Federal Securities Regulations

Question 1

What is the purpose of registering securities?

Answer 1

To adequately and accurately disclose financial and other information upon which investors may determine the merits of the securities.

Question 2

How long is the period between registering w/the SEC and when registration becomes effective?

Answer 2

20 days

Question 3

What is a ‘red herring’?

Answer 3

A preliminary prospectus missing certain unavailable information.

Question 4

What is not available for first time issuers?

Answer 4

Shelf registration

Question 5

What are the requirements of Regulation A?

Answer 5

Notify SEC w/in 20 days of first sale, offering circular, nonissuers are allowed to sell up to $50M of securities w/in 12 months.

Question 6

Can an entity under Rule 504 advertise to accredited investors?

Answer 6

Yes

Question 7

What are the 2 parts of a registration statement?

Answer 7

1) prospectus (written offer to sell) 2) disclosure statement (detailed info about the securities being issued

Question 8

What are 2 types of exemptions?

Answer 8

Exempt securities and exempt transactions

Question 9

What is an offering circular?

Answer 9

A mini-registration statement that contains key information must be provided to all prospective investors. For Regulation A.

Question 10

What is the purpose of Regulation D?

Answer 10

To simplify sale of securities to sophisticated and accredited investors.