Securities Registration, Exempt Securities and Exempt Transactions

Question 1

Selling securities must either be:

Answer 1

Registered, exempt, or sold through an exempt transaction

Question 2

Methods of security registration:

Answer 2

-Coordination (IPO’s only)
File not yet effective => means the entity in question is doing an IPO and therefore they will be doing coordination

-Notice filing
Used by investment companies. They provide a notice to the state administrator that they are selling a new security/ portfolio

-Qualification
Used for smaller issuers. Or security being sold exclusively in one state.

Question 3

Exempt Issuers:

Answer 3

-US Government

-State and local Governments-Foreign National Governments where we have diplomatic relations
Canada is the only foreign country given exemption at state level. The country is exempt but the local foreign entity is not (the city isn’t but the country is)

-Banks, Insurance companies, Credit Unions
If it’s a bank holding company or insurance holding company then its NOT exempt

-Trucking, railroads, airlines
Consolidated carrier means they are Trucking railroads airlines and are exempt

Question 4

Exempt Securities:

Answer 4

• Commercial Paper

- Bankers Acceptances

Question 5

Exempt Transactions:

Answer 5

• Transactions with institutions
• Transactions between issuers and underwriters
• Unsolicited orders (If the advisor doesn’t sell the stock to a client but the client comes to them)
• Private placements (Unregistered restricted stock)

Question 6

Federal Covered Exemptions

Answer 6

• Exchange Listed
• NYSE/ NASDAQ
• Investment Companies