Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Gabby Series 63 Deck > Issuers and Securities Regulations > Flashcards

Issuers and Securities Regulations Flashcards

You may prefer our related Brainscape-certified flashcards:
Series 63 flashcards
1
Q

An issuers agent is exempt from registering if the agent:

A
  • Sells exempt securities
  • Sells securities in an exempt transaction, or
  • Sells securities to existing directors, officers, or employees of the issuer and received no additional compensation for such sales.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

List the securities that are exempt from registration 6.

A
  1. Government Bonds
  2. Municipal Bonds
  3. Commercial Paper
  4. Bankers Acceptances
  5. Bank Issues
  6. non-profit and small business issues
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Though some securities are exempt from registration, nothing is exempt from the ____________ provisions of the Act.

A

Anti Fraud provisions of the act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

True or False: An American Depositary Receipt (ADR) is a security.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

True or False: Precious metals are not considered securities.

A

True.
Precious metals are NOT securities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Is a voting trust certificate a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is a voting trust certificate?

A

Issued to a stockholder in exchange for her common stock, and represents all of the normal rights of a shareholder (receiving dividends) except the right to vote

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Is a Keogh plan considered a security?

A

No, but Keogh plan participation is considered a security.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Q
Is an investment interest in livestock considered a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Is a certificate of interest in a mining lease a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Is a fixed annuity a security?

A

No, but variable contracts (e.g., variable annuities or variable life insurance) are considered securities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Is an endowment life insurance policy a security?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Is a variable life insurance policy a security?

A

Yes, but a term or universal life insurance policy is not considered a security.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Is a universal life insurance policy considered a security?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Is Keogh plan participation considered a security?

A

Yes, but the Keogh plan itself is not a security.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Is a 401(k) plan considered a security?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Is treasury stock considered a security?

A

Yes.
Treasury stock is stock that was issued and subsequently repurchased by the company.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Is a debenture considered a security?

A

Yes. A debenture is an unsecured corporate bond.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Is a preemptive right considered a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Is a warrant a security?

A

Yes. Warrants are financial instruments that allow investors to acquire stock at a preset price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Is a preorganization certificate considered a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The term “Security” means:

A

any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral trust certificate, preorganization certificate or subscription, warrant, right, voting-trust certificate, transferable share, investment contract, certificate of deposit, undivided interest in oil, gas or other mineral rights, a put, call, straddle, option.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Is an IRA account considered a security?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Is a futures contract considered a security?

A

No, but an option on a futures contract is a security.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Is a multi-level distributorship considered a security?

A

Yes - Pyramid sales plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Is a limited partnership a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Is an interest in oil and gas drilling program considered a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Is a whiskey warehouse receipt considered a security?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

True or False: Securities issued by provinces and municipalities of Canada are subject to state registration.

A

False. Securities issued by Canadian provinces or municipalities are exempt from state registration.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Are bonds issued by the City of New York exempt from state registration?

A

Yes - These are considered municipal bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

True or False: Securities issued by the states and municipalities of Mexico are exempt from registration under the USA.

A

True. An exemption is provided to securities issued by foreign governments with whom the U.S. has diplomatic relations.
- exempt from state registration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Securities issued by any government with whom the U.S. has _____________ relations are exempt from state registration.

A

Diplomatic Relations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

True or False: Securities issued by the U.S. Treasury and U.S. agencies are deemed exempt securities under the USA.

A

True
US Government securities are exempt from STATE registration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

________ issued by insurance companies are exempt from state registration.

A

Bonds

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

True or False: Securities of a Canadian company, but listed on the NYSE, are exempt from state registration.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Are bonds issued by a charitable organization subject to state registration?

A

No. Securities issued by non-profit organizations are exempt from state registration.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What criteria must be met for commercial paper to be exempt from registration?

A
  1. A 270-day maximum life,
  2. minimum denomination of $50,000; and
  3. rated in one of the top-three categories according to an NRSRO
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

An executor of an estate sells a block of securities that are not registered. Is this a violation?

A

No. This is an example of an exempt transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

True or False: Bankers’ Acceptances rated AAA, maturing in 6-months, and issued in $25,000 denominations are exempt.

A

False. Because the BAs were not issued in at least $50,000 denominations, registration is required.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Under the USA, private placements are state exempt if securities are offered to ____ or fewer retail clients over ____ months.

A

10 or fewer retail clients over 12 months.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What does the USA consider a security issued by an investment company that is registered under the Inv. Co. Act of 1940?

A

The securities are considered federal covered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

True or False: Agents selling unregistered, non-exempt securities to banks and trust companies are violating the USA.

A

False. Transactions with banks and trust companies are considered exempt transactions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

If a Nasdaq stock trades in the secondary market, does the USA consider it an exempt security or exempt transaction?

A

Exempt security

44
Q

True or False: Bonds issued by a railroad are exempt from state registration.

A

True. Securities issued by a railroad, common carrier, or public utility are exempt at the state level.

45
Q

True or False: According to the USA, debt issued by a fraternal organization would NOT be considered exempt.

A

False. Securities issued by non-profit organizations are exempt from state registration

46
Q

Non-issuer trading of securities subject to reporting requirements of the Act of 1934 are _________ transactions.

A

Non issuer transaction

47
Q

What is a non-issuer transaction?

A

A transaction involving a security that is not directly or indirectly executed for the benefit of the issuing company.
- occur on the secondary market, (Secondary offerings) in the over the counter market
- share buy backs
- exempting it from state registration

48
Q

If joe sells 100 shares of XYZ stock to his brother, what type of transaction is this?

A

This is a non-issuer transaction, this transaction is exempt from registration requirements.

49
Q

True or False: An Administrator may not require a sales report from the issuer of an OTC security.

A

False

50
Q

Transactions between the issuer and its underwriter are considered ________ transactions.

A

Exempt transactions - does not have to register with the state

51
Q

True or False: The anti-fraud provisions of the USA apply to fixed annuities?

A

False. Since fixed annuities aren’t securities, they are not subject to any provision of the USA.

52
Q

Regarding federal covered securities, may an Administrator prohibit the sale of the security in his state?

A

No, federal convered securities may be sold in any state without registration in the state

53
Q

Under the USA, is stock issued by an electric company an exempt security or an exempt transaction?

A

Securities issued by public utilities are considered exempt securities and not subject to state registration.

54
Q

The only form of state registration that has its effective date set by the Administrator is _______________.

A

Qualification

55
Q

State registration remains in effect for ___ year(s).

A

One year

56
Q

What is an issuer transaction?

A

A transaction in which the issuer receives the proceeds.

57
Q

Regarding federal covered securities, may an Administrator cancel a registration?

A

No, state administrators do not have jurisdiction over federal covered securities

58
Q

Is an isolated, non-recurring, non-issuer transaction in OTCBB or OTC Pink Market stock subject to registration?

A

No. Non issuer transactions in the OTC market are EXEMPT TRANSACTIONS and not subject to state registration

59
Q

Give some examples of insurance company offerings that are exempt from the antifraud provisions of the USA.

A

Life insurance policies and fixed annuities are exempt from the provisions since they are not securities.

60
Q

Is an option on a commodity futures contract a security?

A

Yes. Options are securities, but futures contracts alone are not. Options may be tied to an equity, index, or currency.

61
Q

Are options securities?

A

YES

62
Q

Is a private placement considered an exempt transaction or an exempt security under the USA?

A

Exempt transaction

63
Q

Identify the three forms of state securities registration.

A
  1. Notification (filing)
  2. Coordination
  3. Qualification
64
Q

True or False: Soliciting orders for unregistered, non-exempt securities is prohibited.

A

True. Non exempt securities must be registered before solicitation can occur

65
Q

True or False: A transaction by an executor is exempt. (from state registration)

A

True. Any transaction by an executor, administrator, trustee in bankruptcy, or conservator is considered exempt.

66
Q

True or False: A state Administrator may require notice filing by an issuer of an NYSE security.

A

False. Notice filing is required for mutual funds and Reg D (Rule 506) offerings, but not exchange listed securities.

67
Q

True or False: The sale of securities to a pension plan is considered an exempt transaction under the USA.

A

True

68
Q

Are securities issued by a software company exempt from state registration?

A

No

69
Q

According to NSMIA, when is an investment pool considered a federal covered security?

A

When it registers as an investment company under the Investment Company Act of 1940

70
Q

List some of the different types of institutional clients.

A

IAs, BDs, investment, insurance, or trust companies, banks, savings and loan associations, and pension plans

71
Q

Accepting orders for unregistered, non-exempt securities is allowed if clients attest that the trade was _____________.

A

Unsolicited

72
Q

True or False: Under the Uniform Securities Act, municipal bonds are federal covered securities.

A

False. Municipal bonds are exempt securities. Federal covered securities include listed stocks and mutual funds shares.

73
Q

If an Administrator was aware of facts before a registration became effective, a stop order may be issued if done within __ days.

A

30 days

74
Q

True or False: Securities issued by provinces and municipalities of Canada are subject to state registration.

A

false

75
Q

Registration by Filing (Notification) requires issuers to be in business at least _____ months preceding registration.

A

Registration by Filing (Notification) requires issuers to be in business at least 36 months preceding registration.

76
Q

List some securities that are considered federal covered and exempt from registration.

A

Those listed on national exchanges (e.g. NYSE, NASDAQ) and investment company securities (e.g., mutual fund shares)

77
Q

Define an investment contract

A

An investment of money, in a common enterprise, with expectation of a profit due to efforts of third-party management.

78
Q

The solicitation of buyers for unregistered, non-exempt securities is _____________.

A

The solicitation of buyers for unregistered, non-exempt securities is prohibited.

79
Q

True or False: A state may require a registration fee from the issuer of a Nasdaq security.

A

False. Nasdaq securities are federal covered securities.

80
Q

True or False: Occasional, secondary market transactions in an OTCBB stock are considered exempt transactions.

A

False. Only non-recurring secondary market transactions are considered exempt transactions.

81
Q

Registration by Filing (Notification) requires that the underwriting commission be no more than _____%.

A

Registration by Filing (Notification) requires that the underwriting commission be no more than 10%.

82
Q

What method of state securities registration requires issuers to wait to hear from the Administrator before selling?

A

Qualification

83
Q

List the securities that are exempt from state registration.

A

Government/municipal bonds, commercial paper, bankers’ acceptances, bank issues, non-profit and small business issues

84
Q

True or False: Bankers’ Acceptances rated AAA, maturing in 6-months, and issued in $25,000 denominations are exempt.

A

False. Because the BAs were not issued in at least $50,000 denominations, registration is required.

85
Q

Are securities that are traded on the OTCBB or the OTC Pink Market exempt?

A

No. Non-exempt securities. subject to state regulations

86
Q

What is the minimum cooling-off period for registration by notification?

A

Five days

87
Q

If an IPO is being registered, an issuer is most likely using what form of state registration?

A

Coordination

88
Q

Do the anti-fraud provisions of the USA apply to exempt securities?

A

Yes. Nothing is exempt from fraud.

89
Q

Non-issuer trading of securities subject to reporting requirements of the Act of 1934 are _________ transactions.

A

Non-issuer trading of securities subject to reporting requirements of the Act of 1934 are exempt transactions

90
Q

An intrastate offering may use which method of state securities registration?

A

Qualification

91
Q

True or False: Paperwork related to coordination is filed with the Administrator at the same time as the SEC filing.

A

False. Registration will become effective simultaneously with SEC registration, but need not be filed at the same time

92
Q

Is an interest in a real estate condominium development considered a security?

A

yes

93
Q

What form of state registration is not available in all states?

A

Notification filing

94
Q

To use Filing (Notification) to register stock, the offering price must be at least $______ per share

A

$5/share

95
Q

As it applies to persons and securities, what does the term “exemption” mean in the USA?

A

Exemption signifies that a person or security is not subject to registration under the USA.

96
Q

Is an unsolicited, non-issuer transaction in an OTC stock exempt from state registration?

A

Yes, because it is unsolicited.

97
Q

A car dealer gives 100 shares of stock to all new car buyers. Is this considered a sale of securities?

A

Yes. Since the gift is contingent on a purchase being made, it is considered a sale of the security.

98
Q

Registration by Coordination has a minimum cooling-off period of _____ days

A

10 days

99
Q

Describe what it means for a security to be registered.

A

The security may be legally offered or sold in the state.

100
Q

Registration by Coordination requires issuers to meet requirements of the USA as well as what other Act?

A

The Securities Act of 1933

101
Q

True or False: Exchange-listed futures contracts are securities.

A

False. Futures and forward contracts are not securities.

102
Q

True or False: A trade of unregistered, non-exempt securities between two BDs is a violation of the USA.

A

False. This is an exempt transaction.

103
Q

How would a well-established corporation register a subsequent (additional) offering to be sold in multiple states?

A

Notification (filing)

104
Q

An executor of an estate sells a block of securities that are not registered. Is this a violation?

A

No. This is an example of an exempt transaction.

105
Q

/which filing method is most appropriate for federal covered securities?

A

Coordination

106
Q

Under the USA, a nonexempt transaction may take place in the state only if

A

the security is registered, exempt or federally covered

107
Q

Under the USA, a nonexempt transaction may take place in the state only if

A

the security is registered, exempt or federally covered

Gabby Series 63 Deck (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions