Special Deck - Federal Securities Flashcards
What does the mnemonic “SPIN” stand for, and what has it to do with the Securities Act of 1933?
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
What does the mnemonic ACID-BRAINS stand for?
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
Name Reg D 504 rules.
- 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
Name Reg D 505 rules.
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
Name Reg D 506 rules
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
Define and describe Form 10K
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
Define and describe Form 0Q
- 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
Define and describe Form 8K
- current report due after major events in company ( change in officers, directors, etc.)
- Must be filed within 4 days of the major event
Explain differences in Large Accelerated Filers, Accelerated Filers, and Non-Accelereated filers.
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