SIE CHAPTER 11

Question 1

TRUE OR FALSE: There is no aftermarket prospectus delivery requirement for listed follow-on offerings

Answer 1

Tue. No prospectus requirement applies to follow-on offerings.

Question 2

In the after market, a prospectus must be provided for (BLANK) days following a non-exchange or unlisted IPO.

Answer 2

90

Question 3

When an investor buys a municipal bond in the primary market, what is on the confirmation?

Answer 3

The underwriting spread, agent fees, and the initial reoffering price for each maturity in the offering

Question 4

Are CMOs exempt from registration under the Securities Act of 1933?

Answer 4

No

Question 5

Where can investors get access to official statements for new municipal bonds issues?

Answer 5

Electronic Municipal Market Access (EMMA), a database that’s run my MSRB

Question 6

The Securities Act of 1933 regulates (BLANK)

Answer 6

New issues

Question 7

The private placement disclosure document is the (BLANK)

Answer 7

Offering Memorandum or Private Placement Memorandum (PPM)

Question 8

True or False: Unless it is exempt, a security must be registered before it may be sold publicly.

Answer 8

True

Question 9

What form must be filed within 90 days of selling restricted or control stock?

Answer 9

Form 144

Question 10

How is the underwriter determined for a Negotiated Sale?

Answer 10

The issuer selects the underwriter it would like to work with, and they negotiate the offering terms

Question 11

What does Rule 145 of the Securities Act of 1933 cover?

Answer 11

Registration/prospectus requirements of any reclassification of securities (primarily from mergers of acquisitions)

Question 12

What is a split or combined offering?

Answer 12

In which some shares are offered by the issuer while other shares are offered by the selling shareholders. Both receive the proceeds they sell.

Question 13

An underwriter is permitted to make this statement regarding a new issue..

Answer 13

“The SEC has deemed the registration effective”

Question 14

What does the Offering Memorandum (Private Placement Memorandum) provide?

Answer 14

Details regarding the limited partnership investment, business plan, financial information and information on the general partners.

Question 15

After filing Form 144, what is the maximum amount of restricted securities that can be sold within a 90-day period?

Answer 15

The greater of 1% of the total outstanding shares or the stocks weekly average over the past four weeks

Question 16

What agreement specifies each member’s rights and obligations to each other as well as to the manager?

Answer 16

Syndicate agreement

Question 17

For unlisted follow-on offerings, how long must a prospectus be delivered in the aftermarket?

Answer 17

40 days

Question 18

An underwriters total compensation is the:

Answer 18

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.

Question 19

A broker-dealer is NOT in violation of FINRA rules if it receives payment from an issuer for:

Answer 19

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)

Question 20

For a public offering of a new issues, a customer must be provided with the (BLANK) prospectus

Answer 20

Statutory

Question 21

Rule 144A only applies to:

Answer 21

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.

Question 22

What is typically associated with a revenue bond offering?

Answer 22

Feasibility study

Question 23

When a syndicate member receives credit for a sale of a new issue, the member receives:

Answer 23

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

Question 24

In order to issue a general obligation bond, which of the following requirements must be satisfied?

Answer 24

Voter approval must be received, and the debt ceiling limitations must be observed

Question 25

What is NOT a method of registering securities at the state level?

Answer 25

Justification

The three methods of registering securities at the state level are notification, coordination, and qualification