Federal Securities Acts

Question 1

Subject: Federal Securities Act

When are notes considered exempt securities under the Securities Act of 1933?

Answer 1

Subject: Federal Securities Act
Notes are exempt securities under the Securities Act of 1933 if they have a maturity of NINE months or less AND if they are used for commercial purposes rather than investments.

Question 2

Subject: Federal Securities Act
True or False
Under the Securities Act of 1933, securities issued by insurance companies are exempt.

Answer 2

Subject: Federal Securities Act
False
Under the 1933 Act , certain securities are exempt. Although insurance and annuity contracts are exempt, securities issued by the insurance companies are not.

Question 3

Subject: Federal Securities Act
True or False
A class of stock given in exchange for another class by the issuer to its existing stockholders without the issuer paying a commission is exempt from registration under the Securities Act of 1933.

Answer 3

Subject: Federal Securities Act
True
Securities exchanged for other securities by the issuer exclusively with its existing shareholders are exempt from registration under the 1933 Act as long as no commission is paid and both sets of securities are issued by the same issuer.

Question 4

Subject: Federal Securities Act
True or False
When the issuer is a resident of that state, doing 80% of its business in that state, and only sells or offers the securities to residents of the same state, the offering qualifies for an exemption under the 1933 Act as an intrastate issue.

Answer 4

Subject: Federal Securities Act
True
When the issuer is a resident of that state, doing 80% of its business in that state, and only sells or offers the securities to residents of the same state, the offering qualifies for an exemption under the 1933 Act as an intrastate issue.

Question 5

Subject: Federal Securities Act

Define Regulation A

Answer 5

Subject: Federal Securities Act
Regulation A consists of issuances up to $5,000,000 by issuer in a 12 month period that may be exempt if
1. The is a notice filed with the SEC
2. An offering circular is provided to offeree.

Nonissuers can sell up to $1,500,000 in 12 month period.

Question 6

Subject: Federal Securities Act
True or False
Under the Securities Exchange Act of 1934 which applies if interstate commerce or the mail is used, any purchaser of more than 5% of a class of equity securities must file a report with the SEC.

Answer 6

Subject: Federal Securities Act
True
Under the Securities Exchange Act of 1934 which applies if INTERSTATE commerce or the mail is used, any purchaser of more than 5% of a class of equity securities must file a report with the SEC.