Unit 8: Regulation of Securities and Their Issuers Flashcards
Uniform Securities Act 1956
Template for states to adopt for their own legislation
Administrator
Has responsibility to administer securities law of the state
Security
An (1) investment of money in a (2) common enterprise (4) with the expectation of profit (4) by the efforts of a person other than the investor.
Examples of non-securities
Fixed Annuity
Retirement Plan (over $1M assets)
Collectibles
Commodities, Futures, Forwards
Condo/personal residence
Currency
Issuer
one who issues or proposes to issue a security
Securities without an issuer
Certificates of interest, oil/mining participation, pre-org certification, etc.
Issuer transaction
if funds go directly to issuer
-therefore, secondary market transactions are non-issuer
Exempt security
will be exempt for every transaction
Exempt transaction
must be established in each instance
Examples of Exempt Securities
Govt Securities
Insurance Co
Public Utility
Non-profit
EBP
Money markets
DO of Depository Institution
Federal Covered Securities
Exempt at State level, but will “notice file”
-1940 Act Securities
-Listed securities
-Private Placement
Muni Bonds (unless that state)
Rule 147
The entire offering is in that state
Rule 147A
Issuer can be outside state, but offering in one state. OK if general advertising
Exempt Transaction under USA
-Isolated non-issuer transaction “For Sale By Owner”
-Unsolicited
-Between Issuer/Underwriter
-Trustee in bankruptcy
-Institutional Transactions
-Limited Offering (10 or less non-institutional persons, no soliciting, no commissions)
-Non-issuer transaction by pledgee
Proving issue is exempt
is responsibility of the person requesting it. Agent/Rep must still be properly registered
Exempt Transaction under Securities Act 1933
Performed by anyone other than issuer
Performed by issuer, but not a public offering
Issue cooling off period
Cannot solicit sales, but can gather interest
Preliminary Prospectus
missing POP (but can have range) and effective date
Registering with state (USA 1856)
-amount of securities to be issued
-in which states
-any adverse adjustments
-anticipated use of funds and effective date
application can also be submitted by a large shareholder
Three methods for registering
Notice filing- for ones already federally covered (trades on national exchange)
Coordination- if already filed under 1933 Act- mutual funds
Qualification- intrastate securities
Overselling an offer
is allowed if:
-POP is kept the same
-underwriter discounts/commissions are kept the same
SPAC acquisition
makes private company become public
