SIE Regulations Exam Questions and Answers Latest Update Graded A+
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SIE Regulations
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SIE Regulations
SIE Regulations Exam Questions and Answers Latest Update Graded A+
Securities Act of 1933 - Answers The first major federal law regulating the securities industry.
Focuses on the PRIMARY MARKET
It requires firms issuing new stock in a public offering to file a registration statement with ...
SIE Regulations Exam Questions and Answers Latest Update Graded A+
Securities Act of 1933 - Answers The first major federal law regulating the securities industry.
Focuses on the PRIMARY MARKET
It requires firms issuing new stock in a public offering to file a registration statement with the SEC.
Securities Act of 1934 - Answers A law governing the SECONDARY trading of securities in the US;
established the SEC (Securities and Exchange Commission).
Securities Act of 1933 applies to - Answers non-exempt issues
What is needed per the Securities Act of 1933 before sales can happen? - Answers prospectus
registration statement with SEC
20 day cooling off period
What happens in the 20 day cooling off period? - Answers full and fair disclosure
nothing can be sold
can distribute preliminary prospectus (red herring)
no orders/sales ONLY INDICATIONS OF INTEREST
What happens after the 20 day cooling off period? - Answers Issuer compliance
registration is effective
issue is sold
effective date - Answers date issue can be sold
Does the SEC have to approve or disapprove of an issue? - Answers NO
When is a prospectus delivery date for primary non-NASDAQ/non-exchange listed - Answers 90 days
When is the prospectus delivery date for secondary non-NASDAQ/non exchange listed issues - Answers
40 days
When is the prospectus delivery date for exchange listed and NASDAQ issues? - Answers 25 days
,When must a prospectus be delivered? - Answers at or prior to confirmation
Is electronic delivery of prospectuses allowed? - Answers yes, as long as the firm knows the customer
has access
"access = delivery"
Omission or misstatement of material fact is considered - Answers FRAUD
due diligence - Answers making sure the disclosure is adequate and truthful
Regulation A - Answers an SEC regulation that exempts public issues of less than $5 million from most
registration requirements
easier for start up companies to raise $$
simple and filed then a 20 day review
at the end of the 20 days, if no problem, issue can be sold
allows issuer to "test the waters" - CAN give out promotional material.... (this is against the rules for
regular registered issues)
Rule 415 (Shelf Registration) - Answers lets issuers register additional shares without having to go
through the 20 day cooling off period
registration is good for 3 years
issuer gives a 2 day notice to the SEC
can sell with a supplement to the original prospectus
requirement is that the original issues have to be outstanding for at least 1 year and a minimum of
$75MM (75 million)
Who/What is EXEMPT from Securities Act of 1933? - Answers Gov't
,Gov't agencies
Munis
Foreign Gov Obligations
Also:
bank issues
insurance company offerings
common carrier issues
public utility issues
non-profit/charity issues
banker's acceptances and commercial paper
small business investment company issues
What are common carrier issues? What regulation covers them? - Answers railroads
trucking companies etc.
Interstate Commerce
What regulation covers public utilities? - Answers Public Utility Holding Act of 1935
Rule 147 - Intrastate Offering Exemption - Answers exempt from SEC/Act of 1933 because the Fed Gov't
has no authority if it's only within a state
100% must be sold to state residents
80% of the sales and assets and proceeds in the state
6 month sale restriction - resales only for residents
Form 147 has to be filed with SEC 10 business days before the sale
must follow blue sky laws
, Regulation D: Private Placements - Answers Registration exemption for securities sold directly to
Accredited Investors and no more than 35 Non-Accredited Investors
all must know the risks/merits in advance
purchaser must sign an Investment Letter
Reg. D Road shows require pre-qualification of investors
**if the purchaser doesn't fully know/want to evaluate the issue then a purchaser rep can be used
(usually lawyer or accountant)
Accredited Investor - Answers Wealthy investor who meets requirements of the Securities and Exchange
Commission as to minimum net worth (in excess of $1.0 million) or annual income (in excess of
$200,000)
$300,000 in come for a couple for at least 2 years
institutional investor
5 million for institution
person has to sign the accredited investor questionnaire
With private placement offerings, is there a limit on what is sold? - Answers No.
No dollar limit on the dollar amount sold
Private placement offerings can be advertised if - Answers it excludes any non-accredited investor
provides full disclosure for private placement (exempt transactions)
Is restricted stock exempt from the Securities Act of 1933? - Answers Yes.
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