Rules & shit

Question 1

Addresses reclassifications, mergers or consolidations, and transfers of company assets

Answer 1

Rule 145

Question 2

Regulation A is an exemption from registration for ______

Answer 2

Public offerings

Question 3

Would filing an upldated prospectus be a requirement of the 1933 Act or the 1934 Act?

Answer 3

Securities Act of 1933

Question 4

What does Rule 156 and 135A deal with?

Answer 4

Advertising

Question 5

Rule 156 deals with ___

Answer 5

Advertising

Question 6

Rule 135A is about ____

Answer 6

Advertising

Question 7

Rule 506(b)

Answer 7

Private placement exemptions

Question 8

Rule 498

Answer 8

Summary prospectus for mutual funds

Question 9

The federal legislation that requires broker-dealers to verify the identity of any person opening an account is

Answer 9

PATRIOT Act

Question 10

A 403(b) plan (tax-sheltered annuity plan or TSA) is a retirement plan offered by _____

Answer 10

public schools and certain charities

Question 11

FINRA rule 8110 says firms have to make ____ available upon customer request

Answer 11

FINRA manual

Question 12

Regulation D

Answer 12

Let’s companies doing certain kinds of private placements raise capital without hassle of registering securities with SEC

(company may sell its securities to an unlimited number of “accredited investors” and up to 35 other purchasers. All non-accredited investors, either alone or with a purchaser representative, must be sophisticated—that is, they must have sufficient knowledge and experience)

Question 13

Us regulation A an exemption from registration for public offerings or private placements?

Answer 13

Public offerings

Regulation A is an exemption from registration for public offerings

Question 14

Does regulation A apply to private placements or public offerings?

Answer 14

Public offerings

Regulation A is an exemption from registration for public offerings

Question 15

Regulation S-P

Answer 15

• Protects customer privacy
• Requires initial and annual privacy notices
• Notices must have a simple opt out method

(Enacted by the SEC)

Question 16

Regulation SHO

Answer 16

• Established locate requirement for securities to be sold short
• Tries to curtail naked short selling

(“SHO” for short selling)

Question 17

Regulation A (two tiers)

Answer 17

• Exemption from registration
• Raise up to $50m in 12mo period w/o registration

Two tiers:

• Tier 1 allows offerings up to $20m
• Tier 2 allows offerings up to $50m

Question 18

T/F: Regulation A and Regulation D are both considered “exemptions” from registration

Answer 18

True, both exemptions

• Reg D for private placements
• Reg A for offerings up to $50m in 12mo

Question 19

Regulation D

Answer 19

• Registration exemption for private placements
• Up to 35 non accredited investors for 506(b)
• All accredited investors for 506(c)

Question 20

Retail communications

Answer 20

More than 25 retail investors within 30 day calendar period

Question 21

Correspondence

Answer 21

Communication available to 25 or fewer retail investors within 30 day calendar period

Question 22

Institutional communications

Answer 22

Communications available only to institutional investors

Examples: other member firms, banks, insurance companies, investment companies, gov entities, any entity with $50m or more in assets

Question 23

Currency transaction report is the Form ___

Answer 23

Form 112

• CTR is aka Form 112
• When more than $10k currency is deposited, withdrawn, or transferred in a single day

Question 24

Do you have to file a currency transaction report (aka Form 112) when more than $10k currency is transferred in a single day?

Answer 24

Yes, even when money is just transferred

•File when money deposited, withdrawn, or transferred in a single day

Question 25

Regulation FD (fair disclosure) applies to who?

Answer 25

Issuers

When they disclose info people might trade off of

Question 26

Is commercial paper that expires in less than 270 days exempt from the registration and disclosure provisions of the Securities Act of 1933?

Answer 26

Yes it is

> commercial paper less than 270 days exempt registration

Question 27

Aside from being nicknamed the “paper and prospectus act” the securities act of 1933 is aka what?

Answer 27

The “truth in securities” act

“The act—also known as the “Truth in Securities” law, the 1933 Act, and the Federal Securities Act—requires that investors receive financial information from securities being offered for public sale.”

Question 28

Which of the following exemption provisions of the Securities Act of 1933 may not be used for an initial offering of securities?

A)
Regulation D
 B)
Regulation A
 C)
Rule 144
 D)
Rule 147

Answer 28

C) Rule 144

“Rule 144 does not pertain to primary offerings; it affects secondary market transactions in restricted or control securities”

Question 29

T/F: Rule 144 pertains to primary offerings

Answer 29

False

“Rule 144 does not pertain to primary offerings; it affects secondary market transactions in restricted or control securities.”

Question 30

If a customer calls a rep to complain about his performance, what does the rep have to do?

Answer 30

Nothing

No reporting (not even to principal) if not in writing

Question 31

T/F: The 5% markup policy applies to exempt securities “

Answer 31

False

> doesn’t apply to primary market either
“The 5% markup policy applies to secondary market transactions in nonexempt securities.”

Question 32

T/F: FINRA Rule 2330, which deals w/ insurance company products, applies to fixed annuities

Answer 32

False

> applies to VARIABLE annuities
applies to purchase/sale of deferred variable annuities and initial allocations to the seperate account
doesn’t apply to fixed annuities

Question 33

T/F: FINRA Rule 2330, which deals w/ insurance company products, applies to variable life insurance

Answer 33

False

> doesn’t apply to variable life insurance
Rule 2330 for variable ANNUITIES
deals w/ purchase/sale of deferred variable annuities and initial allocations to the seperate account