Regs Flashcards by Steve Robertson

Q

Rule 144

A

Restricted stocks
6-month holding period if public
Volume: 1 - 4 - 4 (greater of)

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Q

Rule 144A

A

Private resales
Bypasses SEC reg
Institutional trading

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Q

Reg D

A

Private placement exemption
Max 35 non-accredited
Unlimited accredited
No general ads if non-accredited ppts
Must provide Offering Memorandum

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Q

Reg T

A

Margin accounts
50% initial margin requirement

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Q

Reg SHO

A

Short sale reg
Must locate shares before shorting
“Close Out” required if fails-to-deliver persist
Prevents naked shorts

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Q

Rule 2111 (Suitability)

A

Know Your Customer
Reasonable basis
Customer-specific
Quantitative suitability
Recommendations only

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Q

Rule 2210 (Communications)

A

Retail =>25 people in 30 days
Correspondence <25 people
Fair, balanced, not misleading
Principal approval for retail

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Q

Penny Stocks

A

<$5 (not on major exchange)
Disclosure required
Suitability statement + signed acknowledgement
Monthly statements required

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Q

Regulation U

A

Controls credit from bank to broker

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