UNIT 01.02-001 Flashcards
Which of the following are exempt issuers under the 1933 Act?
A) City College Foundation
B) All-city Charitable Foundation
C) Monroe City State Bank
D) All of these
D) All of these
Explanation
All of these are examples of exempt issuers under Securities Act of 1933.
The cooling-off period is the time period BETWEEN when a _______ is filed with the Securities and Exchange Commission (SEC) and the _______ date.
the time period BETWEEN when a REGISTRATION is filed with the Securities and Exchange Commission (SEC) and the EFFECTIVE date.
The time between the registration filing date with the SEC and the effective date is known as the cooling-off period.
If a customer expressed interest in a revenue bond issued by the City of Junction, Utah, a representative would provide the customer with which of the following?
Official statement
The standard disclosure document in a municipal offering is called an official statement.
In corporate issues it is normally called a prospectus (preliminary or final).
For other exempt offerings the most common term is offering circular.
During the cooling-off period a registered representative may __________ before the EFFECTIVE date.
solicit indications of interest
A preliminary prospectus (red herring) cannot be distributed before the registration date. Between the registration and effective dates, it is used to solicit or gauge indications of interest. After the effective date, sales can be solicited and a final prospectus would be available and must be used.
Which of the following will not be found in a final prospectus?
Agreement among ___________
Agreement among underwriters
The final prospectus will include information that is material to investors in order for them to make an informed decision. The agreement among underwriters is a separate document that is between the members of the underwriting syndicate. Investors do not require knowledge of what is contained in this agreement. This information is a significant part of the SIE.
Which of the following will not be found in a final prospectus?
A) Date and offering price
B) Business plan
C) Statement that the SEC neither approves nor disapproves of the issue
D) Agreement among underwriters
D) Agreement among underwriters
The final prospectus will include information that is material to investors in order for them to make an informed decision. The agreement among underwriters is a separate document that is between the members of the underwriting syndicate. Investors do not require knowledge of what is contained in this agreement. This information is a significant part of the SIE.
Which of the following may occur during the cooling-off period?
Distribute a preliminary prospectus to the investing public.
The time between the registration filing date with the SEC and the effective date is known as the cooling-off period.
During this time, a preliminary prospectus may be distributed to gauge investor interest, but no offers to sell the securities can be made and no orders to purchase the securities can be taken.
While a preliminary prospectus and tombstone ad can be used, sales and advertising literature specific to the securities cannot be.
To qualify for an exemption under Regulation A Tier 2, an offering may be no larger than
$___ million in a __-month period of which not more than $____ million may be from EXISTING shareholders.
$75 million in a 12-month period.
A Tier 2 offering may be no larger than $75 million in 12 months of which not more than $22.5 million may be from existing shareholders.
Which of the following issues would NOT register under the Securities Act of 1933?
A) Circleville GO bond of 2040
B) BigCo Class A cumulative preferred stock
C) Seabird common stock
D) First Mate Coffee Company, Inc., guaranteed bonds of 2035
A) Circleville GO bond of 2040
Municipal bonds are exempt issuers under the 1933 Act.
Securities issued by municipalities are exempt from registration with the SEC.
The other issues listed here are issued by corporations and are required to register unless they meet some other exemption.
As no other information is provided that would indicate another exception, the municipal issue is the best answer.
An ANNOUNCEMENT of a NEW issue of a security that gives the name of the issuer, the price, and the name of the underwriter is called
a tombstone
A tombstone is an announcement of a new issue that includes the name of the issuer, the price of the security, and the name of the underwriter from whom it can be purchased.
