Chapter 1 - Public and Private Offerings Flashcards
Primary purpose of the Securities Act of 1933
Provide investors with full and fair disclosure regarding new issues (prospectus)
True or False: The SEC judges an offering’s investment merit and provides approval.
False
True or False: Blue-Sky Laws apply to broker-dealers and agents operating within a state
True
For how long may a new issue be sold under a shelf registration?
Up to 3 years
True or False: Shelf Registration gives flexibility to the issuer by allowing delayed or continuous sales.
True
The holding period for unregistered (restricted) securities under Rule 144 is __________.
6 Months
Once Form 144 is filed, owners have __________ to sell their securities.
90 Days
QIB stands for ___________________________.
Qualified Institutional Buyer (QIB)
QIBs are financial institutions that have at least $_________________ invested in securities of non-affiliated issuers.
$100 million
Rule 144A exempts sellers from the holding period and volume limitations of Rule 144 if trading is done with a _____.
QIB
What business structure features double taxation at both the corporate rate and the owner’s personal rate?
C Corporation
The SEC will issue a ____________________ to indicate that a registration statement is inadequate.
deficiency letter
If a completed registration must be amended, when will it become effective?
Upon SEC declaration
For how long must a prospectus be made available in the secondary market for an exchange-listed IPO?
25 days
What is a company that has less than $25 million in revenue and outstanding shares valued at no more than $25 million?
Small business issuer
What form is used by a small business seeking to raise $10 million or less?
Form SB-1
An issuer with $700 million outstanding voting shares would be placed in what category?
Well-Known Seasoned Issuer (WKSI)
An issuer with $75 million outstanding voting shares would be placed in what category?
Seasoned Issuer
What document may a Well-Known Seasoned Issuer (WKSI) use to communicate with potential investors?
Free writing prospectus
True or False: A free writing prospectus may be published only after a registration statement has been filed.
False
What provision in securities law restricts certain types of communication during the offering?
Gun Jumping
Shelf Registration is valid for up to _____ years.
3 Years
What is the maximum amount of proceeds selling shareholders may receive through a Regulation A offering?
$1.5 million
The maximum number of non-accredited investors in a Reg. D offering is _____.
35