Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Series 7 by Chapter > New Issue Marketplace for Equities > Flashcards

New Issue Marketplace for Equities Flashcards

1
Q

A Regulation A+ Tier 1 exemption is permitted for issuers that raise no more than $__________ over 12 months.

A

A Regulation A+ Tier 1 exemption is permitted for issuers that raise no more than $20 million over 12 months.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The highest price at which a stabilizing bid may be placed is the ________________________.

A

The highest price at which a stabilizing bid may be placed is the public offering price (POP).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

True or False: Stabilization is designed to artificially raise the price of a new issue.

A

False. Stabilization is designed to support or keep a new issue’s price from falling.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

The holding period for unregistered (restricted) securities under Rule 144 is __________.

A

The holding period for unregistered (restricted) securities under Rule 144 is 6 months.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Is there a maximum number of stabilizing bids that may be placed?

A

Yes, one. It is usually placed by the syndicate manager.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Once Form 144 is filed, owners have __________ to sell their securities.

A

Once Form 144 is filed, owners have 90 days to sell their securities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

True or False: Canadian companies are not eligible to use the Regulation A+ exemption.

A

False. Both U.S. and Canadian companies are eligible to use the Regulation A+ exemption.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The ____________________ is the disclosure document concerning a Regulation A issue.

A

The Offering Circular is the disclosure document concerning a Regulation A issue.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A ___________ underwriting is used for shares not purchased through a rights offering.

A

A Stand-by underwriting is used for shares not purchased through a rights offering.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

The Green Shoe Clause allows the issuer to expand the offering by a maximum of ____%.

A

The Green Shoe Clause allows the issuer to expand the offering by a maximum of 15%.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Accredited investors have net worth of at least $_________ or pre-tax income in each of the last two years of $________.

A

Accredited investors have net worth of at least $1,000,000 or pre-tax income in each of the last two years of $200,000.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

True or False: The SEC judges an offering’s investment merit and provides approval.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Indications of interest are _______________ on both the customer and BD.

A

Indications of interest are non-binding on both the customer and BD.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

The ___________ clause gives underwriters the ability to buy additional shares from the issuer to cover over-allotments.

A

The Green Shoe clause gives underwriters the ability to buy additional shares from the issuer to cover over-allotments.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

True or False: If a registration statement has not been filed with the SEC, BDs may not discuss new issue information.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

In a firm commitment underwriting, unsold securities are retained by ________________.

A

In a firm commitment underwriting, unsold securities are retained by the syndicate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

True or False: Form 144 must be filed for any sale of restricted or control stock, regardless of the size.

A

False. If a sale is for 5,000 shares or fewer, and has a market value of $50,000 or less, no notification is required.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Rule 144A exempts sellers from the holding period and volume limitations of Rule 144 if trading is done with a _____.

A

Rule 144A exempts sellers from the holding period and volume limitations of Rule 144 if trading is done with a QIB.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

For how long may a new issue be sold under a shelf registration?

A

Up to 3 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What does Rule 145 of the Securities Act of 1933 cover?

A

Registration/prospectus requirements of any reclassification of securities (primarily from mergers or acquisitions).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

True or False: Blue-Sky Laws apply to broker-dealers and agents operating within a state.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

True or False: Receiving shares of a new entity created from a publicly traded company is done through stock dividends.

A

False. Receiving shares of a newly created entity is done through a spin-off.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What are the requirements to qualify for a Tier 2 exemption under Regulation A+?

A

A maximum offering of $50 million over 12 months, with no more than $15 million being offered by selling shareholders

24
Q

Reclassifications, merger or consolidation activities, and transfers of assets are regulated under what provision?

A

Rule 145

25
Q

QIBs are financial institutions that have at least $_________________ invested in securities of non-affiliated issuers.

A

QIBs are financial institutions that have at least $100 million invested in securities of non-affiliated issuers.

26
Q

What are the requirements to qualify for a Tier 1 exemption under Regulation A+?

A

A maximum offering of $20 million over 12 months, with no more than $6 million being offered by selling shareholders

27
Q

In a best-efforts underwriting, unsold securities are retained by ______________.

A

In a best-efforts underwriting, unsold securities are retained by the issuer.

28
Q

List the securities that are exempt from registration. 5

A
  1. Government/Municipal bonds
  2. commercial paper,
  3. bankers’ acceptances,
  4. bank issues,
  5. non-profit and small business issues
29
Q

True or False: BDs and their employees may buy shares of equity IPOs from the syndicate.

A

False. They are considered restricted.

30
Q

What type of underwriting is cancelled if the entire issue is not sold?

A

All-or-None

31
Q

The final ________ _____ will not appear in a red herring.

A

The final offering price will not appear in a red herring.

32
Q

An offering of shares of the issuer and selling shareholders (e.g., officers) is a _____________________ offering.

A

An offering of shares of the issuer and selling shareholders (e.g., officers) is a combined primary/secondary offering.

33
Q

True or False: 100% of investors must be state residents to qualify for the Rule 147 intrastate exemption.

A

True

34
Q

What is the rule that issuers must follow to qualify for the Rule 147 intrastate exemption?

A

80% of assets located in-state, 80% of revenue produced in-state, and 80% of proceeds raised are used in-state.

35
Q

Underwriters that have made a firm commitment to an issuer are acting in a ________________ capacity.

A

Underwriters that have made a firm commitment to an issuer are acting in a principal/dealer capacity.

36
Q

What is the difference between a syndicate member and a firm in the selling group?

A

Syndicate members assume liability, while firms in the selling group do not.

37
Q

What type of underwriting is cancelled if a specified portion is not sold?

A

Mini-max

38
Q

What is the maximum sale allowed under Rule 144?

A

1% of the outstanding shares or average trading volume over the last 4 weeks - whichever is greater

39
Q

The private placement disclosure document is the _____________________.

A

The private placement disclosure document is the Offering Memorandum.

40
Q

Does Rule 144 require a specific holding period for control stock?

A

No, but the SEC must be notified when a sell order is placed and volume limitations apply.

41
Q

What rules govern the registration of an issue in any state in which it will be offered?

A

Blue-Sky Laws

42
Q

Though some securities are exempt from registration, nothing is exempt from the ____________ provisions of the Act.

A

Though some securities are exempt from registration, nothing is exempt from the anti-fraud provisions of the Act.

43
Q

Are immediate family members of member firm employees always restricted from purchasing equity IPOs?

A

Not if the individual receives no material support and is not purchasing from the firm employing their family member

44
Q

According to the Equity IPO Rule, firms must update the eligibility of purchasers ___________ .

A

According to the Equity IPO Rule, firms must update the eligibility of purchasers annually.

45
Q

A Regulation A+ Tier 2 exemption is permitted for issuers that raise no more than $__________ over 12 months.

A

A Regulation A+ Tier 2 exemption is permitted for issuers that raise no more than $50 million over 12 months.

46
Q

____________ is the only form of price manipulation allowed by the SEC.

A

Stabilization is the only form of price manipulation allowed by the SEC.

47
Q

The New Issue Rule covers what new issues?

A

All equity IPOs

48
Q

During the registration cooling-off period, what should an agent do if a client sends a check to purchase securities?

A

Return the check to the customer

49
Q

True or False: Shelf Registration gives flexibility to the issuer by allowing delayed or continuous sales.

A

True

50
Q

Under Reg. D private placement, ___ is the maximum number of non-accredited investors allowed.

A

Under Reg. D private placement, 35 is the maximum number of non-accredited investors allowed.

51
Q

Securities issued under the intrastate exemption may not be sold outside the state until ____________ have passed.

A

Securities issued under the intrastate exemption may not be sold outside the state until 9 months have passed.

52
Q

May a preliminary prospectus (red herring) be sent during the cooling-off period?

A

Yes. The red herring is used to obtain indications of interest from potential purchasers.

53
Q

A new company created from an existing division of a publicly traded parent company is known as a _________.

A

A new company created from an existing division of a publicly traded parent company is known as a spin-off.

54
Q

QIB stands for ___________________________.

A

QIB stands for Qualified Institutional Buyer (QIB).

55
Q

Besides BDs and their employees, who else is restricted from purchasing equity IPOs?

A

An employee’s immediate family if materially supported by, or sharing household with, the employee

56
Q

Underwriters operating under a best-efforts agreement with an issuer are acting in a ________________ capacity.

A

Underwriters operating under a best-efforts agreement with an issuer are acting in a agency/broker capacity.

Series 7 by Chapter (24 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions