24

the issuer files with the state at the same time it files with the SEC

Question 25

Qualification

Answer 25

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.

Question 26

notice filing

Answer 26

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.

Question 27

preliminary prospectus or red herring

Answer 27

can be used as a prospecting tool, allowing issuers and underwriters to gauge investor interest and gather indications of interest

Question 28

effective date

Answer 28

once the registration becomes effective

Question 29

during the cooling off period underwriters cannot

Answer 29

make offers to sell securities
take orders
distribute sales literature or advertising material

Question 30

during the cooling off period, underwriters can

Answer 30

take indications of interest
distribute preliminary prospectuses
publish tombstone advertisments to provide information about potential avalability of the securities

Question 31

final prospectus

Answer 31

provides all sale confirmations

Question 32

the sec does not

Answer 32

endorse any offering for sale, they simply clear or release offering for sale.

Question 33

sec disclaimer says

Answer 33

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

Question 34

prspectus delivery requirment period

Answer 34

final sprospectus must be delivered to all buyers in the secondary market for a specified time following the effective date

Question 35

non-exempt securities

Answer 35

when securities are required to be registered in order to be sold to the public

Question 36

the bank exemption applies only to

Answer 36

the securities of banks, not to the securities of the bank holding companies

Question 37

official statement

Answer 37

serves as a disclosure document and contains any material information an investor might need about a municipal bond issure.

Question 38

in regulation a+ offering

Answer 38

the issuer files an abbreviated notice of sale or offering circular with the sec.

Question 39

primary offering

Answer 39

takes place in the primary market and is one where the proceeds raised go to the issuing entity(corporation or governments)

Question 40

secondary offering

Answer 40

one in which one or more stockholders in the corporation are selling all or a major portion of their holdings to the public.