Series 24- Regulations
Regulation SHO - correct answer ✔Regulates the practice of selling short.
The order tickets must be marked long or short and there must be a locate if
short sale. Defines a threshold security as a fail to deliver that has existed for
5 consecutive days. Firms must close out the fail on the 14th business day.
Short positions must be reported to FINRA twice a month.
Regulation M - correct answer ✔created to prohibit manipulative conduct by
people that have an interest in the outcome of an offering. Sets a restricted
periods for IPOs (1 day prior to pricing or 5 days prior to pricing). Also sets a
daily purchase limit for passive market makers (greater of 30% ADTV or 200
shares).
Regulation A+ - correct answer ✔Two tiers of public offerings where offering
circulars must be provided. Tier 1= max of $20 million in 12 months where 6
million are sold by existing shareholders. Tier = max $50 million and 15 can
be sold by existing shareholders.
Rule 147 - correct answer ✔Intrastate offerings are exempt from registering
if satisfy 1 of the 80% "doing business requirements." Resales to people
outside the state are restricted for 6 months.
Regulation D - correct answer ✔Private Placements. Rule 504 is that the
maximum offering of $5 million can have an unlimited number of investors.
Rule 506 is that the maximum size is unlimited, but only 35 unaccredited
investors.
Rule 144 - correct answer ✔Sale of Restricted and Control Stock. Restricted
stock= 6 month holding period. Maximum sale allowed is the greater of 1%
outstanding shares or 4 week average trading volume.
Regulation SHO - correct answer ✔Regulates the practice of selling short.
The order tickets must be marked long or short and there must be a locate if
short sale. Defines a threshold security as a fail to deliver that has existed for
5 consecutive days. Firms must close out the fail on the 14th business day.
Short positions must be reported to FINRA twice a month.
Regulation M - correct answer ✔created to prohibit manipulative conduct by
people that have an interest in the outcome of an offering. Sets a restricted
periods for IPOs (1 day prior to pricing or 5 days prior to pricing). Also sets a
daily purchase limit for passive market makers (greater of 30% ADTV or 200
shares).
Regulation A+ - correct answer ✔Two tiers of public offerings where offering
circulars must be provided. Tier 1= max of $20 million in 12 months where 6
million are sold by existing shareholders. Tier = max $50 million and 15 can
be sold by existing shareholders.
Rule 147 - correct answer ✔Intrastate offerings are exempt from registering
if satisfy 1 of the 80% "doing business requirements." Resales to people
outside the state are restricted for 6 months.
Regulation D - correct answer ✔Private Placements. Rule 504 is that the
maximum offering of $5 million can have an unlimited number of investors.
Rule 506 is that the maximum size is unlimited, but only 35 unaccredited
investors.
Rule 144 - correct answer ✔Sale of Restricted and Control Stock. Restricted
stock= 6 month holding period. Maximum sale allowed is the greater of 1%
outstanding shares or 4 week average trading volume.
