Federal Securities: Exempt Transactions & Securities Flashcards Preview

REG > Federal Securities: Exempt Transactions & Securities > Flashcards

Flashcards in Federal Securities: Exempt Transactions & Securities Deck (8)
Loading flashcards...
1

Exempt Securities:
Excluded

- Bank & Government
- Short Term Notes
- Charities
- Others
- Regulated Savings & Loans
- Federally regulated common carriers
- Receivers or trustees in bankruptcy
- Insurance & Annuity policies
- Domestic governmental organizations

2

Exempt Securities:
Offerings

Three Major Types
1. Small Offerings (1933 act)
2. Private Placement Exemption
- sophisticated nature of offeree
- Accredited investors (persons making $200k+)
- businesses worth $5M+
3. Intrastate Offering
- primarily inside state's borders

3

Exempt Securities:
Characteristics of Key Transactions
Rule 504 of Regulation D

Rule 504 of Regulation D
- Issuer: most small companies, not 1934 issuers
- Amount: only $1M in any 12 month period
- Offering: Not General Solicitation or Advertising
- Purchaser: No Purchaser requirements
- Information: No information requirements
- Filing: Form D with SEC 15 days before 1st sale
- Resale: restricted

4

Exempt Securities:
Characteristics of Key Transactions
Rule 505 of Regulation D

Rule 505 of Regulation D
- Issuer: cannot be used by investment companies or recently in trouble with SEC
- Amount: only $5M in any 12 month period
- Offering: Not General Solicitation or Advertising, unless AI's
- Purchaser: Unlimited Accredited Investors, 35 unaccredited
- Information: AI's Non, if minimal sales to unaccredited, minimal disclosurelimited periodic reporting to SEC
- Filing: Form D with SEC 15 days before 1st sale
- Resale restrictions: not before 1 year

5

Exempt Securities:
Characteristics of Key Transactions
Rule 506 of Regulation D

Rule 506 of Regulation D
- Issuer: cannot be used by recently in trouble with SEC
- Amount: No Limit on Amount
- Offering: Not General Solicitation or Advertising, unless AI's
- Purchaser: unlimited accredited, no more than 35 unaccredited, and must be "sophisticated"
- Information: AI's Non, if minimal sales to unaccredited, minimal disclosure
- Filing: Form D with SEC 15 days before 1st sale
- Resale restrictions: not before 1 year

6

Exempt Securities:
Characteristics of Key Transactions
Regulation A

Regulation A
- Issuer: Cannot be used by 1934 companies, investment companies, non-canadian foreign issuers, or "Bad Actors"
- Amount:
- Tier 1: $20M in 12 month period
- Tier 2: $50M in 12 month period
- Offering: may "test the waters"
- Offeree & Purchaser:
- Tier 1: none
- Tier 2: non-accredited cannot buy stock more than 10% or greater of annual income or net worth. non-accredited firm limited to 10% annual revenue or net assets
- Information Requirements
- Tier 1, offering circular and 2 years unaudited FS
- Tier 2, offering circular and 2 years unaudited FS
Filing:
- Tier 1: Form 1-A and offering circular
- Tier 2: Form 1-A, offering circular, 2 years of FS
- Resale restrictions: none
- Other: Exempt from "blue sky laws"

7

Exempt Securities:
Characteristics of Key Transactions
Rule 147 Intrastate offerings

- Issuer: organized and doing business in state in which it plans to do offering.
- Amount: none
- Offering: none except done in state
- Offeree and purchaser: in-state residents
- Information Requirements: None
- Filing requirements: None
- Resale restrictions: in-state residents only for 9 months

8

Exempt Securities:
Blue Sky Laws

- preempts state regulation of "covered" securities including:
- listed on national exchange
- issued by registered investment companies
- sold to "qualified" purchasers
- sold pursuant to Rule 506
States Can
- enforce antifraud act
- require notice filing

Decks in REG Class (109):