STC SERIES 66 COMPREHENSIVE EXAM UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔Registration by Filing (notification) (follow on interstate offering) - ✔✔Issuers must
meet stringent financial requirements and conditions such as: registration statement
previously filed under 33 act, in business at least 36 months, security held by more then
500 persons, at least 4 market makers, underwriting commissions May not exceed 10%,
offering price is at least $5 per share
✔✔Registration by filing (notification) registration date - ✔✔Effective the same time as
the federal registration
✔✔Registration by Coordination (likely IPOs) - ✔✔State registration is coordinated with
the federal registration under the 33 act, along with registration statement the issuer
submits a consent to service a process and a significant amount of additional
information, issuers must submit a copy of the latest prospectus with the SEC
✔✔Registration by coordination effective date - ✔✔Becomes effective the same time as
the federal registration
✔✔Registration by Qualification (intrastate offerings) - ✔✔Requirements are determined
by the individual state, no federal registration is required, may be used in any state for
any type of security, extensive disclosures required by administrator, with correcting
amendments sent for inaccuracies
✔✔Registration by qualification effective date - ✔✔Determined by administrator
✔✔All registration statements are effective for - ✔✔At least one year from their effective
date
✔✔General Registration Provisions - ✔✔Filing Fees, Effective for 1 year from the
effective date, disclose amount of securities being offered in a state, disclose the other
states in which a registration statement has been filed. (Administrator may require a
prospectus to be sent to any person to whom an offer is made)
✔✔Actions against registration - ✔✔-The registration is incomplete or contains false or
misleading information
-The issuer's enterprise is illegal
-The offering may be fraudulent
-The issuer, a partner, officer, or director of the issuer, or an underwriter has willfully
violated any provision of the USA
-The underwriter's compensation is unreasonable
-The proper fee hasn't been paid
,✔✔Stop order against an effective registration - ✔✔Cannot be issued based on facts
the administrator knew when the registration became effective unles proceedings are
instituted within 30 days
✔✔Exempt securities - ✔✔Typically based on the safety of the investment. Treasury
bonds, municipal bonds, foreign government bonds, commercial paper, stock/bonds
from banks and federal covered securities
✔✔Exempt transactions - ✔✔Typically based on the limited purchasers. private
placements and trades between institutions (between issuer and underwriter)
✔✔Securities exemptions - ✔✔B - banks and savings and loans
R - securities issued by railroads
I - insurance policies ( but stocks, bonds and similar securities of insurance companies
not exempt)
N - not for profit organizations
G - government issued securities
S - short term commercial paper with a maturity date of 9 months or less
✔✔Federal Covered Securities - ✔✔Securities listed on an exchange, issued by an
investment company (mutual fund) , issued under reg D, securities sold to qualified
purchasers (owns 5 million in securities)
✔✔Even if exempt from registration - ✔✔Securities remain subject to the anti-fraud
provisions of both federal law and the USA
✔✔Under NSMIA - ✔✔Any securities that are classified as federally covered are given a
specific state registration exemption
✔✔Notice filing - ✔✔Although exempt from registration, issuers of INVESTMENT
COMPANY shares and PRIVATE PLACEMENTS under Reg D Rule 506 are subject to
Notice Filling with the Administrator which involves
-Filing copies of any offering documents (prospectuses) that have been filed with the
SEC
-Filing a consent to service of process
-Payment of a fee
✔✔A notice filing is - ✔✔NOT a method of registration which can be denied by an
administrator
✔✔Exempt transactions - ✔✔Non issuer transactions, private placements, institutional
transactions, fiduciary transactions, mortgage backed
✔✔non-issuer transaction - ✔✔A secondary market transaction.
, ✔✔Private placements - ✔✔-Limited to no more than 10 non-institutional investors
-Purchases must be made for investment purposes only
-No commission paid for soliciting non-institutional investors
✔✔Institutional transitions - ✔✔Those with banks, BDs, or other financial institutions
(insurance, trust, or investments companies between issuer and underwriter
✔✔Fiduciary transactions - ✔✔Those involving a trustee, administrator, executor, or
sheriff
✔✔Mortgage-backed - ✔✔Transactions in bonds that are secured by real estate
mortgages (if sold as a unit)
✔✔Broker dealer - ✔✔Any person in the business of effecting securities transactions for
the accounts of others (agency) or for its own account (principal)
✔✔Agent - ✔✔An individual who represents a B/S in effecting securities transactions is
always an agent subject to registration (all officers, partners, or directors of a B/D who
are involved in the sale of securities, clerical jobs are not included)
✔✔Issuer - ✔✔Any person that issues or proposes to issue any security for the purpose
of raising capital
✔✔agent of issuer - ✔✔An individual who represents an issuer in the sale of certain
securities is not required to register as an agent if the sale involves an exempt
transaction, federal covered security, or a transaction with existing employees, partners,
or directors of the issuer and no commission is paid for soliciting
✔✔Two types of agents - ✔✔Registration is always required for broker dealers buy
registration MAY BE required for an agent of an issuer
✔✔These are NOT broker-dealers (excluded) - ✔✔Agents, issuers, banks, saving
institutions, trust companies, a person with no place of business in a state and only
transacts business there with: issuers involved in the transaction, other broker dealers
or financial institutions, and existing clients who are no residents of the state
✔✔If a firm is a broker dealer - ✔✔The state registration is required
✔✔Agent exemptions (Agents may engage in securities transactions in a state in which
they are not registered if:) - ✔✔1. Existing customer is temporarily visiting a another
state (students, vacationers)
2. Existing customer moves to a new state and
a. Agent's registration is pending in a new state
b. Agent is registered in at least one other state
QUESTIONS AND ANSWERS GRADED A+
✔✔Registration by Filing (notification) (follow on interstate offering) - ✔✔Issuers must
meet stringent financial requirements and conditions such as: registration statement
previously filed under 33 act, in business at least 36 months, security held by more then
500 persons, at least 4 market makers, underwriting commissions May not exceed 10%,
offering price is at least $5 per share
✔✔Registration by filing (notification) registration date - ✔✔Effective the same time as
the federal registration
✔✔Registration by Coordination (likely IPOs) - ✔✔State registration is coordinated with
the federal registration under the 33 act, along with registration statement the issuer
submits a consent to service a process and a significant amount of additional
information, issuers must submit a copy of the latest prospectus with the SEC
✔✔Registration by coordination effective date - ✔✔Becomes effective the same time as
the federal registration
✔✔Registration by Qualification (intrastate offerings) - ✔✔Requirements are determined
by the individual state, no federal registration is required, may be used in any state for
any type of security, extensive disclosures required by administrator, with correcting
amendments sent for inaccuracies
✔✔Registration by qualification effective date - ✔✔Determined by administrator
✔✔All registration statements are effective for - ✔✔At least one year from their effective
date
✔✔General Registration Provisions - ✔✔Filing Fees, Effective for 1 year from the
effective date, disclose amount of securities being offered in a state, disclose the other
states in which a registration statement has been filed. (Administrator may require a
prospectus to be sent to any person to whom an offer is made)
✔✔Actions against registration - ✔✔-The registration is incomplete or contains false or
misleading information
-The issuer's enterprise is illegal
-The offering may be fraudulent
-The issuer, a partner, officer, or director of the issuer, or an underwriter has willfully
violated any provision of the USA
-The underwriter's compensation is unreasonable
-The proper fee hasn't been paid
,✔✔Stop order against an effective registration - ✔✔Cannot be issued based on facts
the administrator knew when the registration became effective unles proceedings are
instituted within 30 days
✔✔Exempt securities - ✔✔Typically based on the safety of the investment. Treasury
bonds, municipal bonds, foreign government bonds, commercial paper, stock/bonds
from banks and federal covered securities
✔✔Exempt transactions - ✔✔Typically based on the limited purchasers. private
placements and trades between institutions (between issuer and underwriter)
✔✔Securities exemptions - ✔✔B - banks and savings and loans
R - securities issued by railroads
I - insurance policies ( but stocks, bonds and similar securities of insurance companies
not exempt)
N - not for profit organizations
G - government issued securities
S - short term commercial paper with a maturity date of 9 months or less
✔✔Federal Covered Securities - ✔✔Securities listed on an exchange, issued by an
investment company (mutual fund) , issued under reg D, securities sold to qualified
purchasers (owns 5 million in securities)
✔✔Even if exempt from registration - ✔✔Securities remain subject to the anti-fraud
provisions of both federal law and the USA
✔✔Under NSMIA - ✔✔Any securities that are classified as federally covered are given a
specific state registration exemption
✔✔Notice filing - ✔✔Although exempt from registration, issuers of INVESTMENT
COMPANY shares and PRIVATE PLACEMENTS under Reg D Rule 506 are subject to
Notice Filling with the Administrator which involves
-Filing copies of any offering documents (prospectuses) that have been filed with the
SEC
-Filing a consent to service of process
-Payment of a fee
✔✔A notice filing is - ✔✔NOT a method of registration which can be denied by an
administrator
✔✔Exempt transactions - ✔✔Non issuer transactions, private placements, institutional
transactions, fiduciary transactions, mortgage backed
✔✔non-issuer transaction - ✔✔A secondary market transaction.
, ✔✔Private placements - ✔✔-Limited to no more than 10 non-institutional investors
-Purchases must be made for investment purposes only
-No commission paid for soliciting non-institutional investors
✔✔Institutional transitions - ✔✔Those with banks, BDs, or other financial institutions
(insurance, trust, or investments companies between issuer and underwriter
✔✔Fiduciary transactions - ✔✔Those involving a trustee, administrator, executor, or
sheriff
✔✔Mortgage-backed - ✔✔Transactions in bonds that are secured by real estate
mortgages (if sold as a unit)
✔✔Broker dealer - ✔✔Any person in the business of effecting securities transactions for
the accounts of others (agency) or for its own account (principal)
✔✔Agent - ✔✔An individual who represents a B/S in effecting securities transactions is
always an agent subject to registration (all officers, partners, or directors of a B/D who
are involved in the sale of securities, clerical jobs are not included)
✔✔Issuer - ✔✔Any person that issues or proposes to issue any security for the purpose
of raising capital
✔✔agent of issuer - ✔✔An individual who represents an issuer in the sale of certain
securities is not required to register as an agent if the sale involves an exempt
transaction, federal covered security, or a transaction with existing employees, partners,
or directors of the issuer and no commission is paid for soliciting
✔✔Two types of agents - ✔✔Registration is always required for broker dealers buy
registration MAY BE required for an agent of an issuer
✔✔These are NOT broker-dealers (excluded) - ✔✔Agents, issuers, banks, saving
institutions, trust companies, a person with no place of business in a state and only
transacts business there with: issuers involved in the transaction, other broker dealers
or financial institutions, and existing clients who are no residents of the state
✔✔If a firm is a broker dealer - ✔✔The state registration is required
✔✔Agent exemptions (Agents may engage in securities transactions in a state in which
they are not registered if:) - ✔✔1. Existing customer is temporarily visiting a another
state (students, vacationers)
2. Existing customer moves to a new state and
a. Agent's registration is pending in a new state
b. Agent is registered in at least one other state
