Unit 20: New Issues & Exemptions

Question 1

What security is related to Prospectus?

Answer 1

corporate securities

Question 2

What security is related to Summary Prospectus?

Answer 2

Mutual funds

Question 3

What security is related to Official Statement?

Answer 3

Muni bonds

Question 4

What security is related to Trust Debenture?

Answer 4

Corporate Bonds above $50mm

Question 5

The purpose of a UW’s selling group is to…

Answer 5

increase marketability

Question 6

Bonds must register on the states of distribution under which law?

Answer 6

Blue Sky Laws (state law)

Question 7

Reg A+

Answer 7

Small business
Tier 1: $20mm
Tier 2: $75mm
12 month capital raise
Risks: speculative & illiquid

Question 8

Reg D

Answer 8

Private Placements
Only 35 non-accredited purchasers

Question 9

Rule 147

Answer 9

Intrastate (local)

Question 10

Rule 144A

Answer 10

Qualified institutional buyers (QIBs) = $100mm discretionary assets
Low marketability due to unregistered

Question 11

Rule 144

Answer 11

Control and restricted stock
Control Stock: stock held by company insider , volume limits
Restricted stock: unregistered not sold to public, 6 month holding period

Question 12

Reg S

Answer 12

Offshore (international) offers

Question 13

Accredited individual

Answer 13

Income: $200k
NW: $1mm (excluding residence)

Question 14

Accredited married

Answer 14

Income: $300k
NW: $1mm (excluding residence)

Question 15

Accredited Insitutions

Answer 15

> $5mm assets

Question 16

Non-accredited investors limits: income or NW under $107k

Answer 16

$2,200 or 50% of NW

Question 17

Non-accredited investors limits: income or NW over $107k

Answer 17

10% of income or NW, max $107k