SIE Unit 1 Flashcards
Best Efforts Underwriting
Underwriters sell securities from the issuer purely as an agent
Firm Commitment Underwriting
Underwriters buy securities from issuer and assume full responsibility of selling them
Syndicate
Joint venture where broker dealers share risk and profits from the offering
Institutional Investor
Entities that pool money (banks, investment companies, employee benefit plans, hedge funds)
Accredited Investors
Subset made up of all institutional investors and some retail
Qualifications To Become An Accredited Investor
Insider of issuer, income of $200,000 or more past 2 years/$1,000,000 net worth, holders in good standing of Series 7, 65, and 82.
Registration Statement
Filed if security does not meet requirements of 1933 Act
Hybrid Offer
Existing shareholders sell some of their shares along with the newly issued shares
Preliminary Prospectus
Allows issuers and underwriters to gauge investor interest
Shelf Offering
Already publicly traded company registers new securities but doesn’t sell until later (two year period)
Two Things Exchanges Are Defined By
Physical location, pricing system
Two-Dollar Broker
Members that assist floor brokers in making trades and receive compensation in return
Carrying Firm
Provides back office support for brokers; duties include carrying customer accounts and accepting funds/securities from customers
Prime Account
Provides a client with the ability to trade with multiple brokerage houses while maintaining a centralized master account
Transfer Agent
Responsible for ensuring securities are issued in correct owner’s name, cancel old and issue new certificates, maintaining records, and handling lost/destroyed certificates
Clearing Agency
Intermediary between buy and sell side of a transaction
Trustee
An institution or person responsible for making all investment, management, and distribution decisions in an account maintained in the best interests of another who has been legally appointed to provide these services
GTC
Good Till Cancel
FOK
Fill Or Kill
AON
All Or None
What Red Herring Is Also Known As
Preliminary Prospectus; Filed before IPO
Third Market
Where Exchange Listed Securities Are Traded In the OTC Market
Who Tombstone Advertisements Can Be Placed By
Issuer
Market Makers
Brokers Who Incorporate Proprietary Trading Into Their Business
Bid x Ask
Shares available to sell x Shares available to buy
Function Of Clearing Agency
Recieves and delivers payments and securities on behalf of both parties
When Trades For Government Securities Settle
1 Business Day
Exempt Issuers Under Securities Act of 1933
Federal govt, state govt, and charities
Carrying Firm
Member firm that handles back-office tasks like clearing trades, selling confirmations, custody of customer funds, etc.
When Options Settle
T + 1
What Broker-Dealer Is Acting As When They Do Not Charge The Customer A Commission
Principal
Maximum number of nonaccredited investors allowed in a Regulation D exempt transaction under Rule 506(b)
35
Most likely indicate shares of stock were held in electronic form
Held in street name
Final Prospectus
Meets the full and fair disclosure requirements of the Securities Act of 1933
When 20-Day Cooling Off Period Is Resumed After Issuance of Deficiency Letter
On The Date Corrected Registration Is Recieved
Investment Advisers Act of 1940
Regulates firms that offers advice on securities for a fee on a regular basis
