Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Series 24 > Unit 5 Supervision of Investment Banking and Research > Flashcards

Unit 5 Supervision of Investment Banking and Research Flashcards

1
Q

For an additional issue offering in which the subject sec is quoted on the OTCBB, an interdealer quotation system, the prospectus delivery requirement period is

A

40 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The SEC Exchange Act of 1934 applies to all of the following

A
  1. registration of BD
  2. use of credit on the purchase of sec
  3. secondary market trading
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Which of the following sec are exempt from the registration under the Uniform Sec Act?

A

US and Canadian government sec

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Under FINRA rules on underwritings, an affiliated relationship exists between a member firm and an issuer of the ownership interest between the two equals

A

10% or more

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Records of each suitability determination made in connection with the sale of a member’s sec must be retained for

A

3 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The SEC Act of 1933 applies to all of the following

A
  1. registration of new issues
  2. full and fair disclosure
  3. prospectus preparation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Standby purchasers are not subject to FINRA Rule 5130 provided

A
  1. the standby arrangement is disclosed in the final prospectus
  2. the standby arrangement is in writing
  3. the syndicate manager represents, in writing, that it was unable to find any other purchasers for the sec
  4. the sec are locked up for 3 months
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Sec Act Rule 144 addresses the sale of

A
  1. letter stock
  2. control stock
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

If there is a restricted period under REG M, a syndicate member that is not a MM is prohibited from all of the following

A
  1. purchasing the subject sec
  2. inducing the purchase of the subject sec
  3. making a bid for the subject sec
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The winning bid in a competitive offering is the one that provides the issuer with

A

the lowest net interest cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

All of the following events would be reported on Form 8-K by a NASDAQ issuer

A
  1. the issuance of unregistered shares under Reg S
  2. a change in executive officers
  3. a major acquisition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

An overallotment provision in an underwriting agreement must be disclosed in

A

the prospectus and the registration statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Under SEC Rule 10b-13, a company that is the target of a tender offer must provide its shareholders with a statement indicating acceptance or rejection of the offer within how many business days of the announcement?

A

10 Days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Prior to placing a stabilizing bid, SEC Rule 104 requires that the syndicate manager

A

1.notify NASDAQ as to whether the bid will be a penalty bi or a penalty-free bid
2. provide NASDAQ with a copy of the cover page of the prospectus
3. advise NASDAQ as to whether the syndicate will engage in any short covering

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Under the SEC Rule 415, a shelf registration, once effective, allows an unseasoned issuer to sell sec for up to how long from the effective date?

A

2 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

An offering in which an underwriter unconditionally agrees to purchase all shares not subscribed to by shareholders in a rights distribution is termed

A

a standby underwriting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

All of the following items of compensation would be considered unreasonable by the Corporate Financing Department

A
  1. any freely transferable stock
  2. any options exercisable below the public offering price
  3. any right of first refusal for future offerings with a life of more than 3 years
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Which of the following are defined as sec

A
  1. Variable annuities
  2. Investment companies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

A Schedule 13-D filing is made when

A

an unaffiliated entity acquires a 5% or more interest in an issuer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Under SEC Rule 10B-18, a safe harbor is provided to an issuer buying back its own stock in the open market if the issuer

A
  1. is not involved in the first transaction of the day
  2. is not involved in any purchase during the last half-hour of trading
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Under SEC Rule 103, once a passive market marker reaches or exceeds its daily net purchase limit, the market maker must

A

seek an excused withdrawal for the remainder of the trading day

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The Trust Indenture Act of 1939 applies to

A
  1. corporate bonds
  2. sold interstate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Under SEC Rule 10b-13, all of the following would be prohibited from tendering shares

A
  1. an investor long call option
  2. an investor short against the box
  3. an investor short stock

Does not include an investor long stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

An underwriting that provides a floor and a ceiling on the number of shares an issuer is willing to sell is termed

A

mini-max

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Under SEC Rule 104, stabilization is permitted in

A
  1. fixed price offering
  2. firm commitment offerings
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

All of the following offerings must be filed with FINRA’s Corporate Financing Department

A
  1. direct participation programs
  2. rights offerings
  3. offering in which a member from is going public
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Under Reg D, all of the following are accredited investors

A
  1. an officer or director of the issuer
  2. an institution
  3. an individual with annual income of $200,000 for the past 2 years
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

A single offer or sale of a sec to a nonresident of a particular state would void the exception provide by

A

Rule 147

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A US company wishes to raise additional capital through the issuance of a $750 million ongoing non-convertible debenture offering relying on a safe harbor from registration and without a qualified indenture. The sales of these sec will be conducted privately with the assistance of an agent who will place the sec with qualified institutional buyers only. Which is true?

A

The issuer is required to submit to the SEC a Form D within 15 days of the first sale of the sec

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

An underwriter will act as an agent in all of the following offerings

A
  1. best efforts
  2. mini-max
  3. all-or-none
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

A person acquiring greater than 5% of any equity sec must submit Form 13D with the Commission within how many days?

A

10 days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Has aspects of both a primary and secondary offering

A

Split (combined) offering

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

An investor’s expression of a conditional wish to purchase a new security after that investor has read a preliminary prospectus

A

Indication of interest

34
Q

Interval between the filing date of a registration statement and the date on which the sec becomes effective

A

Cooling-off period

35
Q

Abbreviated prospectus distributed while an issuer’s registration statement is reviewed by the SEC

A

Red herring

36
Q

Federal sec legislation mandating full and fair disclosure about new issues

A

Sec Act of 1933

37
Q

Syndicate members are liable only to the extent of their participation

A

Divided account

38
Q

All syndicate members share in liability proportionate to their participation

A

Undivided account

39
Q

Type of underwriter that manages a firm commitment underwriting

A

Statutory

40
Q

The smallest portion of the underwriting spread

A

Manager’s Fee

41
Q

Paid to FINRA member firms that are not members of the underwriting group

A

Reallowance

42
Q

The largest portion of the underwriting spread

A

Concession

43
Q

Clause that allows an underwriter to back away from its firm commitment obligation

A

Market out

44
Q

A type of offering that requires an escrow account for customer checks

A

All-or-none

45
Q

The most widely used type of underwriting contract

A

Firm commitment

46
Q

Underwriting used mostly for municipal and government issues

A

Competitive

47
Q

Underwriting used mostly for corporate issues

A

Negotiated

48
Q

Must sign the agreement among underwriters

A

Syndicate

49
Q

Act as agent in the distribution of a new issue

A

Selling group

50
Q

A member may accept a customer check during the cooling off period if it is postdated and held in an escrow account. True or False?

A

False

Checks received from customers during the waiting period must be returned.

51
Q

Buyers of new issues must receive a final prospectus before the confirmation of sale. True or False?

A

False

Buyers of new issues must receive a final prospectus at or prior to the confirmation of sale.

52
Q

Under the USA, coordination is available only to established companies that have previously registered with the state. True or False?

A

False

Coordination is available to first time issuers. Information is filed with the state and SEC concurrently. The sec becomes effective in the state when released by the SEC.

53
Q

The prospectus delivery requirement for IPOs that are to be quoted on the Pink Open Market is 90 days. True or False?

A

True

54
Q

The prospectus delivery requirement for IPOs that are to be listed is 40 days. True or False?

A

False

The prospectus delivery requirement for IPOs that are to be listed or quoted in NASDAQ is 25 days.

55
Q

A firm can continue publishing research reports during the cooling off period if the se being recommended are not equivalent to the sec being underwritten. True or False?

A

True

56
Q

The employees of a member engaged solely in the sale of mutual fund shares are not allowed to buy new equity issues at the POP. True or False?

A

False

An exception applies to employees of members engaged solely in the ssle of investment company sec and DPPs.

57
Q

A selling group member received an allotment of sec from the book running manager at the agreed discounted price. The group member may deliver these sec to the account of its customers at the same concession price. True or False?

A

False

58
Q

Prohibits certain issuer activities during the underwriting period

A

Rule 102

59
Q

Allows passive market-making activity during the restricted period

A

Rule 103

60
Q

Regulates stabilizing bids

A

Rule 104

61
Q

Prohibits manipulative short sales in advance of a public offering

A

Rule 105

62
Q

Limits activity of underwriters who also are market makers

A

Rule 101

63
Q

Number of nonaccredited investors that can buy a private placement under Rule 506b of Reg D

A

35

64
Q

Form 144 does not need filing of a shareholder sells fewer than this amount of shares

A

5000

65
Q

Number of months a state resident must hold sec before sale to a nonstate resident under an intrastate offering

A

6

66
Q

A company may sell up to this amount under a Reg A+ offering

A

$50 million

67
Q

Intrastate offering also is known by this rule number

A

147

68
Q

Number of seconds to report a trade in an NMS sec

A

10

69
Q

Under Rule 144, customers may be called back if they expressed interest within this number of business days

A

10

70
Q

Minimum amount of net worth for an accredited individual investor under Reg D

A

$1 million

71
Q

Minimum amount of assets for QIBs under Rule 144A

A

$100 million

72
Q

Ownership of more than this percentage if a firm’s outstanding stock qualifies an otherwise unaffiliated investor as a control person

A

10

73
Q

A tender offer must remain open for at least 30 days from the date the terms were announced. True or False?

A

False

A tender offer must remain open for at least 20 business days from the date the terms were announced.

74
Q

A customer is considered long stock under the short tender rule if he owns a call, right, or warrant. True or False?

A

False

For the purposes of the short tender rule, customers are considered long stock only if they have issued exercise instructions for calls, rights, or warrants.

75
Q

When a member firm wishes to go public, it must engage the services of a qualified independent underwriter to price its IPO. True or False?

A

True

76
Q

Representatives must get written permission from discretionary account customers prior to purchasing shares of the employer’s stock of these accounts. True or False?

A

True

77
Q

The Corporate Financing Department considers options or warrants that are exercisable below the POP as unreasonable compensation only if they have life of more that 5 years. True or False?

A

False

Options or warrants exercisable at a price below the POP are unreasonable compensation regardless of their duration. Options or warrants also are considered unreasonable compensation if their life is more that 5 years.

78
Q

Reimbursement of solicitation costs is considered part of the underwriters compensation package by the Corporate Financing Department. True or False?

A

True

79
Q

A foreign issuer of stock traded on the NYSE must file a Form 8-K with the SEC withing 15 days of a reportable event. True or False?

A

False

Form 8-K must be filed by domestic issuers only.

80
Q

A nonaffiliated investor that acquires a 5% ownership interest in an issuer of se must file a Form 4 with the SEC. True or False?

A

False

Nonaffiliated investors musta file a Schedule 13D within 10 days when they acquire a 5% or more beneficial ownership interest in an issuer of sec. Form 4 is filed by insiders of the issuer to report an ownership change and must be filed within 2 business days of any changes.

Series 24 (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions