Ch 2 Deck 14

Question 1

Nasdaq listing requirements include:

Answer 1

-minimum share price
-minimum market capitalization
–minimum number of market makers
–minimum number of shareholders

Question 2

Nasdaq listing requirements do not include:

Answer 2

minimum price/book ratio

Question 3

electronic quotation system that provides
information on OTC equity securities that are not listed or traded on the NASDAQ or any other national securities exchange

Answer 3

The OTC Bulletin Board (OTCBB)

Question 4

OTCBB provides quotes on

Answer 4

–Non-listed equity securities

–Non-listed ADRs

–Non-listed Warrants
–Non-listed DPPs


Question 5

Minimum listing requirements for OTCBB

Answer 5

–Submit reports to the SEC

–Minimum number of stockholders holding a specified number of shares
–At least one market maker submit Form 211 to FINRA

Question 6

In a secondary offering who sells to the public

Answer 6

major shareholders

Question 7

In a negotiated offering, issuer starts by

Answer 7

choosing an underwriter with whom they will then negotiate terms

Question 8

Most common form of underwriting for corporate underwriting

Answer 8

Negotiated offerings

Question 9

information to make an investment decision is called

Answer 9

material information

Question 10

Best efforts underwriting commitment is also called

Answer 10

contingency offering

Question 11

Mini-max offerings are sometimes called

Answer 11

part or none offerings

Question 12

Syndicate accounts must be closed within 90 days of

Answer 12

syndicate settlement date

Question 13

date that securities are delivered to underwriters to be sold

Answer 13

syndicate settlement date

Question 14

no later than the final settlement each member of selling syndicate must receive

Answer 14

an itemized statement of syndicate expenses

Question 15

syndicate expenses are considered

Answer 15

underwriting expenses

Question 16

Under the corporate financing rule, a FINRA member may not join with a non-member in

Answer 16

any syndicate, selling group or joint account for the distribution of securities

Question 17

Under corporate financing rule, a syndicate cannot include

Answer 17

suspended members

Question 18

if a selling group member is suspended during a distribution

Answer 18

they may still sell shares but must purchase them at full price rather than at the discount

Question 19

Can the syndicate include foreign member that are not eligible to be FINRA members?

Answer 19

Yes (really)

Question 20

Under the corporate financing rule selling concessions cannot go to

Answer 20

a bank or a trust

Question 21

Under the corporate financing rule underwriters fees must be

Answer 21

fair and reasonable

Question 22

Under the corporate financing rule, for an offering filing with the SEC or state securities commission, underwriting agreements must be submitted to FINRA

Answer 22

no later than 1 business day after filing with SEC or state securities commission

Question 23

Under the corporate financing rule, for an offering not filing with a regulatory agency, underwriting agreements must be submitted to FINRA

Answer 23

at least 15 business days prior to the anticipated offering date

Question 24

The FINRA review on the fairness of underwriting fees will not

Answer 24

pass judgment on the merits of the securities

Question 25

In a review of the fairness of underwriting fees, FINRA will render a

Answer 25

“No objection” opinion

Question 26

These are considered underwriting compensation

Answer 26

(must memorize this list)
Discounts/commissions
Reimbursements
Finders fees
Advisory fees
Attorneys fees(excluding blue-sky fees)
Securities (common and preferred stock, options, warrants, debt securities)
Fees of a qualified independent underwriter

Question 27

These are not considered underwriting compensation

Answer 27

(must memorize this list)
Expenses borne by the issuer
Registration fees(issuers fees)
Blue-sky fees
Printing fees
Accountants fees