CANADIAN SECURITIES
COURSE EXAM
What is a greensheet? - ANSWERS-It highlights the most noticeable
features of the new issue, both pros and cons.
What odes the passport system do? - ANSWERS-It gives issuers
streamlined access to the capital markets in multiple jurisdictions
instead of having to file in each one.
What activates are permitted during the waiting period? - ANSWERS-
Underwriters can solicit interest from potential purchasers of the
security. They can also advertise the issue.
When does a prospectus become Blue-skyed? - ANSWERS-Once the
final form prospectus is approved. It then may be distributed to the
investing public.
What details will be on the offering? - ANSWERS-1) Cover page
disclosure
2) Summary
3) info relating to the issuer
4) Info relating to the securities
5) Infor relating to the officers and shareholders
,6) Info relating to the parties involved.
What is a market-out clause? - ANSWERS-It permits the underwriter
to cancel an offering without penalty under certain conditions such as
the issue becoming unsaleable due to changes in market conditions.
What is the purpose of the short form prospectus system? When can it
be used? - ANSWERS-It shortens and streamlines the procedures for
qualified issuers to access Canadian Securities markets through
prospectus offerings. It can be used when it electronically files under
SEDAR, when it is reporting an issue in at least once Canadian
jurisdiction, when it has filed a annual financial statement in at least
one Canadian jurisdiction.
List and explain the 3 types of after-market stabilization activities. -
ANSWERS-1) Greenshoe option: allows the dealer to issue 15%
more shares than originally planned. Used when demand is high. If
demand is low they will buy back the shares.
2) Penalty bid: When the lead underwriter penalizes other dealers if
their customers flip shares in weak issues.
3) Stabilizing bid: When the dealer posts a bid to purchase shares at a
price not exceeding the offer price if distribution of share is not
complete.
Describe escrowed shares. - ANSWERS-When a company decides to
offer an incentive to an underwriter to provide risk capital as a
principal. Escrowing shares ties the value of the shares held by
shareholders to what happens to the property used to obtain these
shares.
,How does a capital pool company work? - ANSWERS-It is a way for
emerging businesses to obtain financing earlier in their development
for companies with no assets other than cash and no established
business. A prospectus if filed and shares list on the TSX.V. The issuer
must raise between $200k-$400k.
What is crowdfunding? - ANSWERS-The process of raising start up
capital by getting contributions from the public, usually online.
What does a company agree upon when signing a listing agreement? -
ANSWERS-They must submit annual and interim financial reports,
notify the exchange about dividends, sales of new issues, and notify
the exchange of other proposed material changes in the company's
affairs.
What are the advantages and disadvantages of listing? - ANSWERS-
Advantages: Prestige and Goodwill, enhanced and visible market
value, more info available, simplified valuation for tax purposes.
Disadvantages: Additional controls on management, need to keep
market participants informed, market indifference, additional costs
and disclosure to the company.
Compare a delayed opening, halt in trading, and a suspension in
trading. - ANSWERS-A delayed opening is the heavy influx of buy or
sell orders. The delay gives exchanges time to organize the orders to
align buyers with sellers. A halt in trading can be ordered at any time
to allow reporting of significant news. A suspension of trading can be
, imposed for various reasons such as the company's financial condition
may not meet the exchange's requirements.
What does an Investment Dealer do? - ANSWERS-Acts as
intermediaries between investors and users of capital.
When a Investment Dealer is acting as Primary, what are they doing?
- ANSWERS-Selling securities from their own inventory. Make
money via spread/underwriting.
When an investment dealer is acting as agents, what are they doing? -
ANSWERS-Facilitating a trade between a buyer and seller, without
owning the security. They make money via commissions.
What are the three types of Investment dealers? - ANSWERS-Retail
firms, Institutional firms, and Integrated firms.
Give a brief description of retail firms. - ANSWERS-Includes full
service investment dealers and self directed brokers.
Give a brief description of Institutional firms. - ANSWERS-They
serve institutional clients and organizations that trade large volumes
like pension funds.
Give a brief description of Integrated firms. - ANSWERS-Offer
products and services that participate in both retail and institutional
COURSE EXAM
What is a greensheet? - ANSWERS-It highlights the most noticeable
features of the new issue, both pros and cons.
What odes the passport system do? - ANSWERS-It gives issuers
streamlined access to the capital markets in multiple jurisdictions
instead of having to file in each one.
What activates are permitted during the waiting period? - ANSWERS-
Underwriters can solicit interest from potential purchasers of the
security. They can also advertise the issue.
When does a prospectus become Blue-skyed? - ANSWERS-Once the
final form prospectus is approved. It then may be distributed to the
investing public.
What details will be on the offering? - ANSWERS-1) Cover page
disclosure
2) Summary
3) info relating to the issuer
4) Info relating to the securities
5) Infor relating to the officers and shareholders
,6) Info relating to the parties involved.
What is a market-out clause? - ANSWERS-It permits the underwriter
to cancel an offering without penalty under certain conditions such as
the issue becoming unsaleable due to changes in market conditions.
What is the purpose of the short form prospectus system? When can it
be used? - ANSWERS-It shortens and streamlines the procedures for
qualified issuers to access Canadian Securities markets through
prospectus offerings. It can be used when it electronically files under
SEDAR, when it is reporting an issue in at least once Canadian
jurisdiction, when it has filed a annual financial statement in at least
one Canadian jurisdiction.
List and explain the 3 types of after-market stabilization activities. -
ANSWERS-1) Greenshoe option: allows the dealer to issue 15%
more shares than originally planned. Used when demand is high. If
demand is low they will buy back the shares.
2) Penalty bid: When the lead underwriter penalizes other dealers if
their customers flip shares in weak issues.
3) Stabilizing bid: When the dealer posts a bid to purchase shares at a
price not exceeding the offer price if distribution of share is not
complete.
Describe escrowed shares. - ANSWERS-When a company decides to
offer an incentive to an underwriter to provide risk capital as a
principal. Escrowing shares ties the value of the shares held by
shareholders to what happens to the property used to obtain these
shares.
,How does a capital pool company work? - ANSWERS-It is a way for
emerging businesses to obtain financing earlier in their development
for companies with no assets other than cash and no established
business. A prospectus if filed and shares list on the TSX.V. The issuer
must raise between $200k-$400k.
What is crowdfunding? - ANSWERS-The process of raising start up
capital by getting contributions from the public, usually online.
What does a company agree upon when signing a listing agreement? -
ANSWERS-They must submit annual and interim financial reports,
notify the exchange about dividends, sales of new issues, and notify
the exchange of other proposed material changes in the company's
affairs.
What are the advantages and disadvantages of listing? - ANSWERS-
Advantages: Prestige and Goodwill, enhanced and visible market
value, more info available, simplified valuation for tax purposes.
Disadvantages: Additional controls on management, need to keep
market participants informed, market indifference, additional costs
and disclosure to the company.
Compare a delayed opening, halt in trading, and a suspension in
trading. - ANSWERS-A delayed opening is the heavy influx of buy or
sell orders. The delay gives exchanges time to organize the orders to
align buyers with sellers. A halt in trading can be ordered at any time
to allow reporting of significant news. A suspension of trading can be
, imposed for various reasons such as the company's financial condition
may not meet the exchange's requirements.
What does an Investment Dealer do? - ANSWERS-Acts as
intermediaries between investors and users of capital.
When a Investment Dealer is acting as Primary, what are they doing?
- ANSWERS-Selling securities from their own inventory. Make
money via spread/underwriting.
When an investment dealer is acting as agents, what are they doing? -
ANSWERS-Facilitating a trade between a buyer and seller, without
owning the security. They make money via commissions.
What are the three types of Investment dealers? - ANSWERS-Retail
firms, Institutional firms, and Integrated firms.
Give a brief description of retail firms. - ANSWERS-Includes full
service investment dealers and self directed brokers.
Give a brief description of Institutional firms. - ANSWERS-They
serve institutional clients and organizations that trade large volumes
like pension funds.
Give a brief description of Integrated firms. - ANSWERS-Offer
products and services that participate in both retail and institutional
