REG 12 - Federal Securities Regulations

Question 1

Give mneumonic and list of what exemptions are listed under the Securities Act of 1933?

Answer 1

ACIDBRAINS - regulation A, Commercial paper(or Casual sales), Interstate Offerings, regulation D(private placements), Brokerage sales, Regulated industries, government Agencies, Insurance sales of policies, Not-for-profits, and Stock splits and dividends

Question 2

Under Reg D 1933 Securities Act, what is the time limit for registration?

Answer 2

Registration becomes legal 20 days after initial filing

Question 3

What is the maximum number of investors allowed for Regulation D?

Answer 3

Accredited-unlimited

Unaccredited-504 unlimited, 505 & 506, 35 or less.

Question 4

What solicitation are allowed on Regulation d?

Answer 4

504 - general solicitation allowed.

506 - solicitation to accredited investors only

Question 5

Treatment of proxies under 1933 act?

Answer 5

None. Proxy statements are required for filing along with 10K, 10Q and 8K in 1934 act

Question 6

What percentage is required for a “tender offer”

Answer 6

5%.

Question 7

What does being listed on a national stock exchange have to do with the 1934 Act?

Answer 7

Makes registration mandatory

Question 8

Are tender offers reportable to SEC?

Answer 8

yes

Question 9

What is a tombstone offer?

Answer 9

Informs potential investors of the availability of a prospectus

Question 10

Does SEC prosecute securities fraud?

Answer 10

No. They pass prosecution on to the Justice Department

Question 11

Would bank securities be exempt under 1933 Act? If so, why?

Answer 11

1. Yes

2. Because they are regulated by the Federal Reserve System, and are considered a government agency in a sense.

Question 12

What would a bank CD be classified as?

Answer 12

Commercial paper

Question 13

Are securities sold by insurance companies exempted under 1933 act?

Answer 13

No, but insurance policies they sell are

Question 14

Under Regulation D, can securities be resold sold under an exemption?

Answer 14

Only if the initial purchase was exempt.

Question 15

Under 1934 act registration which size requirements make registration and reporting mandatory?

Answer 15

Original 1934 Ace- $10 million in assets, 500 shareholders
Under 2012 JOBS Act- 500 non-accredited shareholders or 2,000 total shareholders, exempting those receiving shares through employee stock option plan.

Question 16

Under 1934 Act, what will allow a company to terminate registration of a class of securities?

Answer 16

Employee numbers dropping below the 500 mark

Question 17

How soon before filing a registration statement can a company make offers to sell its stock?

Answer 17

NONE!!! Only after registration is accepted.

Question 18

Under 1933 Act prospectus’ need to be sent accredited or unaccredited buyers?

Answer 18

ALL BUYERS!

Question 19

Under 2012 JOBS Act when does a company lose its status as an Emerging Growth Company?

Answer 19

When it is recognized as a large accelerated filer

Question 20

What does Dodd-Frank Act do with regulation of swaps?

Answer 20

Changes them from over-the-counter to clearinghouse products.

Question 21

Under Dodd-Frank Act how much risk do lenders that sell loans bear?

Answer 21

5% of those that don’t meet safe harbor standards

Question 22

Summarize Regulation A

Answer 22

similar to 505 section of Regulation D; ,$5 mil/12 mo/15days/offering circular. Allowed to resell and advertise.

Question 23

What is Commercial Paper??

Answer 23

Notes & Bonds eual to or less than 9 mo. maturity, and used for commercial purposes as opposed to (investment)

Question 24

Define Causal sales in 1933 Act.

Answer 24

Sales by people other than issuer, underwriter, dealer, director, or someone with more than 10% ownership in company.

Question 25

Define Interstate offerings as explained by 1933 Act

Answer 25

At least 80% of sales must state in one state, and buyers cannot resell outside of state for 9 months.

Question 26

What does the clawback provision in Dodd-Frank Act require?

Answer 26

That executives pay back compensation if their company goes through accounting restatements.

Question 27

Name 3 types of filers and list required market values for each class

Answer 27

Non-Accelerated Filers 0-$75 million/Accelerated Filer $75-700 mil/ Large Accelerated filers->$75 million

Question 28

Filing requirements for 10-K documents

Answer 28

All dates refer to days after the end of the fiscal year. Large Acclerated-60 days/Large Accelerated/75 days/Non-Accelerated-90 days

Question 29

Filing Requirements for 10Q documents

Answer 29

All dates refer to end of fiscal quarters.

Large Acclerated-40 days/Acclerated-40 days/Non-Acclerated-45 days

Question 30

Describe Filing requirements for 8K documents

Answer 30

Within 4 days of a major change in company.