Chapter 2

Question 0

Section 18b of the securities act of 1933 was incorporated in the national securities market improvement act of 1966. What does this cover regarding securities?

Answer 0

It covers the definition of a federal security (any security listed on the NYSE, NASDAQ or AMEX. Any senior security preferred stock or bonds of an issuer that is listed, investment company issues, qualified issues only sold to wealthy investors persons who own investments of at least $5,000,000 or investment managers with at least $25 million in investments, any thing sold in exempt transactions like sales under Reg D) Also all of these only have to be registered with the SEC not in states.

Question 1

What is the basic definition of a security?

Answer 1

Any investment in an enterprise for profit, with management performed by another party

Question 2

The NSMIA defines a sale how?

Answer 2

The act defines a sale as a contract to sell or dispose of a security or an interest in a security for value

Question 3

NSMIA defines a offer to sell how?

Answer 3

Any attempt to sell or dispose of a security, or a solicitation of an offer to buy a security or an interest in a security for value

Question 4

NSMIA defines and offer to purchase as what?

Answer 4

An attempt or offer to obtain a security or a solicitation of an offer to sell a security or interest in a security for value

Question 5

What are the three types of registration that may be used when registering a security?

Answer 5

Registration by :
Filing
Coordination
Qualification

Question 6

Registration by filing is used by whom?

Answer 6

Used by “seasoned” companies
A less rigorous registration process allowed for well established companies with already substantial trading activity. This allows these companies to file the prospectus used in federal registration as registration at the state level so no more paperwork must be done.

Also the easiest and least expensive registration method for the state level for companies that qualify. Also may be used by officers in non issuer transactions.

Question 7

Registration by coordination is used by whom and how?

Answer 7

Coordination registration is used essentially the registration info from the sec is shared with the state to satisfy their requirements. This filing is more rigorous and time consuming. Available to almost any corporation