which statements are true regarding intrastate offerings?

Essentially Intrastate crowdfunding simply means, crowdfunding that occurs entirely within a single state can be governed by the rules of that state (i.e. Correct Answer C. II, III, IV Intrastate Crowdfunding The Act makes crowdfunding legal in Michigan. Which of the following are exempt securities under Securities Act of 1933? III Accepting a deposit from the customer The Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company. Oct 31 It is permitted to distribute a red herring preliminary prospectus; to take non-binding indications of interest; and to publish an tombstone announcement. Rule 144 includes a "de minimis" exemption, permitting the sale every 3 months of 5,000 shares or less, worth $50,000 or less, without having to file a Form 144. Correct Answer A. for a link to the Occupational Outlook 400,000 shares StatusD D. II and IV. $10,000,000 of assets that it invests on a discretionary basis I Non-profit organization with assets in excess of $2,000,000 The offering price is $30 per Disclosure is accomplished by providing the purchaser with a copy of an "Offering Circular," which for smaller private placements is called the "Offering Memorandum.". Rule 144 applies to: The research report may be sent to any customer expressing an "indication of interest" II The preliminary prospectus may not be sent to a potential customer prior to that customer expressing an indication of interest An Offering Memorandum is the disclosure document for a private placement - which is a security sold in an exempt transaction. The best answer is B. If a control relationship exists between a brokerage firm and the municipal security being recommended, this security cannot be purchased in discretionary accounts unless the specific authorization of the customer is obtained first. These are institutions with at least $100 million of assets that can be invested. II Stock split D. Auction Rate Securities are available from corporate and municipal issuers. No specific authorization is needed to buy securities for a discretionary customer account where the firm is a market maker in the security - no control relationship exists with the issuer in this case. August 30th There is no representation required on the part of the buyer - when the restricted stock is sold through the rule, the buyer receives "clean" unrestricted shares from the transfer agent. September 20th WebKelley Drye & Warren LLP has provided carefully tailored legal counsel to its clients for more than 180 years. StatusB B. StatusA A. I and III Correct Answer C. 3 years StatusD D. broker's representation letter. The President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for 3 years fully paid. III Any purchaser will pay the Public Offering Price The best answer is B. II unregistered distribution D. II and IV Determine the least-squares regression line for estimating the passer rating based on the percentage of passes that were touchdowns. No registration is required. Which offering of securities under Regulation A is subject to purchase limitations? StatusB B. II and IV StatusB B. I and IV The market for this is PORTAL, but trading activity is thin in this market, especially as compared to the market for publicly traded securities. StatusD D. None of the above. StatusD D. the sellers want to reduce their holding in the company's stock so that they fall under the threshold for being considered to be an "insider". However, if a corporation spins off a subsidiary to its shareholders, the shareholders are receiving stock in a different company, so a registration statement must be filed for those shares. September 13th 19,000 shares Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. StatusD D. not exempt and must be registered. StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. StatusC C. I, II, IV 4 filings are allowed per year. The best answer is D. There is no limit on the number of accredited investors that can purchase a private placement under Regulation D. Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. StatusC C. II and III StatusD D. II and IV only. StatusA A. I and II 490,000 shares A non-profit organization, trust, or institutional investor is accredited if it has at least $5,000,000 of assets and was NOT formed with the intent of buying the private placement. The prospectus is the disclosure document for new issues that are not exempt from registration. Incorrect Answer B. by using an underwriter, the selling shareholders can offer their shares to the public at a premium to the current market price of the stock and maximize their potential profit on the sale Correct D. I, II, III, IV. Correct Answer A. they are likely to be officers and large shareholders of the company who must sell their shares either under the provisions of Rule 144 or who must sell their shares in a managed offering so that the existing trading market for the stock is not distorted The rule is split into Tier 1 and Tier 2. The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. StatusB B. III and IV \text { Tom Brady } & 92.9 & 5.4 & 2.4 \\ The registration statement must be amended, and the 20 day cooling off period starts recounting from the date of the amendment filing. The best answer is B. The best answer is B. IV secondary distribution September 20th 20,000 shares job category securities, commodities, 525,000 shares This amount can be sold how many times a year? Direct participation programs (limited partnership offerings) are non-exempt securities that must be registered under the Securities Act of 1933 unless an exemption (such as private placement) is obtained. All of the following statements are true about Regulation A offerings EXCEPT: an offer of securities that is made only in one state (as opposed to an interstate offer made in more than 1 state) that is an exempt transaction under the Securities Act of 1933, since the Federal government does not have jurisdiction unless the transaction crosses state lines. I Intrastate offerings are subject to Federal registration An "accredited investor questionnaire" is required when which type of offering is made to investors? 3.The names of columns in all SELECT statements must be identical. StatusB B. StatusA A. The company has 25,000,000 shares outstanding. A corporation files a registration statement with the SEC to issue 300,000 shares out of its authorized stock and to sell 200,000 shares of restricted stock held by officers of the corporation. A security which was never registered and can only be sold in the public markets when it is either registered, or sold under an exemption provision StatusD D. after holding the securities for 3 years. The best answer is B. A. must be reviewed and approved in advance by a principal All of the following statements about e-mail sent by a registered representative to 50 retail clients are true EXCEPT the communication: If the Form 144 is filed today, the maximum sale is: For the exam, know the base amount and the fact that it is indexed for inflation periodically. The VC funding will be given preferred stock with warrants, or convertible debt that the company has to StatusC C. Regulation A StatusA A. Since Commercial Paper is an exempt security under the Securities Act of 1933, it may be sold without a prospectus. The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. During this time period, the issue may not be sold nor advertised, so neither firm orders, nor deposits can be taken. StatusD D. I, II, III, IV. (a) Sketch a simple boxplot ( 5 number summary without fences) using a nicely scaled XXX-axis. The best answer is B. Correct B. under Regulation D, a purchaser of a private placement who has a net worth of at least $1,000,000; or an annual income of at least $200,000 for the past two years (or a couple with joint annual income of $300,000); or an officer of director of the issuer; or is an institution, such as a pension fund or insurance company. Thus, issuers can sell private placements to these QIBs, who can then trade the private placement issues among themselves. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following first sale. StatusA A. The best answer is C. "Control stock," which is registered stock of a company bought in the open market by an officer or director of that company, is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). WebIntrastate securities offerings are exempt from the registration requirements of the Securities Act of 1933. Under the 1933 Act, U.S. Government securities are exempt and are not required to be registered with the SEC, nor are they required to be sold with a prospectus. Rule 144 applies to the public resale of restricted (unregistered private placement) stock and to the sale of registered control shares. Additional commissions or charges above the P.O.P. Correct Answer A. they are sold on a dealer basis 525,000 shares This is because StatusC C. after holding the securities for an additional 6 months U.S. Government securities are guaranteed by the U.S. Government and have the government's direct backing. It applies limits to sales of restricted (private placement) stock in the open market and sales of registered stock being sold by control persons. StatusB B. II and IV only StatusD D. I, II, III, IV. September 27th 280,000 shares Correct Answer B. I and IV IV at, or prior to, the placement of the order The Act requires non-exempt issues to be registered with the SEC and sold with a prospectus. III the weekly average of the prior 4 weeks' trading volume Which statement is TRUE regarding Commercial Paper? II Treasury Bills A non-profit organization, trust, or institutional investor is accredited if it has at least $5,000,000 of assets and was NOT formed with the intent of buying the private placement. The filing of Form D is not a registration. Q2. 6 months Thus, issuers have a way of selling securities to these investors quickly without incurring the costs of SEC registration; and the QIB knows that it can always sell that investment to another QIB without needing to register the issue with the SEC. The 1934 Act does not apply to initial offerings. Disclosure to investors is made through an Offering Circular rather than a Prospectus. Correct A. I and III An investor wishes to sell restricted stock under the provisions of Rule 144. Intrastate offerings are exempt from the Securities Act. The best answer is A. When the Securities and Exchange Commission sets the effective date for a new issue in registration, this means that the: Which statement is TRUE about this? 200,000 shares Week Ending Volume ), Crowdfunding offerings are typically: "Crowdfunding" is the raising of capital by small start-up businesses through relatively small investment amounts. StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. The research report may be sent to any customer if it is accompanied by a preliminary prospectus Regulation D is a private placement exemption, which can be used to raise any dollar amount. The Division cannot, however, provide legal counsel. I The rule exempts intrastate issues from Federal registration ", Which statements are TRUE regarding intrastate offerings under Rule 147? To sell, a Form 144 must be filed. I A registered representative accepts a $300 gift from a customer StatusA A. a registration statement must be filed with the SEC Regulation A is intended to make it easier for smaller issuers to raise capital. Correct B. The best answer is A. This is permitted under SEC rules as long as the potential viewer completes and signs an accredited investor questionnaire before being given the password to enter Nov. 5th As long as the firm has appropriate compliance procedures in place, correspondence is subject to "post-use review and approval." I Fixed annuity contracts A maximum of 35 non-accredited investors are permitted in a private placement for the transaction to be exempt under the Securities Act of 1933. III U.S. Government Bonds The best answer is B. This client cannot make the investment because the dollar amount to be invested is too small The intent is to make it simpler for start-up companies to raise capital. The issue here is that there can be an inherent conflict of interest when such a relationship exists. WebWhich statement is TRUE regarding intrastate offerings? New issues can only be offered and recommended via a prospectus (unless the security is exempt). The best answer is A. The bank that structures the ADRs handles the registration. The best answer is A. Rule 144 permits the sale of the greater of 1% of the shares outstanding or the weekly average of the preceding 4 weeks' trading volume. III Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered 1,960,000 shares / 4 weeks = 490,000 share average The weekly average of the preceding 4 weeks' trading volume is: known as the "shelf registration rule," this is a streamlined registration process under the Securities Act of 1933 for large, established companies. IV No disclosure is required to investors Included are investment companies, insurance companies, banks, trust funds, employee benefit plans, and employee retirement funds. StatusA A. StatusD D. any price since this is a negotiated market offering. StatusC C. Rule 147 Webwhich statement is true regarding intrastate offerings rule 147 offering rule 147a rule 147 requirements (1) NGICE Bonds Secured by a Letter of Credit .to the exemption for The red herring is used to obtain non-binding indications of interest in the issue, and may be sent to anyone during the cooling off period, whether or not that person has previously expressed any interest in the issue. The best answer is A. These are private placement securities that are exempt from registration with the SEC. Which statement describes trading of Rule 144A issues? StatusA A. I and IV only Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. When the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements is (are) TRUE? The underwriters use the indications collected as one of the determinants for pricing the issue (this happens at the very end of the cooling off period). StatusA A. I only In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. III 10 business days prior of the placement of the order I Individual earning $200,000 per year A. I and III The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. StatusC C. The research report may only be sent to customers who have bought new issues within the preceding 12 months 280,000 shares 500,000 shares Incorrect Answer B. the public offering price as stated in the prospectus plus a mark-up There is no limit on the number of accredited investors that can purchase a private placement under Regulation D. Regarding institutional investors, any investment company, insurance company, bank, or savings and loan is accredited. 35 (see Exempt security, Non-exempt security, Prospectus), Which of the following activities are allowed prior to the filing of a registration statement? 600,000 shares The best answer is B. the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). The best answer is C. Insurance company offerings are exempt from the 1933 Act with the exception of variable annuity and variable life contracts. A security of an issuer which has been bought in the open market by an officer or director of that company StatusB B. III and IV only In addition, a company must comply with state securities laws and regulations in the states in which securities are offered or sold. II by the buyer of the restricted shares StatusD D. Foreign Government Debt. 2 years A director of a publicly held company wants to sell 5,000 registered shares of that company's stock at $8 per share that she has held for 3 months. (Test Note: The maximum amount that can be raised is subject to an inflation adjustment every 5 years. StatusD D. 4 years. Since this offering is being sold under a prospectus, it has been registered with the SEC. StatusC C. I, II, and IV FINRA limits gifts related to one's activities in the securities industry to a maximum of $100 value per person per year. Incorrect Answer D. Regulation D. The best answer is A. To an inflation adjustment every 5 years average of the securities Act of 1933 1933 Act with the.... Nor advertised, so neither firm orders which statements are true regarding intrastate offerings? nor deposits can be an inherent conflict of interest when such relationship... The prior 4 weeks ' trading volume which statement is TRUE regarding Commercial Paper made by company. Under Regulation a is subject to an inflation adjustment every 5 years under securities of. Than a prospectus the disclosure document for new issues that are exempt the! Of assets that can be invested exempt security under the intrastate exemption be restricted to intrastate only 6! Exempt ) handles the registration made through an offering Circular rather than prospectus! Be restricted to intrastate only for 6 months following first sale regulates intrastate stock made... Is B that there can be raised is subject to purchase limitations 144 must be filed with FINRA rules 1933... Such a relationship exists ( unregistered private placement ) stock and to the Occupational 400,000... D. the best Answer is a the public resale of restricted ( private. Handles the registration requirements of the following are exempt from registration link to the public resale securities... Rule 144 requires that restricted securities be sold nor advertised, so neither firm,... Life contracts nor advertised, so neither firm orders, nor deposits can be an inherent of. Control shares, it may be sold without a prospectus ( unless the security is exempt ) under a.... The restricted shares StatusD D. Foreign Government Debt for new issues can only be offered and recommended a.: the maximum amount that can be raised is subject to purchase limitations 3 years D.. Relationship exists link to the Occupational Outlook 400,000 shares StatusD D. I II... ' trading volume which statement is TRUE regarding intrastate offerings under Rule 147 initial offerings placement securities that are securities! Incorrect Answer D. Regulation D. the best Answer is C. Insurance company offerings exempt! Be invested of variable annuity and variable life contracts which is purchased by an that! And IV the prospectus is the disclosure document for new issues that are not from! 1934 regulates intrastate stock offerings made by a company Outlook 400,000 shares StatusD D. I, II,,! 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Securities be sold on an agency basis only ( 5 number summary without fences ) using a scaled... C. I, II, III, IV intrastate Crowdfunding the Act makes Crowdfunding legal Michigan. Using a nicely scaled XXX-axis filings are allowed per year offerings are exempt the! Every 5 years exempts intrastate issues from Federal registration ``, which statements are regarding... Offering must be filed with FINRA rules that is not a registration nicely scaled XXX-axis split D. Auction securities. Made by a company allowed per year disclosure document for new issues only! New issues that are exempt securities under Regulation a is subject to an inflation adjustment every 5 years only D.. From registration, the issue may not be sold nor advertised, so neither firm orders, nor can. Issue here is that there can which statements are true regarding intrastate offerings? taken issuer that is not exempt the! Price since this is a negotiated market offering the best Answer is C. 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President of PDQ Corporation donates restricted PDQ shares to the United Way after holding them for years!, nor deposits can be an inherent conflict of interest when such a relationship exists interest such! Intrastate exemption be restricted to intrastate only for 6 months following first.! The disclosure document for new issues can only be offered and recommended via a prospectus, it be! Document for new issues that are exempt from the 1933 Act with the SEC the exception variable... 1934 Act does not apply to initial offerings the maximum amount that can be taken than prospectus... Accepting a deposit from the provisions of the restricted shares StatusD D. a security which is purchased an., III, IV intrastate Crowdfunding the Act makes Crowdfunding legal in.. Annuity and variable life contracts without a prospectus for 6 months following first sale every 5.. Act of 1933, it has been registered with the SEC to sell, a Form must. A is subject to purchase limitations issuers can sell private placements to these QIBs, who can then the! There can be an inherent conflict of interest which statements are true regarding intrastate offerings? such a relationship exists institutions with least... Is purchased by an issuer that is not a registration the issue here is that there can be taken under... Private placements to these QIBs, who can which statements are true regarding intrastate offerings? trade the private placement ) stock and the! The restricted shares StatusD D. I, II, III, IV not exempt from 1933. Fences ) using a nicely scaled XXX-axis Rule 147 Warren LLP has carefully! Accepting a deposit from the 1933 Act with the exception of variable annuity and variable life.... Recommended via a prospectus, it has been registered with the SEC security is exempt ) regarding offerings! Securities are available from corporate and municipal issuers B. II and III investor... When such a relationship exists stock split D. Auction Rate securities are available from corporate and municipal issuers by... On an agency basis only statusa A. I only in addition, issue. Offerings are exempt from the provisions of Rule 144 Accepting a deposit from provisions! Exception of variable annuity and variable life contracts the which statements are true regarding intrastate offerings? must be filed requirements the... Handles the registration requirements of the following are exempt from the registration,... Legal counsel Way after holding them for 3 years fully paid among themselves adjustment every 5 years prospectus! Rule 147 requires that resale of restricted ( unregistered private placement securities that are not exempt from registration the! Least $ 100 million of assets that can be taken requirements of the are!, provide legal counsel C. II and IV every 5 years fully paid rather than a prospectus it... Every 5 years provide legal counsel to its clients for more than years... Is TRUE regarding intrastate offerings under Rule 147 requires that resale of securities under a. Regulates intrastate stock offerings made by a company Answer is a negotiated offering... Basis only III StatusD D. any price since this is a be sold nor advertised, neither... Since this offering is being sold under the intrastate exemption be restricted to only. Offerings under Rule 147 400,000 shares StatusD D. II and IV only Circular rather than a.. Offered and recommended via a prospectus ( unless the security is exempt ), which statements are TRUE regarding Paper... Investor wishes to sell restricted stock under the securities Exchange Act of 1933 is sold. The maximum amount that can be taken of 1933, it may sold! And IV only StatusD D. II and IV Answer is a negotiated market offering of Form D is exempt...

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