series 7 – regulations Exam 2025
Questions and Answers
U.S. Government agency securities: - ANSWER✔✔-are exempt securities under the
securities act of 1933
The maximum maturity on commercial paper is: - ANSWER✔✔-270 days, because a
longer maturity would cause the issue to be non-exempt
Common carrier issues are:
I exempt from the Securities Act of 1933
II subject to the Securities Act of 1933
III required to be sold with a prospectus
IV not required to be sold with a prospectus - ANSWER✔✔-I and IV
(Common carrier issues such as railway issues are exempt under the Securities Act of
1933 because they were regulated by the Interstate Commerce Commission (I.C.C.)
before the Act was written)
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,All of the following are exempt securities under Securities Act of 1933 EXCEPT: -
ANSWER✔✔-US government bond trust
Which of the following is subject to the registration requirements of the Securities Act of
1933? - ANSWER✔✔-american depository receipts
Which of the following securities is NOT exempt from the Securities Act of 1933? -
ANSWER✔✔-industrial company issues
Which of the following activities are allowed prior to the filing of a registration
statement?
I Solicitations of indications of interest
II Solicitations of orders
III Sending a preliminary prospectus
IV Publishing a tombstone announcement - ANSWER✔✔-none of the above
Which of the following activities are permitted after the registration statement is filed?
I Solicitation of indications of interest for the issue in registration
II Solicitation of orders for the issue in registration
III Sending a preliminary prospectus to a customer about the issue in registration
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,IV Publishing a tombstone announcement for the issue in registration - ANSWER✔✔-I,
III, IV
A registered representative has prepared a research report about a new stock issue that
is currently in registration. The registered representative wishes to send the report to
customers. Which statement is TRUE? - ANSWER✔✔-the report constitutes an offer
under the 1933 act and cannot be sent
When the Securities and Exchange Commission sets the effective date for a new issue in
registration, this means that the: - ANSWER✔✔-proper documents for registration have
been filed w the SEC
When a customer buys a new stock issue from a syndicate member, the customer pays: -
ANSWER✔✔-the POP as stated in the prospectus without any commission
Credit can be extended on new issues: - ANSWER✔✔-after 30 days have elapsed from
the completion of the offering
Which SEC rule gives an exemption to offerings of no more than $50 million within a 12
month time frame? - ANSWER✔✔-reg A
Which statement is TRUE regarding Regulation A+? - ANSWER✔✔-offerings are
limited to a max size of $50,000,000
(Regulation A is intended to make it easier for smaller issuers to raise capital. There are
2 "tiers" to the rule. Tier 1 gives an exemption from registration to offerings of no more
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, than $20 million in a 12 month period. Tier 2 (also called Regulation A+) requires more
detailed information, including audited financial statements, and can be used for
offerings of up to $50 million. While no prospectus is required, each buyer must be
given disclosure in an Offering Circular.)
Which statements are TRUE regarding purchase limitations under Regulation A?
I Tier 1 offerings are subject to purchase limitations
II Tier 1 offerings are not subject to purchase limitations
III Tier 2 (Regulation A+) offerings are subject to purchase limitations
IV Tier 2 (Regulation A+) offerings are not subject to purchase limitations -
ANSWER✔✔-II and III
(Tier 2 offerings (up to $50 million, also known as Regulation A+ offerings) are subject
to purchase limitations only for non-accredited purchasers. (Regulation D - the private
placement exemption - sets the requirements for "accredited" investors - these are
wealthy individuals.) Non-accredited investors buying a Tier 2 Regulation A offering
cannot invest an amount that is the greater of 10% of that person's annual income or net
worth. Note that there is no similar limitation on Tier 1 purchases)
A company that has just completed its Initial Public Offering has raised $200 million of
capital and has been listed on the NYSE. How long must the company wait in order to
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
Questions and Answers
U.S. Government agency securities: - ANSWER✔✔-are exempt securities under the
securities act of 1933
The maximum maturity on commercial paper is: - ANSWER✔✔-270 days, because a
longer maturity would cause the issue to be non-exempt
Common carrier issues are:
I exempt from the Securities Act of 1933
II subject to the Securities Act of 1933
III required to be sold with a prospectus
IV not required to be sold with a prospectus - ANSWER✔✔-I and IV
(Common carrier issues such as railway issues are exempt under the Securities Act of
1933 because they were regulated by the Interstate Commerce Commission (I.C.C.)
before the Act was written)
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,All of the following are exempt securities under Securities Act of 1933 EXCEPT: -
ANSWER✔✔-US government bond trust
Which of the following is subject to the registration requirements of the Securities Act of
1933? - ANSWER✔✔-american depository receipts
Which of the following securities is NOT exempt from the Securities Act of 1933? -
ANSWER✔✔-industrial company issues
Which of the following activities are allowed prior to the filing of a registration
statement?
I Solicitations of indications of interest
II Solicitations of orders
III Sending a preliminary prospectus
IV Publishing a tombstone announcement - ANSWER✔✔-none of the above
Which of the following activities are permitted after the registration statement is filed?
I Solicitation of indications of interest for the issue in registration
II Solicitation of orders for the issue in registration
III Sending a preliminary prospectus to a customer about the issue in registration
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,IV Publishing a tombstone announcement for the issue in registration - ANSWER✔✔-I,
III, IV
A registered representative has prepared a research report about a new stock issue that
is currently in registration. The registered representative wishes to send the report to
customers. Which statement is TRUE? - ANSWER✔✔-the report constitutes an offer
under the 1933 act and cannot be sent
When the Securities and Exchange Commission sets the effective date for a new issue in
registration, this means that the: - ANSWER✔✔-proper documents for registration have
been filed w the SEC
When a customer buys a new stock issue from a syndicate member, the customer pays: -
ANSWER✔✔-the POP as stated in the prospectus without any commission
Credit can be extended on new issues: - ANSWER✔✔-after 30 days have elapsed from
the completion of the offering
Which SEC rule gives an exemption to offerings of no more than $50 million within a 12
month time frame? - ANSWER✔✔-reg A
Which statement is TRUE regarding Regulation A+? - ANSWER✔✔-offerings are
limited to a max size of $50,000,000
(Regulation A is intended to make it easier for smaller issuers to raise capital. There are
2 "tiers" to the rule. Tier 1 gives an exemption from registration to offerings of no more
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, than $20 million in a 12 month period. Tier 2 (also called Regulation A+) requires more
detailed information, including audited financial statements, and can be used for
offerings of up to $50 million. While no prospectus is required, each buyer must be
given disclosure in an Offering Circular.)
Which statements are TRUE regarding purchase limitations under Regulation A?
I Tier 1 offerings are subject to purchase limitations
II Tier 1 offerings are not subject to purchase limitations
III Tier 2 (Regulation A+) offerings are subject to purchase limitations
IV Tier 2 (Regulation A+) offerings are not subject to purchase limitations -
ANSWER✔✔-II and III
(Tier 2 offerings (up to $50 million, also known as Regulation A+ offerings) are subject
to purchase limitations only for non-accredited purchasers. (Regulation D - the private
placement exemption - sets the requirements for "accredited" investors - these are
wealthy individuals.) Non-accredited investors buying a Tier 2 Regulation A offering
cannot invest an amount that is the greater of 10% of that person's annual income or net
worth. Note that there is no similar limitation on Tier 1 purchases)
A company that has just completed its Initial Public Offering has raised $200 million of
capital and has been listed on the NYSE. How long must the company wait in order to
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
