Unit 20 The New Issues Market

Question 1

Max duration of a shelf registration

Answer 1

3 years

Question 2

Free-writing prospectus (FWP)

Answer 2

written communication from an issuer that supplements the preliminary or final prospectus
EX: letter from a CEO

Question 3

Trust Indenture Act of 1939

Answer 3

corp bonds issue of more than $50mm require trust indenture

Question 4

Regulation A

Answer 4

raise a small amount of capital without SEC registration process, up to $5mm in 12 months
Tier 1: $20mm
Tier 2: $75mm

Question 5

Rule 147

Answer 5

only state residents can purchase securities

Question 6

Rule 147A

Answer 6

allows a company to be incorporated out of state
intrastate crowdfunding

Question 7

Reg D

Answer 7

accredited investor
$200k income ($300k married)
$1mm net worth

Question 8

Accredited institution

Answer 8

$5mm

Question 9

Reg D Rule 506 (b)

Answer 9

raise unlimited capital of accredited and max 35 non-accredited
no public advertising

Question 10

Reg D Rule 506(c)

Answer 10

raise unlimited capital of accredited and no non-accredited
allows public advertising

Question 11

Reg D file From D with SEC no later than _____ days after offering

Answer 11

15

Question 12

Reg D issues uses a _____ rather than a prospectus.

Answer 12

memorandum

Question 13

Reg D records must be kept for ___ years.

Answer 13

3

Question 14

Rule 144

Answer 14

investor can sell restricted stock to public market if held for 6 months
an insider can sell greater of 1% of outstanding shares or avg weekly trading volume, if held for 90 day period.

Question 15

Rule 144A

Answer 15

allows Qualified Institutional Buyers (QIBs) to freely trade private placements

Question 16

Crowdfunding

Answer 16

allows individuals to invest in startups. Max amount to be raised is $5mm per year

Question 17

Recommending unregistered, non-exempt stock is a…

Answer 17

regulatory violation