question

U5 Form?

answer

Generated when you quit or resign from a securities firm. Must be reviewed with new employer within 60 days of filing U4 application

question

U4 Form?

answer

Must be filed to register with any SRO and be filed with the Central Registration Depository. Disqualified from U4 if any of these apply to you: 1. Fasle reports. 2. Bribery 3. Perjury 4. ANY other felony. Banned for 10 years and needs waiver to be hired

question

Who must register for series 7?

answer

Anyone engaged in 'general securities business'

question

How may times can you fail the 79 exam?

answer

3 times. After the first time you have to wait one month before retaking. After second test you have to wait six months.

question

What registration exam do most states require?

answer

The series 63

question

What kind of work can non-registered employees perform?

answer

Extend invitations 2. Inquire of customers for a registered rep. 3. Inquire if customer wants to receive any offering documents. They can NOT give recommendations or pricing

question

Military duty and FINRA registration requirements

answer

Military is in the 'special' inactive category. They are except from the two year inactive limitation. However, if they don't re-register within 90 days of service, they must register in 2 years minus the time between resigning and joining the military. (the gap between work and military service)

question

Continuing education requirements?

answer

2 years after initial registration, and every 3 years after than. There is no graduation. You have 120 days from your anniversary date to finish the continuing education

question

What is a 'covered person'

answer

Anyone that has direct contact with customers in sales & trading and investment banking. The firm must annually examine these peoples training needs

question

Main effects of the 1933 securities act

answer

1. Unless excempt, securities must be registered 2. A prospectus must be filed which describes the securities being offered

question

What securities are except from federal registration:

answer

1. Private offerings to a limited investor base 2. Intrastate offerings 3. Securities of munipal, state, federal governments 4. Limited size offerings

question

What is restricted stock?

answer

Stock that was issued without registraiton and that has a restricted legend stating that the securities cant be resold. Unregistered stock from the company OR its affiliates is restricted. Even if they were registered BEFORE you buy from an affiliate, they still become restricted.

question

Rule 144 holding period for restricted securites

answer

If the company reports under the 1934 Securities Act requiremnts, you must hold them for 6 months . If the compay does not report under 1934, you must hold for one year.

question

Rule 144A continued

answer

After purchasing a restricted security. A resale notice must be filed if during any three month period you sell more than 5k in shares OR stock worth more than 50k

question

Regulation S?

answer

Safe harbour for foreign securities. Applies when: 1. Sales must take place outside the U.S , on a designated exhange, AND if the issuer has a U.S prescense 2. The company, affiliates, agents may not engage in direct U.S. sales efforts

question

Rule 10b-5

answer

SEC act of 1934 1. Prohibits any act or ommission that results in securities fraud. 2. Results in insider trading (when any party knows the material is non public or a fiduciary responsibility was broken) 3. Other examples: wash sales, matched orders, and pooled activities (i.e, any price manipulatin)

question

Statute of limitation on manipulation recovery

answer

1. Suit must be brought within one year of discovery AND within three years of manipulative discovery.

question

Form 13-e3?

answer

Form used in a management buyout or a 'going private' transaction. Filed when action causes stock to be held by less than 300 issuers or to be delisted from an exchange

question

SEC rule 10b-18?

answer

Governs companies stock buybacks. 1. Must use one broker dealer 2. Must spread purchases through day. Can't be first purchases or within last half hour 3. Can only purchase securities at the highest last independet bid 4. Can not purchase more than 25% of the an average day trading volume

question

10b-18 block purchase

answer

Purchase price of 200k or more and 2. 5k shares w/ price of at leaset 50k or 3. At least 20 lots that total 1/10th of 1% of the security exceptions to 10b-18 Doesn't apply if the market was suspended.

question

NYSE rule 77

answer

A member of the floor may on 1. buy or sell securities 'on stop' at or below market 2. buy or sell at the close 3. buy or sell dividends 4. bet on the course of the market 5. buy or sell privileges to recieve securities

question

Insider trading

answer

1. Employ a device, scheme, or artifice to defraud 2. Make an untrue statement or omit a material fact 3. Engage in any practice that would be deemed as fraud

question

Tippers and Tippees

answer

1. The tippee is violating securities law if they should have know the information was confidential

question

Important insider trading legislation

answer

1. Insider trading sanctions act of 1984 & Insider trading and securities fraud enforement act of 1988 2. Under these laws: a broker dealer must establish written policies and enforce them to stop insider trading 3. Chinese walls are one example, but there have not been established proceedures

question

Restricted watch lists

answer

1. Only firms engaged in investment banking are required to maintain watch lists 2. Any trade under investigation must be submitted to FINRA for review by the 15th day of first month in the NEXT quarter

question

Insider trading penalties

answer

1. Civil - three times the amount gained (or loss avoided) 2a. Criminal - Individuals - $5 million fine or 20 years in prison 2b. Criminial - Corporation - $25 million fine

question

Office of supervisory jurisdiction

answer

Office where: market making strucuturing of offerings or private placements Maintain custody of customers' funds Final acceptance of new accounts Final approval of marketing material

question

SEC 'bounties'

answer

1. Just like an insider trading 'finders fee'. Paid to the whistleblower in an amount equal up to 10% of the penalty.

question

Written supervisory proceedures

answer

1. Offices are to maintain a written supervisory proceedures manual that is available upon request to employees. Amendments must be available for three years.

question

Currency transaction reports

answer

FinCEN form 104. 1. Used to all cash transactions to a single customer that exceed 10k. 2. Filed when cash is sent/received 3. Wire transfers above 3k must be tracked

question

FinCen form 101

answer

Suspicious activity report. Established by the Bank Secrecy Act 1. Filed by institution with a transaction involving at least 5k. Filed w/in 30 days of activity discovery

question

Minimum required customer information

answer

US citizens: clients name, date of birth, address, and taxpayer id Non-US citizen: Taxpayer ID, passport number, govt id

question

Money laundering penalties

answer

1. Notify employer in writing of intention to open accounts 2. Send duplicate confirmations to employer, if requested 3. Notify the person who you're opening an account with

question

Selling away - NASD 3040

answer

1. Selling investment products outside the firm. 2. Brokerage firm must be notified and log the transaction in their books. 3. If approved, reps may receive compensation...it just needs to be 'above board'

question

Rule 10b-5

answer

1. Three year statute of limitations 2. Ommisions are considered guilty 3. ITSFEA (84') - created chinese walls. Needed for banking, research, arbitrade only. Investigated trade notice must be submitted to FINRA in one week. Results sumbitted 15th day start of following quarter.

question

Rule 10b-18

answer

Non-tender stock buyback 1. Can use only one broker dealer for each trading session. (day v. night) 2. Cant be first trade of day or w/in last half hour 3. Can't buy higher than current independent spread. 4. 25% ADTV limit, except for one block trade 5. If market was suspended, volume and timing rules are relaxed for that day (or follwing if the market was closed the whole day)

question

Block trade

answer

1. 200k or more 2. More than 5k shares with value greather than 50k. 3. 20 round lots above 150% of trading volume.

question

NYSE rule 77

answer

Prohibited dealings for members. 1. Buy or sell on 'stop' outside of trading range. 2. Buy at the close of market 3. Buy or sell dividends. 4. Bet on the course of the market.

question

What is an OSJ

answer

Office of supervisory jurisdiction. 1. Market making / execution 2. Structuring 3. Custody of funds/securities 4. Final acceptance on new accts . NOT - effecting transactions

question

Branch office

answer

1. Where securities are effected 2. Induce or attempt to induce teh purchase or sale of securities ***Both branch and OSJ offices must be inspected annually***

question

FINRA Rule 3011

answer

1. Member firm must have a anti- money laundering process in place. 2. Must be tested annually. (unless firm doesn't act as an agent for customer trades (proprietary only))

question

FinCEN form 104

answer

1. Must report all trades over $10,000 2. Must collect information about all wires over $3,000.

question

Anti money-laundering penalties

answer

Maximium of 20 years or a fine up to 500k OR twice the amount of money involved. (the book is really vague around this point)

question

New accounts by registered reps

answer

Executing firm (where account will be at) must: 1. Notify the employer 2. Send duplicate confirmations 3. Notify registered rep. that these proceedures will be followed. ***The employee must notify both the executing firm and their employer of their intention to open an account***

question

Private security trnastactions

answer

Called 'selling away'. Defined by arranging transactions outside an employees regular course of duty. 1. Employee must notify employer and employer must put on their books. 2. Even in the rep is NOT compensated, certain conditions may apply.

question

Sharing in acounts

answer

An employee may share in a customers account if: 1. Employee has made a contribution to account. 2. Sharing is in relation to contribution 3. Employee received permission from firm carrying account.

question

FINRA reporting requirements

answer

Member firm must report: 1. Any violation of securities law 2. Theft or misappropriation 3. Arrent / arraingment / conviction 4. Any discipline over $2.5k or resulting in a fine.

question

Disciplinary proceedings

answer

If a complain is filed, the defendent has 25 days to respond. After a second request they have 14 days to respond. 1. Firs step - hearing (if requested), led by an attorney. Hearing panel can pretty much impose any sanction. 2. National Adjudicatory Council - NAC. Appeal filed w/in 25 days. If customer in involved, a majority of NAC panel will be OUTSIDE the securities industry 3. Simplified arbitration is used for disputes less than 25k. 4. Fines are due within 25 days.

question

Escrow accounts

answer

1. Must be used in an all-or-none / mini-maxi deal 2. Or used when funds are not immediately transfered to client in an best efforts deal. 3. A seperate bank must be used.

question

Stand-by rights offering

answer

Syndicate agrees to purchases left-over right (not purchased by common share holders) on a firm committment basis. Stand-by = underwriter has liability for unsold shares.

question

Jump ball

answer

When a syndicate uses an institutional pot in which shares will be available on a jump ball basis, it is setting aside shares for institutional clients and allowing all members to compete for orders. The profit is allocated based on each member's sales. The institutions that receive allocations generally designate which underwriter(s) are credited with the sale. The manager is often capped on the amount of credits it could earn. If the pot agreement is fixed, the credit is based on the original risk percentages. The manager will often deliver the shares directly to the institutional clients; this bookkeeping is referred to as a Manager Bill and Deliver.

question

Stabalizing bid in an IPO

answer

The highest stabalizing bid in an IPO is the public offering price. Although stabilization is a price-influencing activity intended to induce others to purchase the offered security, when appropriately regulated it is an effective mechanism for fostering an orderly distribution of securities and promotes the interests of shareholders, underwriters, and issuers. (SEC release

question

Rule 104 (Part 1)

answer

Stabalizing bids. Must notify the buyer that the purpose is a stabalizing bid. Usually the market maker or specialist. Happens at the offer price Considered pegging, fixing, or maintaining the price of a security.

question

Rule 104 (Part 2)

answer

1. Priority must be given to an independent bid, when stabalization in occuring. 2. No more than one stabalizing bid in the market at once. 3. Stabalization can not happen higher than the last independent bid.

question

Greenshoe

answer

15% of the offering. May come from secondary shareholders.

question

Underwriting spread

answer

Difference between the amount paid by the investing public and the amount received by the corporation. Shared by managers, syndicate members, and selling group members.

question

Market-out clause

answer

Events that occur that allow the underwriter to cancel its committment.

question

At-the-market

answer

Securities sold based on secondary market prices. Illegal to represent an offering is at-the-market unless an independent market exists.

question

Federal covered security

answer

Listed on NYSE, Nasdaq, AMEX, and mutual funds.

question

Consent to service of process

answer

Form that regulators in a state may require to be filed to sell covered securities in their state.

question

Can a research analyst talk to a customer about an IPO.

answer

YES. After the deal has been publicly announced. Has to be fair and unbaised, and the conversation can't have an investment banker involved.

question

Can a research analyst talk to personnel about an investment banking transaction?

answer

Yes. No investment banking personnel can be present.

question

Quiet period

answer

1. After S-1 filed but BEFORE declared effective. No one may discuss offering. 2. After trading begins, on an IPO, the quiet period is 40 days for managers involved in the IPO, including insiders. 25 days for syndicate members. 3. Secondary quiet period is 10 days. 4. Lockup quiet period is 15 days BEFORE and AFTER lockup expires.

question

Quiet period exception.

answer

Secondary offering quiet period doesn't apply to actively traded securities.....those that have an average daily tradiing voluem of at least 1 mm and the public float of common stock is above $150 mm

question

Booster shot reports.

answer

Favorable reports near the end of a lock-up period. There is now a 15 day quiet period before and after a lock-up expiration.

question

New issue rule.

answer

1. Restricted persons (offiers, directors, employees, member firms and employees), can not buy shares in IPO's of equity securities sold under a registration statement. 2. They CAN buy non-ipos, including: a. Secondaries b. ALL debt, incl. convertible. c. Preferred stock and rights. d. Inv. company offerings e. Direct participation and REITs. f. Except securities under 1933.

question

Direct participation program.

answer

A pass through investment that allows the issuer to take advantage of the cash-flow and tax characteristics of the underlying investment. Usually real estate or gas investments.

question

Selling away.

answer

A registered rep is involved in selling securities outside the normal course of business. If she is not compenstated, she must only notify the member firm. If she's compensated, she must receive approval.

question

Direct participation continued

answer

1. Rep can not make discretionary trades to buy DPP's unless the client has given written permission. 2. Also must judge a. Clients ability to realize tax benefits b. Financial resources to assume illiquidity c. Suitability standards.

question

Shelf registration requirements

answer

Key shelf registration qualification criteria include $75 million market capitalization held by outsiders, timely SEC filings, investment-grade ratings of debt, no defaults on debt payments, and listing on national stock exchanges

question

WKSI requirements.

answer

A WKSI is a company that has filed all annual, quarterly and current reports in a timely manner, and either has a greater than $700 million market capitalization or has issued $1 billion in registered debt offerings over the past three years

question

How long is a shelf registration effective?

answer

3 years

question

Section 11 defense.

answer

1. If there is a misstatement in the registration statement, the signers and directors of the company can be held liable. Liability is regardless of knowledge or intent. Potential Section 11 defendants include the issuer, directors, underwriters and accountants. They can claim that adequate due diligence was done and there was not way they could have known. This is more complicatded than this flash card.

question

What is capital surplus?

answer

Capital surplus is used to account for the capital that a firm raises in excess of the par value (nominal value) of the shares (common stock). Taken together, common stock (and sometimes preferred stock) issued and paid plus capital surplus represent the total amount actually paid by investors for shares when issued (assuming no subsequent adjustments or changes).

question

What is treasury stock?

answer

Treasury stock is the shares that a company buys back from its shareholders on the open market. Since a company cannot be its own shareholder, the possession of such shares is not shown as an asset on the balance sheet. Instead, the repurchased shares are held in treasury for future re-issuance and reported as a contra account to other shareholder-equity accounts on the balance sheet. Alternatively, repurchased shares can be retired at the time of repurchase, and thus no treasury stock is reported in the balance sheet.

question

Penalty bid

answer

An arrangement that permits the managing underwriter to reclaim a selling concession otherwise accruing to a syndicate member (or to a selected dealer or selling group member) in connection with an offering when the securities originally sold by the syndicate member are purchased in syndicate covering transactions Penalty bids must be reported to the manager of an exchange.

question

Syndicate short positions

answer

1. Are created from syndicates overselling. Can be covered by the green shoe. If not, then the syndicate is naked short. 2. Syndicate covering transactions DO NOT need to be reported.

question

Director attendance.

answer

Must be disclosed if a director doesn't attend 75% of the board meetings.

question

Bring down due dilligence.

answer

Last due dilliegnce meeting before an issue is priced.

question

Piggyback registration

answer

1. An investors shares are included in any registration that the comopany performs for the same class of security. These are negotiated rights. a. I.E, some underwriters limit the amount of piggy-backed shares sold as secondary shares in an IPO.

question

Demand registration

answer

Investors have the right to demand that their shares are registred. Effectively requiring the company to complete an IPO. This RARELY happens.

question

Carry over basis

answer

1. If an item is gifted, the receiver values the asset at the basis of the originatl purchaser.

question

IRC § 1014(a)

answer

Stepped up basis upon transfer to benefactor. 1. If you receive assets from a relative that has passed away, your basis in the property is equal to the fair market value of the property.

question

Describe tax effect of a stock sale on the selling company.

answer

From an accounting perspective, the business's assets and liabilities are not adjusted, they continue to be carried and/or depreciated in the same manner as before the transaction. From a tax perspective, the seller recognizes a gain or loss based on the difference between the sales price and his or her current basis in the stock.

question

What is an asset sale?

answer

Buyer just picks certain assets of the target. The assets are marked up to the fair market value at the time of purchase.

question

Red herring (preliminary prospectus). What is on it?

answer

1. Purpose of the issue 2. Proposed offering price range; 3. Disclosure of any option agreement; 4. Underwriter's commissions and discounts; 5. Promotion expenses; 6. Net proceeds to the issuing company (issuer); 7. Balance sheet 8. Income statements for last 3 years, if available; 9. Names and address of all officers, directors, underwriters and stockholders owning 10% or more of the current outstanding stock; 10. Copy of the underwriting agreement; 11. Legal opinion on the issue; 12. Copies of the articles of incorporation of the issuer.

question

Days Sales Outstanding

answer

Accounts Receivable / Sales *365

question

Dividend payments

answer

1. Declaration date 2. ex-divident date - set two business days before the record date (set by exchanges). You don't get divident if you buy ON or AFTER this day. 3. Record date. All holders on record get dividend. 4. Payment date. The date the dividend will be paid.

question

Short form merger

answer

If you own 90% of a corporation, you can affect a merger at will....meaning there is NO shareholder vote. The exact percentage required varies by state.

question

Two-step merger.

answer

1. Tender offer for a majority of firm. 2. After a majority is acquired, vote for a merger with the 'acquiring firm' The one-step cash merger, on the other hand, requires shareholders' approval, so the target must prepare and file a proxy statement with the SEC and deliver it to shareholders at least a month before the meeting. This process can take as long as 90 days, during which the deal is vulnerable.

question

Free writing prospectus

answer

1. A term sheet that is an offer to sell securities. a. Can only be used by a WKSI or seasoned issuer. b. NOT a penny stock issuer, shell company, or blank check company. Must be kept on record for three years.

question

Rule 163 and 164.

answer

Free writing prospectus. Rule 433 allows a term sheet to be filed as a free writing prospectus. Free writing prospetus must have legend. WKSI can use a free writing prospectus BEFORE a registration statement. Season issuers can use a free writing AFTER a registration.

question

Can non-reporting and unseasoned issuers use a free writing prospectus?

answer

YES! 1. After the registraiton 2. They must include a statutory prospectus too.

question

S-Corp features

answer

1. 100 max shareholders 2. Must be U.S. citizends 3. shareholders must be individuals, estates, or trusts, 4. one class of stock 5. corporation must be domestic. 6. corporation can be part of large corporate family. Distributions over owners basis are treated as capital gains. Losses increase basis.

question

Partnerships

answer

1. any partner can bind entity 2. all partners have equal vote 3. one partner is liable for other partners share.

question

Test to become a REIT

answer

1. 95% of gross income derived from rfinancial investments, 75% from real estate related activities 2. Established as a trust 3. distribute 90% of its income 4. At least 100 shareholders. 5 or fewer can not own more than 50% in the last half of taxable year.

question

Unlimited business liability

answer

1. Happens from sole properietorships and general partnerships.

question

When do sharehoders for the acquirer get to vote for / against the acquisition?

answer

Traditionally, exchange requirements only state that votes need to occur when securities are issued in conjuction with deal equal or exceed pre-transaction common shares outstanding.

question

Auction process

answer

Teaser, CA, CIM, DR, Mgt Presentations, Collect Bids, bid accept, def agreement

question

Real estate in an M&A deal.

answer

Be wary of the book value of real estate in an M&A deal. IT worth far more money, thus affecting the purchase price.

question

Current Ratio

answer

Current Assets / Current Liabilities

question

Who runs a creditors committee during bankruptcy?

answer

The largest unsecured creditor.

question

What is a 363 sale?

answer

Court allows debtor to sell assets outside of bankruptcy court that are free of liens. Must have a sound business justification for this

question

Can reits pass through losses to shareholders?

answer

No! REITS are not pass through entities.

question

Customer complaints

answer

Must be reported on a quarterly basis and kept for three years.

question

Is stabalizing a manipulative activity?

answer

Yes! Stabalizing is considered a manipulative activity.

question

ROIC for series 79

answer

Net income - dividends / total capital

question

What is the best valuation method for an IPO?

answer

Discounted Cash Flows

question

Cap on reguation A selling shareholders.

answer

$1.5 million

question

Once customer suitability is determined

answer

Supervisor approval to trade is not needed.

question

Special inactive service

answer

Military dute for FINRA registered reps. Can receive transaction related compensation, but is prohibited from servicign clients. Also, the time period for continuing education is put on hold (both firm and regulatory)

question

Best REIT valuation metrics

answer

FFO and EBITDA

question

For outside business activities, what must be given/received from firm?

answer

Just written notification. No permission in necessary. Passive investments are except from this rule.

question

When can registered reps avoid arbitration?

answer

In discrepancies involving non-business activities. I.e, sexual/racial discrimination or harassment.

question

Horizontal Merger v. Market Extension Merger.

answer

Horizontal merger, companies are in direct competition with the SAME products and services.

question

Rule 103 / PSMM

answer

Passive market making. A PSMM quote means that the bid is from another passive market maker. This does not count as the highest independt price for stabilization purposes.

question

Rule 13f-1

answer

A money manager who has discretion over $100mm in equity securities is requied to file a quarterly statements with the SEC.

question

Who has the LEAST liability in an insider trading suit

answer

1. The broker-dealer (if they have no awareness tha the trade was based on material nonpublic information)

question

What can the trustee do in a Ch. 7 bankruptcy?

answer

1. Trustee is appointed to handle the liquidation of the firm. The trustee may attempt to recover payments made in the last 90 days...or operate the business for a short while, if it will benefit creditors

question

Can a member firm sell its own shares to customers?

answer

1. Yes. 2. Can place in a discretionary account if it has written notification from the customer.

question

Stock acquired by an underwriter as compensation

answer

Can not be sold for a period of six months from the effective date. Options or warrants received as compensation may be exercised at any time.

question

What is OTCBB?

answer

NOT an automatic quotation system.

question

Gun jumping safe harbor

answer

The SEC permits ongoing business communications for reporting issuers by allowing the publication of regularly released factual business information such as business and financial developments, advertisements about products or services, and dividend notices. The information in a business release by a reporting company is considered to be factual business information and may contain forward-looking (pro forma) statements. It is not an offer to sell provided the issuer is an S-3 or F-3 reporting company. Factual information may include information contained in SEC filings, information about the issuer's products or services and forward-looking statements (provided the information is contained in statements filed with the SEC). Information related to forward-looking statements may include projections of revenue, earnings, losses, capital expenditures, dividends, capital structure, management plans and objectives for future operations

question

What is a colar?

answer

A colar is a price range used in an M&A transaction.

question

What rule governs and exchange of securities?

answer

Rule 145 involved the relassification of securities, acquisitions, consolidations, or transfers of assets.

question

Rule 137 of 1933 act.

answer

Quiet periods do NOT apply to firms that are not involved in an offering.

question

Non-equivalent securities under the 1933 act.

answer

Underwriters of nonconvetible debt may recommend common stock and / or vice versa. In this case, a research report is not considered an offer to sell the debt issue.

question

What is a designated market maker?

answer

A specialist on the floor of the NYSE who's job it is to maintain a fair and orderly market on the floor of the NYSE.

question

Market Maker (i.e. NASDAQ)

answer

Is responsible for maintaining firm quotes and executing orders that are entered into the Nasdaq Market Center Execution system.

question

What is a bond's 'basis'

answer

A bond's basis its its yield-to-maturity

question

OTB bulletin basics

answer

The SEC permits ongoing business communications for reporting issuers by allowing the publication of regularly released factual business information such as business and financial developments, advertisements about products or services, and dividend notices. The information in a business release by a reporting company is considered to be factual business information and may contain forward-looking (pro forma) statements. It is not an offer to sell provided the issuer is an S-3 or F-3 reporting company. Factual information may include information contained in SEC filings, information about the issuer's products or services and forward-looking statements (provided the information is contained in statements filed with the SEC). Information related to forward-looking statements may include projections of revenue, earnings, losses, capital expenditures, dividends, capital structure, management plans and objectives for future operations

question

If a shelf registration is filed using on a s-1, then.....

answer

The registration statement is only effective for 2 years.

question

What and who is the 'debtor in possesion'

answer

The debtor in possesion is the company management. The debtor maintains possesion and controll of the assets while in reorganization. The debtor is a fiduciary and must act in the best interests of creditors.

question

What is a section 341 meeting

answer

A creditors meeting.

question

Shelf registration

answer

Rule 415 1. No limit to securities file on a shelf. 2. WKSI can omit a plan of distribution and a description of the securities registered.

question

Free writing prospectus

answer

1. Can be issued by eligible and inelibible compaies. 2. Includes: press releases, emails, prelim or final term sheets, marketing materials.

question

Rule 163 and 164

answer

163 - a WKSI may use a prelim prospectus prior to filing the registration statement. Rule 433 - issuer (if wksi) is allowed to use a term sheet for each offering off a shelf, if the term sheet is filed as a free writing prospectus and filed for 3 years. MUST contain a legend on how to obtain a real prospectus.

question

Rule 134

answer

Communication NOT deemed a prospectus 1. issuers can publish a simple advertisement (considered a tombstone) 2. Basic information, including price, date, identiry, and selling shareholders

question

Rule 168 and 169

answer

Gun-jumping provisions 1. Anyone can issue regularly released factual business information 2. Information about the offering IS NOT included in the safe harbor. 3. Participants in the offering do not count!! NOT Sure if this is right!!! 4. Companies can communicate with the public 30 days before the filing of an IPO registration statement.

question

Regulation S-K (Part 1)

answer

1. Used for forward looking communications NOT included w/in the financial statements of a company. 2. must include a reasonable basis for the issuers projections. 3. Review must be done by an expert. 4. Must disclose if the number of BOD meetings in the last year....must disclose if any BOD member didn't attend 75% of the meetings.

question

Regulation S-K (Part 2)

answer

1. If non gap measurements are used...then the company must publish a reconciliation w/ gaap.

question

Regulation S-X

answer

1. Sets the form and content of finacial statements 2. Financial statements become stale at 135 days. 130 days for a WKSI. 3. 10a - audit must incuded system to catch illegal act and related party transactions AND is the issuer a going concern

question

Rule 139

answer

If the registrant is a WKSI or a 1934 reporting company, the broker dealer ca publish any research report.

question

Rule 137

answer

1. can publish report if broker not involved in offering and its part of your regular course of business. 2. company could not have been a blacnk check, penny, or shell compay in any of the last three years.

question

Rule 138

answer

1. IF registration is for non-convertible security AND the broker dealer is an underwriter, they still may issue a report on nonequivalent securities.

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