which statements are true regarding intrastate offerings?

237,500 shares StatusD D. no filing is required with the SEC. Rule 144 allows the sale of the greater of 1% of the outstanding shares or the weekly average of the preceding 4 weeks trading volume every 90 days. Whether or not the purchaser received a preliminary prospectus is a moot point - any purchaser must get the final prospectus at, or prior to, confirmation of sale. While no prospectus is required, each buyer must be given disclosure in an Offering Circular. SEC Regulation Crowdfunding sets the ground rules for these offerings. Under the "access equals delivery" rule, prospectuses can be delivered electronically to customers as long as the member firm knows that the customer has internet access. This offering is a(n): September 27th 200,000 shares There are 2 "tiers" to the rule. Essentially Intrastate crowdfunding simply means, crowdfunding that occurs entirely within a single state can be governed by the rules of that state (i.e. Regulation D permits a private placement to be sold to a maximum of 35 non-accredited investors and an unlimited number of accredited (wealthy and institutional) investors. The best answer is D. Prior to the filing of a registration statement for a new issue, nothing can be done. IV Rule 144A permits issuers to sell tradeable private placement units to individual investors September 6th StatusD D. Foreign Government Debt. IV secondary distribution the first date that a new issue can be sold to the public under the provisions of the Securities Act of 1933. StatusD D. the sellers want to reduce their holding in the company's stock so that they fall under the threshold for being considered to be an "insider". ADRs are the way that most foreign corporate issues trade in the United States. If any of the securities are offered or sold to even one out-of-state person, the exemption may be lost. Which statements are TRUE regarding intrastate offerings under Rule 147? WebWhich statements are TRUE regarding intrastate offerings? IV Up to 6 sales per year are allowed H0:12;H1:1>2, the federal regulation aimed at curbing manipulation and fraud in the new issue market. September 20th Correct Answer B. the amount of stock held by the selling shareholders was restricted and was too large an amount to sell under the provisions of Rule 144 September 6th 17,000 shares a private placement investor under Regulation D who is not wealthy enough to be "accredited." An investor owns 20% of the outstanding shares of ABC Corporation, a publicly traded company. 1 year Which of the following securities are NOT required to be registered with the SEC? Correct Answer A. I or III, whichever is greater The best answer is C. StatusD D. 280,000 shares. I Intrastate offerings are subject to Federal registration Which statement is TRUE about insurance coverage on customer brokerage accounts maintained at banks registered solely as municipal securities dealers? Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. StatusC C. II and III A company must determine the residence of each offeree and purchaser. It is only available to "seasoned" companies that already have completed a registered IPO, that have been registered for 1 year, and that have a minimum market captialization of $75 million. However, the offerer must set up a password-protected website and can only allow access to accredited investors. StatusC C. II and III Correct B. I and IV All of the following statements are true about Regulation A offerings EXCEPT: StatusB B. I and IV No registration is required. 485,000 shares A seller who has filed Form 144 can sell 1% of the outstanding shares or the weekly average of the last 4 weeks' trading volume whichever is greater. Business entertainment does not fall under the $100 gift limit. StatusA A. I and II only The idea here is that people could attempt to get around the 35 non-accredited investor limit by having these non-accredited investors contribute to a trust that would buy the issue. This offering is a(n): 490,000 shares If the spouse wishes to sell her holding, which of the following statements are TRUE? StatusC C. solicitation of orders to buy is restricted to customers expressing interest within the past 10 days Correct C. I and IV Oct. 30th September 13th StatusB B. The only way to resell them is in a "private transaction. of the exempt offering framework to promote capital formation while preserving or enhancing important investor protections. e. What is the pvalue? Incorrect Answer B. Taxes & Tax Shelters: Tax Advantaged Investme, Series 7: Regulations (Other Federal and Stat, Temperature and Pressure Conditions at STP, Regulations: Other Federal and State Regulati, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Transmucosal Drug Delivery I: Bioadhesive Pol. The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. A. An abbreviated registration statement is filed with the SEC (Form S1-A) and the issue must go through a 20 day review period, similar to a regular registered offering. If the Form 144 was filed the preceding week, then the week ending November 12th would not yet have occurred. A registered representative has written discretionary authorization from a customer. IV A registered representative accompanies a customer to a show, for which the representative paid $200 for the tickets 220,000 shares 500,000 shares Do not confuse Rule 144A with Rule 144, which covers the sale of "restricted" and "control" stock in the open market. Go to the Introduction to Business Online ", For an institutional investor to qualify as a "QIB" under Rule 144A, the institution must have at least: d. What is your decision regarding H0? IV purchased by large investors Correct C. Regulation A D. Securities Act of 1933. ", Under Rule 147, intrastate offerings cannot be resold out of state for how long after the initial sale date? Rule 147, as amended, has the following requirements: Securities purchased in an offering under Rule 147 limit resales to persons residing within the state of the offering for a period of six months from the date of the sale by the issuer to the purchaser. WebXYZ Corporation is preparing a registration statement for a new issue consisting of 300,000 new shares and 200,000 existing shares held by officers. StatusC C. The client cannot make the investment because the offering is only available to institutional investors StatusB B. III and IV only III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 When the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements is (are) TRUE? The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). 800,000 shares The best answer is C. Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push the price up). StatusD D. Common Carrier issues. Thus, while the issue is in registration, the issue cannot be offered, sold, advertised, or recommended, and orders to buy the issue cannot be solicited. Rule 144 includes a "de minimis" exemption, permitting the sale every 3 months of 5,000 shares or less, worth $50,000 or less, without having to file a Form 144. D. II and IV. Which statements are TRUE about the use of a "red herring" preliminary prospectus? The best answer is A. II An Offering Memorandum must be delivered to all purchasers II Any purchaser who received a preliminary prospectus need not receive the final prospectus The best answer is D. Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. The proceeds from the secondary distribution go to the selling shareholders. StatusC C. II and III Nov. 5th StatusD D. II and IV. StatusA A. I only occupation. Nov. 12th Correct B. American Depositary Receipts StatusA A. I and II only September 27th 18,000 shares StatusD D. after holding the securities for an additional 1 year. The rule is split into Tier 1 and Tier 2. If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. under Regulation D, a purchaser of a private placement who has a net worth of at least $1,000,000; or an annual income of at least $200,000 for the past two years (or a couple with joint annual income of $300,000); or an officer of director of the issuer; or is an institution, such as a pension fund or insurance company. III FINRA regulation 4.The number of columns and data types must be identical for all SELECT statements in the query. StatusC C. I, II, IV III with no registration with the SEC StatusD D. An unlimited number. II Accepting an indication of interest from the customer The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. There is no restriction on resales within that state. Correct D. II and IV. In the United States, an intrastate offering is a securities offering that can only be purchased in the state in which it is being issued. Incorrect Answer B. the public offering price as stated in the prospectus plus a mark-up There are no purchase limitations on Tier 1 (up to $20 million) Regulation A offerings. III Proceeds from the sale of 500,000 shares will go to the company The greater amount is 1% of outstanding shares, or 250,000 shares. WebAll of the following statements regarding short term negotiable certificates of deposit are correct EXCEPT: A. the minimum denomination is $100,000B. Correct B. I and IV II Advertisement of the issue If a E-Mail is sent to more than 25 existing or prospective retail customers, then it is defined as a "retail communication," and furthermore, within that broad definition, it is defined as sales literature. StatusD D. II and IV. There is no representation required on the part of the buyer - when the restricted stock is sold through the rule, the buyer receives "clean" unrestricted shares from the transfer agent. Rule 144 allows the sale, every 90 days, of the greater of 1% of the outstanding shares of that company; or the weekly average of the prior 4 week's trading volume. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. Correct Answer B. Under Rule 147, intrastate offerings cannot be resold out of state for how long following completion of the initial offering? II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person Oct. 23rd If an E-Mail is sent to 25 or fewer existing or prospective retail customers, it is defined as correspondence. Restricted stock is stock which was never registered and cannot be sold in the public markets unless registration takes place or an exemption (such as Rule 144) is available. If an issuer complies with all of the provisions of Rule 147, then the issuer will be deemed to have complied with Section 3 (a) (11). C. MSRB Rules This is because Under the 1933 Act, U.S. Government securities are exempt and are not required to be registered with the SEC, nor are they required to be sold with a prospectus. ), Crowdfunding offerings are typically: A director of a publicly held company wants to sell 5,000 registered shares of that company's stock at $8 per share that she has held for 3 months. I for start-up companies StatusA A. Eurodollar Debt An unregistered hedge fund creates a website and uses it to promote itself to investors. Intrastate offerings are exempt from: It could do this by making purchases of that issue in its discretionary accounts. No, because the shares are being sold under a "de minimis" exemption A. The greater amount is 1% of outstanding shares, or 1,000,000 shares. 500,000 shares The 1934 Act does not apply to initial offerings. StatusC C. 3 D. There is no time limitation on the period that a stabilizing bid can be maintained. StatusD D. effective cost to potential purchasers has been established by the SEC. StatusD D. 1,025,000 shares. I Federal registration Choice "a" is incorrect. IV Resale is permitted to state residents only, for the 180 day period following the offering Direct participation programs (limited partnership offerings) are non-exempt securities that must be registered under the Securities Act of 1933 unless an exemption (such as private placement) is obtained. These do not have to complete the 6 month holding period requirement because they are registered, but to sell them, the officer must file a Form 144 Notice of Sale and is subject to the rule's volume restrictions. Intrastate Offerings Defined An intrastate offering can only be purchased in the state it is issued. Nov 14 II Rule 144A limits the amount of restricted securities that can be sold in the public markets Excluding the percentage of the outstanding shares test, the maximum permitted sale under Rule 144 is the weekly average of the last: The 4 weeks' trading to be averaged are: The best answer is A. IV Person buying $150,000 of the issue within 5 years StatusB B. 1 Twitter 2 Facebook 3RSS 4YouTube StatusA A. Search/A-Z Index link and enter the II they are sold on an agency basis Oct. 16th 1,200,000 shares C. II, III, IV III primary distribution StatusD D. An individual investor who buys $2,000,000 of the offering. The registration statement must be amended, and the 20 day cooling off period starts recounting from the date of the amendment filing. StatusA A. StatusC C. II and III StatusA A. I and II II Solicitations of orders Restricted stock is best described by which of the following? III U.S. Government Bonds IV Resale of the securities is not permitted outside that state for 6 months following the initial offering The best answer is D. Since this issue is "in registration," it is in the 20-day cooling off period. Which of the following is defined as an "accredited investor" under Regulation D? The issue can be sold to an unlimited number of "accredited" (wealthy and institutional) investors under this exemption and still be considered a private placement. I American Depositary Receipts Legally, these are not considered to be offers of the security. Solicitation of orders to buy "144" shares is prohibited (to stop you from soliciting potential customers to buy 144 shares, which would tend to push up the stock price). Corporate bonds are non-exempt securities that must be registered with the SEC under the Securities Act of 1933. 17,000 shares StatusC C. Rule 147 StatusB B. StatusD D. II and IV. Correct B. III and IV only Tier 2 offerings Correct A. Thus, the registration for the issue may never "go effective. StatusB B. II and IV IV Any purchaser will pay the Public Offering Price plus a commission or mark-up Incorrect Answer B. Rule 147 is an exemption for an intrastate offering. A sample of 65 observations is selected from one population with a population standard deviation of 0.75. 800,000 shares StatusC C. II and III Rather than having to file a registration statement and complete a 20 day cooling off period for each new securities offering, the issuer files a blanket registration statement with the SEC that goes on the SEC's "shelf" for 3 years. Correct A. I and III II The rule exempts intrastate issues from State registration United Way can sell the stock without restriction: StatusC C. II and III StatusD D. 4 years. Such "QIBs" can buy unregistered private placement blocks and trade them with other "QIBs. Week Ending Volume The best answer is C. Bankers Acceptances are a money market instrument used to finance imports and exports. The best answer is B. The investment minimum is only $2,000 and the investor is not required to meet any income or net worth tests. By using a manager, the stock will be sold in an orderly fashion into the market and the market price of the outstanding shares should not be adversely affected. Correct D. II and III only. Under the Securities Act of 1933, new issues are not marginable until how many days have elapsed from the effective date? I by the seller of the restricted shares Regulation D StatusA A. I and III A "red herring" preliminary prospectus may be sent to any prospective purchaser of that new issue once the issue has entered into the "20 day cooling off" period that commences upon filing of the registration statement with the SEC. Tier 2 offerings allow a maximum of $50 million to be raised, but require audited financial statements. IV The use of the preliminary prospectus does not constitute an offer to sell under the Securities Act of 1933 2.Reversing the order of the intersected tables alters the result. C. Municipal principal in a municipal securities firm is the supervisor of the school board whose bonds the firm is trading Auction Rate Securities are long-term instruments Correct B. a Form D must be filed with the SEC IV Intrastate offerings are exempt from State registration During this time period, the issue may not be sold nor advertised, so neither firm orders, nor deposits can be taken. StatusD D. 90 days. Prior to the "20 day cooling off period," the filing had not been made, so nothing can be done that involves contacting the public about that issue. An indication of interest for a new stock offering is normally taken: StatusA A. I and III Which of the following are defined as "accredited investors" under Regulation D? (b) Describe its shape (skewed left, symmetric, skewed right). For the National Football League, ratings for the all-time leading passers were as shown below. These are private placement securities that are exempt from registration with the SEC. StatusD D. after holding the securities for 3 years. III Resale of the securities is not permitted within that state for 6 months following the initial offering Under the "penny stock rule," an established customer that is exempt from the rule is defined as a person who has: General creditor status in the liquidation is given to any customer claims that are: B. above Securities Investor Protection Corporation coverage limits. StatusA A. I and III 2 weeks' trading volume Specific customer approval is needed for the registered representative to effect which of the following transactions in the customer's account? StatusA A. I and III only IV Accepting a firm order from the customer Additional commissions or charges above the P.O.P. \end{array} Intrastate offerings are exempt from the Securities Act. The rules: require all transactions under Regulation Crowdfunding to take place online through an SEC-registered intermediary, either a broker-dealer or a funding portal permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period Retail communications must be approved in advance by a principal. D. can recommend stocks. StatusA A. seller's representation letter StatusD D. A security which is purchased by an issuer that is not exempt from the provisions of the Securities Acts. Correct A. immediately I Sale of the issue IV sales of restricted stock Oct. 30th Correct B. I, II, III Correct Answer C. II and III Commercial Paper, which is issued by corporations, is not eligible for Fed trading. Finally, the broker must represent that it did not solicit the transaction and that it acted as agent in executing the transaction. $1,000,000 of assets that it invests on a discretionary basis (see Exempt security, Non-exempt security, Prospectus), Which of the following activities are allowed prior to the filing of a registration statement? the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). The interest rate on an Auction Rate Security is reset weekly or monthly Disclosure is accomplished by providing the purchaser with a copy of an "Offering Circular," which for smaller private placements is called the "Offering Memorandum.". September 27th 280,000 shares Which of the following statements are TRUE regarding the preliminary prospectus? But the rule disallows this if the trust is formed for the purpose of buying the private placement! StatusC C. 506,250 shares Intrastate offerings Section 3 (a) (11) of the Securities Act is generally known as the intrastate offering exemption. This exemption seeks to facilitate the financing of Correct B. I, III, IV Customers in any state can buy - this is not being sold under an "intrastate exemption" (Rule 147) that limits purchasers to residents of 1 state. The best answer is C. Rule 144 requires that restricted securities be sold on an agency basis only. 1,960,000 shares / 4 weeks = 490,000 share average StatusB B. I and IV Rule 144 permits the sale of the greater of 1% of the shares outstanding or the weekly average of the preceding 4 weeks' trading volume. Additional commissions or charges above the P.O.P. The best answer is C. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. StatusB B. III and IV only III Merger with another publicly held company First, the Act permits intrastate crowdfunding. In April 2017, it was adjusted to $2,200. Only the proceeds from the primary distribution will go to the company. It is only available to "seasoned" companies that already have completed a registered IPO, that have been registered for 1 year, and that have a minimum market capitalization of $75 million. Correct Answer A. they are sold on a dealer basis Correct C. II and III The best answer is C. To be accredited, an individual must have an annual income of $200,000 per year; or a couple must have an annual income of $300,000 per year; or the purchaser must have a net worth of at least $1,000,000, exclusive of residence. B. FINRA Rules State Blue Sky Laws an exempt transaction under Regulation D that can be sold without a prospectus to an unlimited number of accredited (wealthy) investors, but only to a maximum of thirty-five (35) non-accredited investors. Which statements are TRUE? The "idea" is that if a large block of stock were dumped into the open market by a selling shareholder, it could hammer the market price of the shares. A sample of 50 observations is selected from a second population with a population standard deviation of 0.66. An "accredited investor questionnaire" is required when which type of offering is made to investors? It requires the registration of broker-dealers and self-regulatory organizations (the exchanges). This client cannot make the investment because the dollar amount to be invested is too small I made by start-up issuers StatusB B. II and III only Does the Form 144 filing requirement apply to this sale? StatusC C. Small Business Investment Company issues IV Spin off of a subsidiary as a publicly held company Think of the SEC as a big filing cabinet - once the proper documents relating to a new issue offering are filed, the issue may be offered and sold to the public. Choice "b" is incorrect. U.S. Government issues, savings and loan issues, and municipal issues are exempt. Correct C. II, III, IV This procedure avoids the "20 day cooling" off period, and allows seasoned issuers to enter the market quickly (such as when interest rates have dipped) to sell their securities. Correct B. II only This person can do so, without being subject to the Rule 144 volume limitations, after holding the securities for: I Individual earning $200,000 per year IV The issuer avoids the 20 day cooling off period and is allowed to issue the securities 2 business days after filing I Disclosure in the registration documents is not complete StatusD D. 515,725 shares. Correct B. buyer's representation letter StatusB B. IV at, or prior to, the placement of the order This is prohibited under SEC rules H0:12;H1:1>2H_0:_1_2; H_1:_1>_2 Correct Answer A. they are likely to be officers and large shareholders of the company who must sell their shares either under the provisions of Rule 144 or who must sell their shares in a managed offering so that the existing trading market for the stock is not distorted Correct A. I and III This limit is applied to either giving, or receiving, the gift. Which statement describes trading of Rule 144A issues? Small business investment companies are an exempt security under the Securities Act of 1933. StatusA A. Determine the least-squares regression line for estimating the passer rating based on the percentage of passes that were touchdowns. Auction Rate Securities are long-term debt issues where the interest rate is reset weekly (or monthly) via Dutch auction. If the Form 144 is filed today, the maximum sale is: A small investor with $2,000 of available funds wishes to make a crowdfunding investment. StatusB B. III and IV only Second, the Act expands Michigans intrastate offering rule (MUSA 202 (1) (n)) to allow offers and sales to 50 Michigan residents (up from 25 Michigan residents under the old law). Correct D. II and IV. A. I and II only An investor wishes to sell restricted stock under the provisions of Rule 144. However, the issue is still subject to state (blue-sky) registration. The best answer is A. C. II and III StatusB B. II Couple earning $300,000 per year It gives an "E-Z" registration method for offerings of up to $50 million within a 12 month period. Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. Correct A. I and III StatusC C. Regulation A a notice from the Securities and Exchange Commission to an issuer who has filed a registration statement under the Securities Act of 1933, that the disclosure is not adequate. If the trust accumulated $5,000,000 for investment, it would be accredited. Regulation A is intended to make it easier for smaller issuers to raise capital. Correct B. Since 144 shares are being sold in the open market, the issuer must comply with SEC issuer reporting rules to maintain the public market in the securities. Intrastate offerings are exempt from Federal 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.) The best answer is B. III The SEC has approved the offering for sale to the public C. Auction Rate Securities can be put back to the issuer at the reset date StatusB B. after holding the securities for 90 days The deficiency must be cured before the SEC will allow the registration to be effective. C. Auction Rate Securities can be put back to the issuer at the reset date The "idea" is that if a large block of stock were dumped into the open market by a selling shareholder, it could hammer the market price of the shares. This market is not available to individuals. The best answer is A. Industrial companies are not exempt from the Securities Act of 1933. These are private placement securities that are exempt from registration with the SEC. Generally, registered secondary distributions are used by officers of public held companies and larger shareholders, who when selling shares, are subject to the requirements of Rule 144 (public notice of sale and limits on the amount of shares that can be sold each quarter). StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. The intent is to make it easy for start-up company to raise "seed" capital in a private placement offering from a group of relatively small investors. The greater amount, 18,250 shares, can be sold during the next 90 days. I A preliminary prospectus may be sent to a prospective customer before the issue has entered into the 20 day cooling off period An indication of interest is taken during the 20 day cooling off period before a new issue's registration becomes effective. II Savings and Loan Issues The best answer is A. The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy.

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