Series 24 - 1(B)
A Florida investor purchases securities under a Rule 147 offering. After six
months he may:
A) Only sell the shares to a customer who a resident of the state
B) Sell the shares to out-of-state customers
C) Only sell the shares to an accredited investor
D) Only sell the shares to a QIB - correct answer ✔B) Sell the shares to out-
of-state customers
EC Rule 147 covers an exemption from registration for the sale of securities
on an intrastate basis. A purchaser of stock under Rule 147 is not allowed to
sell the securities to a nonresident of the state for a period of six months
following the last date of sale by the issuer. This restriction is removed after
six months. Individuals who wish to sell the securities prior to six months may
do so only to a resident of the same state. (88617)
Which of the following statements is TRUE concerning stabilization?
A) An unlimited number of shares may be purchased
B) There may be 2 or more stabilizing bids
C) The managing underwriter may only purchase up to 15% of the deal due to
Green Shoe restrictions
D) Stabilizing is only permitted for follow-on offerings in listed securities -
correct answer ✔A) An unlimited number of shares may be purchased
The SEC defines stabilizing as the placing of any bid or the effecting of any
purchase for the purpose of pegging, fixing, or otherwise maintaining the price
of a security. As its definition implies, the act of stabilizing is manipulative.
However, if performed in accordance with Rule 104 of Regulation M,
stabilizing is allowed so that the benefits of an orderly distribution of securities
can be realized.
The highest price at which a stabilizing bid could be entered is the public
offering price. The syndicate may only have one (not multiple) stabilizing bids,
, which is generally placed by the manager. Although there is only one
stabilizing bid permitted, there is no limit as to the number of stabilizing
purchases that may be made. The managing underwriter is required to notify
the principal market that it will be placing a stabilizing bid. In addition, under
Rule 104, stabilizing is prohibited in an at-the-market offering. (82344)
If an investor purchased securities through an underwriter in a public offering,
he's in violation of Regulation M if he sold the securities short within how
many days preceding the pricing?
A) No more than one business day
B) No more than two business days
C) No more than five business days
D) No more than 10 business days - correct answer ✔C) No more than five
business days
Rule 105 of Regulation M stipulates that it's a violation for any person to sell a
security short that's the subject of an offering and then purchase the offered
security from the underwriter if the short sale was executed during the period
that begins five business days prior to the pricing of the offering and ends with
the pricing of the issue. If the pricing of the offering occurs within five business
days of the filing of the registration statement, then the Rule 105 restriction
applies from the filing date until the pricing of the issue. (39230)
The BOD of a listed issuer is considering taking the company private. Which
of the following is TRUE?
A) This activity requires the approval from FINRA and the filing of a Reg. D
disclosure form
B) The issuer must reduce the number of voting shareholders below 100
before it can go private
C) Schedule 13 E-3 must be filed with the SEC
D) All current shareholders must be given the opportunity to own the private
stock - correct answer ✔C) Schedule 13 E-3 must be filed with the SEC
A Florida investor purchases securities under a Rule 147 offering. After six
months he may:
A) Only sell the shares to a customer who a resident of the state
B) Sell the shares to out-of-state customers
C) Only sell the shares to an accredited investor
D) Only sell the shares to a QIB - correct answer ✔B) Sell the shares to out-
of-state customers
EC Rule 147 covers an exemption from registration for the sale of securities
on an intrastate basis. A purchaser of stock under Rule 147 is not allowed to
sell the securities to a nonresident of the state for a period of six months
following the last date of sale by the issuer. This restriction is removed after
six months. Individuals who wish to sell the securities prior to six months may
do so only to a resident of the same state. (88617)
Which of the following statements is TRUE concerning stabilization?
A) An unlimited number of shares may be purchased
B) There may be 2 or more stabilizing bids
C) The managing underwriter may only purchase up to 15% of the deal due to
Green Shoe restrictions
D) Stabilizing is only permitted for follow-on offerings in listed securities -
correct answer ✔A) An unlimited number of shares may be purchased
The SEC defines stabilizing as the placing of any bid or the effecting of any
purchase for the purpose of pegging, fixing, or otherwise maintaining the price
of a security. As its definition implies, the act of stabilizing is manipulative.
However, if performed in accordance with Rule 104 of Regulation M,
stabilizing is allowed so that the benefits of an orderly distribution of securities
can be realized.
The highest price at which a stabilizing bid could be entered is the public
offering price. The syndicate may only have one (not multiple) stabilizing bids,
, which is generally placed by the manager. Although there is only one
stabilizing bid permitted, there is no limit as to the number of stabilizing
purchases that may be made. The managing underwriter is required to notify
the principal market that it will be placing a stabilizing bid. In addition, under
Rule 104, stabilizing is prohibited in an at-the-market offering. (82344)
If an investor purchased securities through an underwriter in a public offering,
he's in violation of Regulation M if he sold the securities short within how
many days preceding the pricing?
A) No more than one business day
B) No more than two business days
C) No more than five business days
D) No more than 10 business days - correct answer ✔C) No more than five
business days
Rule 105 of Regulation M stipulates that it's a violation for any person to sell a
security short that's the subject of an offering and then purchase the offered
security from the underwriter if the short sale was executed during the period
that begins five business days prior to the pricing of the offering and ends with
the pricing of the issue. If the pricing of the offering occurs within five business
days of the filing of the registration statement, then the Rule 105 restriction
applies from the filing date until the pricing of the issue. (39230)
The BOD of a listed issuer is considering taking the company private. Which
of the following is TRUE?
A) This activity requires the approval from FINRA and the filing of a Reg. D
disclosure form
B) The issuer must reduce the number of voting shareholders below 100
before it can go private
C) Schedule 13 E-3 must be filed with the SEC
D) All current shareholders must be given the opportunity to own the private
stock - correct answer ✔C) Schedule 13 E-3 must be filed with the SEC
