Regulations of Securities and Issuers

Question 1

An investment contract is a

Answer 1

Security

Question 2

The following are not securities:

Answer 2

• retirement plans (IRAs, Keoghs)
• nonvariable insurance contracts (fixed annuity, term, modified endowment, and whole life)
• collectibles
• commodities (including precious metals like gold)
• condominiums used as personal residence
• currencies

Question 3

Issuer transaction

Answer 3

where the proceeds of the sale go to the issuer, such as in a primary offer or sale of a treasury stock

Question 4

Nonissuer transaction

Answer 4

is where the proceeds of the sale do not benefit the issuer, such as in a secondary market transaction

Question 5

Federal Covered securities

Answer 5

• Investment companies registered under the Investment Company Act of 1940
• Securities listed on regulated exchanges and Nasdaq
• Private placements under Regulation D of the Securities act of 1933
• Just because a security is federally covered does not mean it is not risky

Question 6

Methods of Registration of Securities under the USA

Answer 6

• Notice Filing
• Coordination
• Qualification

Question 7

Notice Filing

Answer 7

Technically not a registration. For federal covered securities, primarily investment companies registered under the investment company act of 1940

Question 8

Coordination

Answer 8

For interstate issues with a concurrent filing with the SEC. Becomes effective simultaneously with federal okay unless Administrator has issued a stop order or hasn’t had documents at least at a stated time (Usually 10-20 days)