Progress 3 Flashcards
What are the three methods of registering securities at the state level?
notification
coordination
qualification
When can a broker dealer receive payment?
reimbursement for SEC registration fees when helping an issuer file a new issue
What is a split (combined) offering?
some shares offered by issuer, others offered by selling shareholders, issuers receive proceeds of shares they sell, shareholders receive payment for the shares they sell
What can an underwriter say about a new issue regarding the SEC?
“The SEC has deemed the registration effective”
How is markup calculated?
(sale price-inside offer)/inside offer
When are Limit Orders used?
large orders, wide spread, thinly traded securities
What kind of order should be used for Long stock to protect gain and limit loss?
sell stop order (bullish)
what kind of order should be used for Short stock to protect gain and limit loss?
Buy stop order (bearish)
What is the difference between a Stop Order and a Stop Limit Order?
Stop order is executed once market price hits stop price
Stop Limit Order is triggered by stop price, then needs to be above (sell) or below (buy) in order for it to be executed
Who exercises warrants and rights?
transfer agent for company’s stock
When is customer required to make payment for a US gov bond?
settlement date (T+1)
What retirement plans does ERISA apply to?
private corporations only, not government
What are defined benefit plans?
employee-sponsored retirement plans with guaranteed payouts at retirement
What retirement plan has tax-free distributions?
Roth 401k
What is a not-held order?
specifies amount, asset, and action
written approval not required, can be accepted with client’s verbal authorization
What does a firm make if acting on a principal basis?
markup/markdown
principal=dealer, buys and holds securities in its own account
What is a QIB
Qualified Institutional Buyer
entities with >$100m investable securities
banks, savings, loan associations with net worth >$25m
CANNOT BE AN INDIVIDUAL PERSON
What are preemptive rights?
received by common stockholders, the right to purchase new stock before it is issued to others
protects current stockholders from diluting their control
What are the disclosure documents for unregistered limited partnerships, public offerings, and municipal securities?
partnerships: Offering Memorandum
public offerings: Prospectus
muni: Official Statement
What documents are included in a Limited Partnership?
Partnership Agreement: specifies rights and responsibilities of all partners
Certificate of Limited Partnership: establishes partnership
Offering Memorandum: disclosure
What are aftermarket prospectus delivery requirements for listed and non-listed IPOs and follow-ons?
non-listed IPO: 90 days from effective date
non-listed follow-on: 40 days
IPO to be listed: 25 days
listed follow-on: no requirement
listed primary offering of company already on exchange: prospectus delivered only on purchases made at POP
