SIE CHAPTER 11 Flashcards
OFFERINGS
TRUE OR FALSE: There is no aftermarket prospectus delivery requirement for listed follow-on offerings
Tue. No prospectus requirement applies to follow-on offerings.
In the after market, a prospectus must be provided for (BLANK) days following a non-exchange or unlisted IPO.
90
When an investor buys a municipal bond in the primary market, what is on the confirmation?
The underwriting spread, agent fees, and the initial reoffering price for each maturity in the offering
Are CMOs exempt from registration under the Securities Act of 1933?
No
Where can investors get access to official statements for new municipal bonds issues?
Electronic Municipal Market Access (EMMA), a database that’s run my MSRB
The Securities Act of 1933 regulates (BLANK)
New issues
The private placement disclosure document is the (BLANK)
Offering Memorandum or Private Placement Memorandum (PPM)
True or False: Unless it is exempt, a security must be registered before it may be sold publicly.
True
What form must be filed within 90 days of selling restricted or control stock?
Form 144
How is the underwriter determined for a Negotiated Sale?
The issuer selects the underwriter it would like to work with, and they negotiate the offering terms
What does Rule 145 of the Securities Act of 1933 cover?
Registration/prospectus requirements of any reclassification of securities (primarily from mergers of acquisitions)
What is a split or combined offering?
In which some shares are offered by the issuer while other shares are offered by the selling shareholders. Both receive the proceeds they sell.
An underwriter is permitted to make this statement regarding a new issue..
“The SEC has deemed the registration effective”
What does the Offering Memorandum (Private Placement Memorandum) provide?
Details regarding the limited partnership investment, business plan, financial information and information on the general partners.
After filing Form 144, what is the maximum amount of restricted securities that can be sold within a 90-day period?
The greater of 1% of the total outstanding shares or the stocks weekly average over the past four weeks
What agreement specifies each member’s rights and obligations to each other as well as to the manager?
Syndicate agreement
For unlisted follow-on offerings, how long must a prospectus be delivered in the aftermarket?
40 days
An underwriters total compensation is the:
The difference between the public offering price and the price that underwriters pay to the issuer when the buy the shares. The spread is split up between difference members of the underwriting group to compensate them through TAKEDOWN, ADDITIONAL TAKEDOWN, and CONCESSION.
A broker-dealer is NOT in violation of FINRA rules if it receives payment from an issuer for:
Being reimbursed by an issuer for registration fees associated with filing a new issue.
However, receiving compensation for publishing a quote and/or acting as a market maker are violations of FINRA rules. (14233)
For a public offering of a new issues, a customer must be provided with the (BLANK) prospectus
Statutory
Rule 144A only applies to:
Equity securities- This rule allows for the immediate sale of restricted securities to QIBs. It applies to both equity and debt securities and can be used by both domestic and foreign issuers.
The purpose of 144A is to create a more liquid market for restricted securities.
What is typically associated with a revenue bond offering?
Feasibility study
When a syndicate member receives credit for a sale of a new issue, the member receives:
Additional takedown and the concession or the total takedown.
The additional takedown is the portion received for assuming risk, while the concession is the portion received for selling
In order to issue a general obligation bond, which of the following requirements must be satisfied?
Voter approval must be received, and the debt ceiling limitations must be observed
What is NOT a method of registering securities at the state level?
Justification
The three methods of registering securities at the state level are notification, coordination, and qualification
