Crunch Time : Chapter 9 Flashcards
What is a closed-end fund priced independently of?
Its NAV
How many calendar days must a mutual fund pay its shareholders after redemption?
Seven calendar days
What are 12b-1 fees used for in mutual funds?
To pay agents distribution fees (e.g., sales bonuses)
What is a red herring under the Act of 1933?
A document given to potential investors during the cooling-off period containing a range of prices but no final price or effective date
What are information barriers also known as?
Chinese walls
What is the maximum number of non-accredited investors allowed under Reg. D?
35 non-accredited investors
Who qualifies as an accredited investor under Reg. D?
Individuals with a net worth more than $1 million or an annual income of $200,000 or more ($300,000 for spouses)
What is the maximum 12b-1 fee for a no-load mutual fund?
0.25% of the fund’s average net assets per year
Under the Act of 1933, within how many years must civil suits be brought?
Within three years from the date of the violation or one year of discovery of a violation, whichever comes first
What are the penalties for willful violations of the Act of 1933?
A fine of $10,000 and/or imprisonment for five years
What do Forms 10-Q and 10-K disclose?
Financial performance of SEC reporting companies
Who files Schedule 13D?
Any person who acquires more than 5% of the voting stock of a company
What is Schedule 13F filed by?
Advisers that control more than $100 million in equity securities as of the last day of any month
Under the Securities Exchange Act of 1934, are bond ratings required to be disclosed on a trade confirmation?
No
What must employees of a broker-dealer do with material, non-public information?
They cannot use it to make personal trades, trades for customers, or forward the information to anyone
What does the acronym ‘AML’ stand for?
Anti-money laundering
What must financial firms have in place to detect and prevent money laundering?
Policies
