Securities 7 Flashcards
Telephone Consumer Protection Act of 1991
Administered by the Federal Communications Commission (FCC)
Protects consumers from unwanted telephone solicitations
Defines the requirements and limitations applied when making unsolicited calls
Bank secrecy act
establishes the US treasury as the lead agency for developing anti-money laundering programs
Sarbanes-Oxley Act of 2002
Established enhanced standards for US public company boards, management and accounting firms
Requires SROs in the security industry to establish research analysts conflict of interest rules for its members
The Uniform Securities Act
Establishes a framework for state registration
Applies to securities, BD, registered reps, investment advisors, and IA reps
Regulation S-P
Enacted by SEC to protect the privacy if customer information
Requires privacy notice describing privacy policies
Regulation SHO
Mandates a locate requirement for securities to be sold short prior to the short sale
Regulation NMS
Enacted to bring trading and reporting uniformity to US securities markets
Order protection rule prohibits a trade-through
Minimum increments pricing rule establishes minimum price increments allowed depending on the price of the security
Regulation A
Small offerings exempt transaction allowing issuers to raise up to $5 million in a 12 month period without full registration
Regulation D
Private placement exempt transaction
Up to 35 non-accredited investors
Accredited investors must meet minimum net worth or annual income criteria
Retail
available to more than 25 retail investors within any 30 day calendar period
Correspondence
available to 25 or fewer retail investors within any 30 calendar day period
Institutional
available only to institutional investors
.25%
Maximum 12b-1 fee for no load fund
1%
100 basis points for bonds
Rule 144 sale volume limit
Maximum 12b-1 fee
5%
Markup policy guideline
No more than 5% of a diversified investment company’s assets can be invested in any one company
6%
Penalty for excess IRA contributions
8.5%
Maximum sales charge for open-end (mutual fund) company
10%
penalty for premature IRA distribution
affiliate or control person if owning 10% or more of outstanding shares
Maximum sales charge on public limited partnerships
Maximum amount of one company’s stock that a diversified investment company can own
25%
Minimum maintenance for long stock position
30%
Minimum maintenance for short stock position
40%
Minimum percentage of mutual fund board members that must be non-interested members
50%
Reg T
Penalty for insufficient IRA distribution after age 70 1/2
Amount of sales proceeds credited to SMA in a margin account
Required cash deposit when withdrawing stock from a margin acount
70%
Corporate dividend exclusion
75%
Minimum amount of IC’s assets that must be invested in securities of other issuers for IC to be classified as diversified
Amount of limited partnerships assets that must be identified to be a specific program
90%
Minimum of net investment income that a mutual fund must distribute by year end under subchapter M
Minimum amount of profits that must be distributed by a REIT by year end
100%
required equity when purchasing new issues, options, and mutual fund shares
amount of non required cash deposit credited to SMA in margin accounts
300%
maximum penalty amount of profit made or loss avoided under the insider trading act of 1988
