Missed Qs Flashcards
(155 cards)
The spread is the difference between the price paid to the issuer by the underwriter and the public offering price. If the issue were receives $9 per share and the public offering price is $10 per share, how much is the spread?
1$
Initial public offerings are made ____ initially. Once the offering is complete, the shares are generally listed on ______
OTC initially - not on exchanges until offering is complete
Prospectuses cannot be used for more than _____ months without revision and cannot contain information older than_____ months
9 months and 16 months
A listed company has asked a broker dealer to buy its own shares in the market under a treasury stock repurchase plan. Inside market in the stock is $15.00-15.25. The last reported sale of the stock occur at $15.10- at what price can the stock be purchased?
$15.10 or lower because the last reported sale is 15.10 and this is the higher than the current independent bid of $15. The stock can be purchased at 15.10 or lower.
A broker dealer that is a member of a syndicate may purchase the securities in the market for its own account during the underwriting period ______
Under no circumstances
They can buy it when the syndicate is disbanded
A “_____” is a firm that finds a company that wishes to go public and introduces that firm to an underwriter
Finder
Finders are deemed to be industry “insiders” and cannot be compensated with _______
IPOs of common stock
A web front can be used to make an online offer of a private placement under reg D only if ____
Access to the site is password protected
Thats bc they need to be prequalified that ensures they are accredited - this is not a self- accreditation because the SEC does not allow this- the BD must perform due diligence to make sure they are verified
An issuer has filed an S-1 registration statement for an IPO. During the cooling off period the underwriters have found unexpectedly high investor demand for the issue. The issuer would be required to file an amended S-1 for the offering if the size was increased by ____
20%
(Basically more than the 15% for the green shoe clause)
The basic rule is that there is a_____% limit on underwriting fees or anything similar or related
10%
There is a____% limit on offering expenses that are reimbursed from the proceeds of the offering
5%
The maximum amount that can be raised under Regulation crowdfunding is:
$5 million
The maker of a takeover offer must be concerned with which regulations?
SEC rule 145, SEC regulation MA and Hart Scott Rodino act
_________ is designed to improve corporate auditor independence, speed up corporate reporting of significant events and reports of trades, to minimize conflicts of interest between a broker dealers research departments and corporate issuers, and between a broker dealers research department and it’s investing department
Sarbanes Oxley
If a new issue is “hot” an issuer may NOT direct sales of that issue to:
Finders, member firms, fiduciaries and institutional portfolio managers who wish to buy personally
Finders are basically security industry insiders, which makes them prohibited
A financial advisor wants to sell an IPO to a retail customer. IPOs can be offered to customers who:
Only be offered to customers who in the past 12 months have signed a representation that they are not restricted from buying IPOs
Does verification must be retained for three years by the member firm
An underwriter participation in an eastern account underwriting is completed when:
The managing underwriter terminates the syndicate
An ISSUER can direct shares of a “new” issue to everyone except _____ of the UNDERWRITER
Employees
The FINRA corporate financing rule allows an issue of securities that are “hot” to direct sales of that issue to a:
Divisional President of the issuer
Sale of the issuer shares to FINRA members, their employees, finders and fiduciary are all prohibited under the FINRA IPO rule- the only exception here is if it is the IPO of a privately held FINRA member firm that is taking itself – in this case, the officer is an employees of the firm can buy the shares
Under rule 144, a member holding a sell order for “144” shares may solicit:
The issuer for purchase of its outstanding on registered securities
It makes no sense for a member holding a sell order to contact another individual who wishes to sell – he wants to find someone to buy the stock
Which business form does NOT permit flow through of gain and loss to owners?
Mutual funds regulated under subchapter M
An underwriter is offering common stock of ABC corporation in a primary distribution. ABC is a newly formed company that has never had registered shares outstanding. A dealer who subsequently sells ABC stock in the secondary market, must furnish a prospectus to any purchaser for:_____ days
90 days following the effective date
Under SEC rules, a customer is considered to be ______ only to the extent of his _______ position in a security. It makes no difference that the positions are split among different accounts at the brokerage firm.
Long ; net long
The SEC defines a graphic communication as a written communication. The SEC list of graphic communications includes any form of electronic media, including videotapes, audio, tapes and facsimile, CD ROM, electronic mail, Internet, websites, and computer networks. ; these are also called:
Free writing prospectuses
