Definition of Security correct answers 1. Investment of money
2.In a common enterprise
3. With an expectation of profit
4.Results solely from the efforts of others
What are considered securities? correct answers 1. Stock
2. Bond
3. Debenture
4. Right or warrant
5. Note
6. Put, call, str...
Series 65 Exam Prep || Already Graded A+.
Definition of Security correct answers 1. Investment of money
2.In a common enterprise
3. With an expectation of profit
4.Results solely from the efforts of others
What are considered securities? correct answers 1. Stock
2. Bond
3. Debenture
4. Right or warrant
5. Note
6. Put, call, straddles, privileges on securities or other option
7.Limited Partnership interest
8. Certificate of interest in a profit-sharing agreement
9.Treasury Stock
10. Evidence of indebtedness
11. Collateral Trust certificates
12. Pre-organization certificates or subscriptions
13. Transferable shares
14. Investment Contracts
15. Voting trust certificates
16. Certificate of deposit for a security
17. Certificate of interest or participation in an oil, gas, or mining title or lease
What is Not a Security correct answers 1. Collectibles
2. Commodities such as precious metals, and grains, including future contracts
3. Condos used as a personal residence
4. Currency
5. Interest in a retirement plan such as an IRA or Keogh plan
6. An insurance or endowment policy or fixed annuity contract
Prospectus correct answers Any notice, circular, letter or communication, written or broadcast by
radio or television that offers any security for sale or confirms the sale of a security
Exempted Securities under the Securities Act of 1933 correct answers 1. Any security issued or
guaranteed by the US, any state, or any political subdivision of a state (all fed gov issues and
muni securities)
2. Any commercial paper that has a maturity at the time of issuance of no more than 270 days
3. Any security organized and operating for religious, educational, benevolent, fraternal or
charitable purposes
4. Any interest in railroad company trust
5. Any security issued by federal or state bank (DOES NOT INCLUDE BANK HOLDING
COMPANIES)
,Rule 147 correct answers Exempt under federal law but not under the Uniform Securities Act so
will probably have to register with the state
Rule 147 Issue: Any security offered and sold only to persons resident within a single state
where the issuer of such security is a person resident and doing business within such a territory.
80/80/80 rule
Exempted Transactions under the Securities Act of 1933 correct answers Transactions by any
person other than the issuer underwriter, or dealer and
Transactions by an issuer that do not involve a public offering
Registration Statement with the SEC for IPO correct answers Signed by CEO, CFO, and the
majority of the board of directors
Contains the following infromation
1. Purpose of issue
2. Public offering price
3. Underwriter's commissions or discounts
4. Promotion expenses
5. Expected use of the net proceeds of the issue to the company
6. Balance Sheet
7. Earnings statement for the last 3 years
8. Names, bios of officer, directors, underwriters and stockholders who own more than 10% of
the outstanding shares
9. Copy of underwriting agrrement
10. Copies of article of incorporation
The Cooling Off Period correct answers Registration can be effective as early as 20 calendar
days after the SEC has received the registration statement
In this time period, no one can solicit sales but indication of interest can be solicited with a red
herring
SEC Regulation D Rule 506 Private Placement correct answers 506(b) - no advertisement but
can have 35 non-accredited investors and unlimited accredited investors
506(c) permits advertising but only accredited investors and have to reasonably believe they are
accredited by taking reasonable steps
Rule 501 accredited investors correct answers This only applies to private placement
1. A bank, insurance, or registered investment company
2. An employee benefit plan if the bank, insurance company or registered investment advisor
makes the investment decisions or the plan has over $5 million in total assets
3. Charitable organizations with assets exceeding $5 mil
4. Directors, executive officers, general partners of the issuer
5. Any natural person who had an individual income of over 200k or with spouse 300k
6. Individual with assets over a mil not including primary residence
7. Entities made up of accredited investors
, Form D correct answers Under Rule 503, issuer that is issuign security in reliance with
regulation D must file no later than 15 days after final sale
Restricted Securities correct answers Unregisterd securities purchased by an investor in private
placement restricted from resale for a specified amount of time
Control Person correct answers Over 10% of voting stock
SEC Rule correct answers Those who wish to sell control stock or restricted stock must do so by
filing a Form 144
Exchange correct answers Must be registered which is completed by filing an application with
the SEC. This is accepted or denied in 90 days
Investment Discretion correct answers Discretion is defined as the authority to decide:
1. Which securities
2. Buy or sell?
3. Number of shares or units
NOT Timing or price when acquired. If given discretion have to do in one day unless written
permission otherwise
Registration under the 1934 Act correct answers 1. Brokers/Dealers operating in interstate
commerce, including those operations under exchanges and the over the counter market(broker-
dealer file application for membership on form BD and the SEC has 45 days to accept or deny
2. Securities Exchanges (90 days)
3. National Securities Associations like FINRA and the mSRB
4. Corporations with listed securities
Application for 1934 Act Resgistration correct answers 1. Organization, financial structure, and
nature of the business
2. terms, positions, rights and privledges of different rights of outstanding securities
3. Term on which securities are to be and have been in the past 3 years offered ti the public
4. Directors, officers, and underwriters and each security holder or record holding more than
10%
-Balance, p&l statements of the past three years
6. SIPs
7. Transfer agents
Insider Transactions Under the Securities Exchange Act of 1934 correct answers 1. every person
who directly or indirectly the beneficial owner of more than 10% of any class of equity security
2. Officers or directors of the issuers of such securities
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