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SERIES 7 > Unit 7- Issuing Securities > Flashcards

Unit 7- Issuing Securities Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Red Herring

A

Preliminary Prospectus used to gauge interest

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2
Q

Tombstone Advertisements

A

The ONLY form of adverstisement allowed during cooling off period
provide information about potential availability of securities and anticipated gross proceed

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3
Q

access equals delivery model

A

access to prospectus over internet means the prospects has been delivered

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4
Q

Who is responsible for:

FILING REGISTRATION STATEMENT TO SEC?

A

ISSUER

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5
Q

Blue Skying

A

When issuer files registration statement with states in which it will be selling securities

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6
Q

Special Purpose Acquisition Company (SPAC)

A

blank-check companies, who raise capital through issues in order to buy businesses

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7
Q

Primary Offering

A

proceeds of underwriting go to the issuing corporation

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8
Q

Secondary Offering

A

proceeds of underwriting go to major stockholder who is selling a major portion of holding

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9
Q

Split Offering

A

Combination of primary and secondary offering

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10
Q

Shelf Offering

A

Registration is goof or two years and allows issuer to sell portions of offering over three year period without having to reregister

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11
Q

Private Placement

A

issues sold to institution or small group of wealthy individuals. THERE CAN BE NO PUBLIC SOLICITATION

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12
Q

Who signs the underwriting agreement?

A

Issuer and underwriter

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13
Q

Syndicate Manager

A

Underwriter manager who deals with the issuer

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14
Q

Syndicate Agreement

A

signed by syndicate members detailing each members commitment and liability

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15
Q

Selling Group

A

other firms enlisted by syndicate to help sell secuities

- members have no financial liability

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16
Q

Negotiated Underwriting

A

Underwriter and issuer negotiate offering terms

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17
Q

Competitive Bid

A

potential underwriters submit bids and issuer chooses the one which would result in lowest net interest cost to the issuer (common in municipal offerings)

18
Q

Letter of Intent

Signed by?

A

underwriter contracts with issuer to buy securities at specified price, quantity and date
SIGNED BY Underwriter and Issuer

19
Q

Market-Out Clause

A

specifies conditions under which the offering may be cancelled

20
Q

Standy By Underwriter

A

If company is issuing additional shares, and shareholders don’t exercise premptive rights, the stand by underwriter steps in

21
Q

Best Efforts Underwriting

A

Broker acts as an agent for selling share, DOES NOT take on risk

22
Q

AON (All or None) Underwriting

A

underwriter must sell all shares or cancel the underwritin

23
Q

Mini-Max Offering

A

common in limited partnership offerings

- set minimum issuance and max issuance

24
Q

Underwriting Proceeds

A

the price at which the underwriters buy stock from the issuer

25
Q

POP

A

Public Offering Price

26
Q

Underwriting Spread

A

POP-Underwriting Proceeds

27
Q

Syndicate Manager Fee

A

10-20%

28
Q

Underwriting Syndicate Fee

A

20-30%

29
Q

Selling Concession Fee

A

50-60%

30
Q

Green Shoe Option

A

allows underwriters to sell up to 15% more shares if high demand

31
Q

REgulation A EXemption

A

permits issuer to raise up to $5MM in 12 months without full registration (only needs notice of sale and offering circular)

32
Q

Regulation D Exemption

A

no full registration needed FOR PRIVATE PLACEMENTS if
issue is privately placed with max of 35 individuals
OR
issue is placed with accredited investors that do not need SEC protection

33
Q

Restricted Stock/Unregistered STock

A

private placement stock

34
Q

Accredited Investor has:

A

$1MM or more net worth

annual income of $200,000

35
Q

Rule 147 Exemption

A

offerings that take place in ONLY one state are exempt from full registration

36
Q

Rule 144 Exemption

A

Rules regulating the sale of control and restricted securities

37
Q

Spinning

A

practice of allocating shares to individuals who are in position to direct securities business to the firm

38
Q

Rule 144a Exemption

A

Qualified Institutional Buyers (QIB)

  • $100MM in assets
  • no holding period requirements for certain institutional investors in US
39
Q

Rule 145

A

protects stockholders of company that proposes to reorganize its ownership structure, acquire new company, etc…

**REQUIRES STOCKHOLDERS BE SENT PROXY STATEMENT

40
Q

Regulation S

A

offers and sales made outside the US by US issuers are excluded from registration provisions

SERIES 7 (13 decks)

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