Special Deck - Federal Securities Flashcards

1
Q

What does the mnemonic “SPIN” stand for, and what has it to do with the Securities Act of 1933?

A

It is the requirements necessary for offering securities prior to prospectus and registration statements are made.

offer Securities

  • Stocks, bonds, debentures, options, warrants, limited partnerships, all investment contracts

Public issue

  • Issuing company
  • Officer, director, major shareholder > 10%
  • Dealer
  • Underwriter

Interstate commerce

No other exemption available

  • 2 types of exemptions:
    • Exempt securities
    • Exempt Transactions
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2
Q

What does the mnemonic ACID-BRAINS stand for?

A

Types of securities and transactions that are exempt from 1933 Securites Act requirment of filing.

Regulation A - small offerings

Commercial paper (notes, bonds) matures in < 9 mo’s and used for commercial purposes (not investing)

  • Casual sales - sale other than by issuer, dealer, underwriter

Intrastate offerings - 80% exclusive to state and local/cannot resell outside state for 9 mo

Regulation D - Private placement offerings (504, 505, 506)

Brokerage transactions

Regulated industries (savings and loans - ex: cd’s)

Agencies of the government

Insurance contracts/policies - stock issued by ins companies NOT exempt

Not for profit

Stock dividends and Splits (exchanges with existing holders) as long as no commission is paid

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3
Q

Name Reg D 504 rules.

A
  • SEC notification - within 15 days of first sale
  • Advertising? - none allowed to nonaccredited investors
  • Resale allowed? - only to nonaccredited investors
  • Company revenue? - < $1,000,000
  • Time frame? - within 12 months
  • # of accredited investors? - unlimited
  • # of non-accredited investors? - not allowed
  • Financial information given? - none
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4
Q

Name Reg D 505 rules.

A

SEC notification - within 15 days of first sale

Advertising? - none allowed

Resale allowed? - investment purpose only (2 years) - Cannot reselll for 2 years

Company revenue? - < $5,000,000

Time frame? - within 12 months

of accredited investors? - unlimited

of non-accredited investors? - < 35

Financial information given?

  • accredited: none
  • non-accredited - audited B/S
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5
Q

Name Reg D 506 rules

A

SEC notification - within 15 days of first sale

Advertising? - none allowed

Resale allowed? - investment purpose only(2 years) - cannot resell for 2 years

Company revenue? - > $5,000,000 - unlimited

Time frame? - unlimited

of accredited investors? - unlimited

of non-accredited investors? - < 3

Financial information given?

  • Accredited - non
  • Non-accredited - audited B/S and represented by accredited.
    • Under JOBS Act, general solicitation allowed if alll accredited
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6
Q

Define and describe Form 10K

A

Annual comparative Audited financial statments certified by a CPA

  • Time to file
    • 60 days after end of fiscal year for large accelerated filers.
    • 75 days for accelerated filers.
    • 90 days fo all other filers
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7
Q

Define and describe Form 0Q

A
  • Quarterly unaudited financial statements.
  • Done for each of first 3 quarters of fiscal year
  • Due 45 days after end of each quarter
    • 40 days for accelerated ad large accelerated
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8
Q

Define and describe Form 8K

A
  • current report due after major events in company ( change in officers, directors, etc.)
  • Must be filed within 4 days of the major event
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9
Q

Explain differences in Large Accelerated Filers, Accelerated Filers, and Non-Accelereated filers.

A

Amount of Market value of securities makes the difference

  • Accelerated filer - > $700 million
  • Large Accelerated filers $700 milion > $75 million
  • Non-Accelerated filer - < $75 million
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