Series 24
Form 144 must be filed with the SEC
concurrently with the sale or earlier.
within 10 days of the sale
5 days before the sale - correct answer ✔✔concurrently with the sale or earlier.
Form 144, which alerts the SEC to the impending sale of unregistered or control stock, must be filed
concurrently with or before the sale. The form must also be filed as amended if there is an inaccuracy or
to indicate a change in broker.
For an additional issue offering where the subject security is quoted by the OTC Markets Group, the
prospectus delivery requirement period is
90 days
60 days
40 days
25 days - correct answer ✔✔40
The prospectus delivery requirement periods in the aftermarket are as follows: for IPOs, 90 days if the
security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq. For additional
issues, there is no requirement to deliver a prospectus in the secondary market if the security is listed
NYSE or Nasdaq. Once the distribution is complete, there is no further obligation to deliver a prospectus.
If the security is non-Nasdaq OTC, the prospectus delivery requirement period is 40 days.
A company's board of directors has authorized senior management to proceed with a public offering of
senior debt securities. Following submission of the registration statement, which of the following
documents must contain the legend "subject to completion or amendment"?
,red herring
form 144
form t - correct answer ✔✔red herring
The legend "subject to completion or amendment" must be printed in red on a preliminary prospectus
(red herring). SEC Schedule 14A is filed to provide financial information and other important procedures
for shareholders meetings
All of the following are requirements of a Rule 506(b) offering under Regulation D except
the sale is limited to a total of 35 investors.
the issue is not advertised to the general public.
all nonaccredited investors are sophisticated - correct answer ✔✔the sale is limited to a total of 35
investors.
In a Rule 506(b) offering, an issuer that is free of "bad actors" can sell to an unlimited number of
accredited investors. However, there can be no more than 35 nonaccredited investors in any single
offering. All investors must receive a copy of the offering memorandum, and all nonaccredited investors
must be sophisticated. In addition, nonaccredited investors must be permitted to use a purchaser
representative to help them evaluate the investment. Certain advertising, if limited in scope, is
permitted. Advertising to the general public is strictly prohibited. Rule 506(c) prohibits nonaccredited
investors.
A member firm, in return for letting a customer buy shares of a new issue at the public offering price,
requests that the customer buy at least 500 additional shares in the secondary market within two weeks
of the issuer's effective date. This action is
permitted
,prohibited - correct answer ✔✔prohibited
Tie-in arrangements are considered fraud under the Act of 1934 and are strictly prohibited.
Which of the advertising or sales promotion activities described below would be permitted in
conjunction with a Rule 506(b) private placement
Blanket mailing of a magazine reprint sent by a broker-dealer to all of the firm's customers that is highly
favorable to the issuing corporation
Announcement of a private placement and invitation to attend an investment information meeting sent
to a select group of institutional investors - correct answer ✔✔Announcement of a private placement
and invitation to attend an investment information meeting sent to a select group of institutional
investors
The SEC's rule centers on keeping private placements out of the general public's view. Any advertisement
or promotion that solicits buying interest in private placement securities and can be freely seen or read
by average investors violates SEC rules governing the terms under which these distributions are
permitted.
Under SEC rules, all of the following would be considered accredited investors except
an individual with annual income of $500,000 for the last two year with an expectation of continued
earnings at that level.
an officer of the issuer with annual income of $100,000.
an individual with a personal net worth of $200,000. - correct answer ✔✔an individual with a personal
net worth of $200,000.
Under SEC rules, an accredited investor is an institution, an individual with annual income of $200,000 or
more (with an expectation of continued earnings), an individual with a net worth of $1 million or more,
, exclusive of the net equity of their primary residence, or any officer or director of the issuer. In joint
accounts, the income threshold is $300,000.
Under SEC Rule 10b-13, all of the following would be prohibited from tendering shares except
an investor long call options
an investor long stock.
an investor short against the box.
an investor short stock - correct answer ✔✔an investor long stock.
To tender stock, a customer must be long the stock. Being long call options does not satisfy this
requirement unless the customer has issued exercise instructions. If a customer is short against the box,
the customer's net position is zero.
Regulation A requires an underwriting broker-dealer to furnish an offering circular to purchasers
concurrently with the mailing of the customer confirmation.
24 hours before the confirmation.
24 hours before the confirmation. - correct answer ✔✔24 hours before the confirmation.
Regulation A requires that an offering circular be provided to purchasers at least 48 hours in advance of
sales.
A public reporting company is looking to offer securities privately under a safe harbor exemption found
in Regulation D Section 506(b). Which of the following statements is most accurate regarding this
planned offering
Form 144 must be filed with the SEC
concurrently with the sale or earlier.
within 10 days of the sale
5 days before the sale - correct answer ✔✔concurrently with the sale or earlier.
Form 144, which alerts the SEC to the impending sale of unregistered or control stock, must be filed
concurrently with or before the sale. The form must also be filed as amended if there is an inaccuracy or
to indicate a change in broker.
For an additional issue offering where the subject security is quoted by the OTC Markets Group, the
prospectus delivery requirement period is
90 days
60 days
40 days
25 days - correct answer ✔✔40
The prospectus delivery requirement periods in the aftermarket are as follows: for IPOs, 90 days if the
security is non-Nasdaq and 25 days if the security is to be listed or quoted over Nasdaq. For additional
issues, there is no requirement to deliver a prospectus in the secondary market if the security is listed
NYSE or Nasdaq. Once the distribution is complete, there is no further obligation to deliver a prospectus.
If the security is non-Nasdaq OTC, the prospectus delivery requirement period is 40 days.
A company's board of directors has authorized senior management to proceed with a public offering of
senior debt securities. Following submission of the registration statement, which of the following
documents must contain the legend "subject to completion or amendment"?
,red herring
form 144
form t - correct answer ✔✔red herring
The legend "subject to completion or amendment" must be printed in red on a preliminary prospectus
(red herring). SEC Schedule 14A is filed to provide financial information and other important procedures
for shareholders meetings
All of the following are requirements of a Rule 506(b) offering under Regulation D except
the sale is limited to a total of 35 investors.
the issue is not advertised to the general public.
all nonaccredited investors are sophisticated - correct answer ✔✔the sale is limited to a total of 35
investors.
In a Rule 506(b) offering, an issuer that is free of "bad actors" can sell to an unlimited number of
accredited investors. However, there can be no more than 35 nonaccredited investors in any single
offering. All investors must receive a copy of the offering memorandum, and all nonaccredited investors
must be sophisticated. In addition, nonaccredited investors must be permitted to use a purchaser
representative to help them evaluate the investment. Certain advertising, if limited in scope, is
permitted. Advertising to the general public is strictly prohibited. Rule 506(c) prohibits nonaccredited
investors.
A member firm, in return for letting a customer buy shares of a new issue at the public offering price,
requests that the customer buy at least 500 additional shares in the secondary market within two weeks
of the issuer's effective date. This action is
permitted
,prohibited - correct answer ✔✔prohibited
Tie-in arrangements are considered fraud under the Act of 1934 and are strictly prohibited.
Which of the advertising or sales promotion activities described below would be permitted in
conjunction with a Rule 506(b) private placement
Blanket mailing of a magazine reprint sent by a broker-dealer to all of the firm's customers that is highly
favorable to the issuing corporation
Announcement of a private placement and invitation to attend an investment information meeting sent
to a select group of institutional investors - correct answer ✔✔Announcement of a private placement
and invitation to attend an investment information meeting sent to a select group of institutional
investors
The SEC's rule centers on keeping private placements out of the general public's view. Any advertisement
or promotion that solicits buying interest in private placement securities and can be freely seen or read
by average investors violates SEC rules governing the terms under which these distributions are
permitted.
Under SEC rules, all of the following would be considered accredited investors except
an individual with annual income of $500,000 for the last two year with an expectation of continued
earnings at that level.
an officer of the issuer with annual income of $100,000.
an individual with a personal net worth of $200,000. - correct answer ✔✔an individual with a personal
net worth of $200,000.
Under SEC rules, an accredited investor is an institution, an individual with annual income of $200,000 or
more (with an expectation of continued earnings), an individual with a net worth of $1 million or more,
, exclusive of the net equity of their primary residence, or any officer or director of the issuer. In joint
accounts, the income threshold is $300,000.
Under SEC Rule 10b-13, all of the following would be prohibited from tendering shares except
an investor long call options
an investor long stock.
an investor short against the box.
an investor short stock - correct answer ✔✔an investor long stock.
To tender stock, a customer must be long the stock. Being long call options does not satisfy this
requirement unless the customer has issued exercise instructions. If a customer is short against the box,
the customer's net position is zero.
Regulation A requires an underwriting broker-dealer to furnish an offering circular to purchasers
concurrently with the mailing of the customer confirmation.
24 hours before the confirmation.
24 hours before the confirmation. - correct answer ✔✔24 hours before the confirmation.
Regulation A requires that an offering circular be provided to purchasers at least 48 hours in advance of
sales.
A public reporting company is looking to offer securities privately under a safe harbor exemption found
in Regulation D Section 506(b). Which of the following statements is most accurate regarding this
planned offering
