Securities Underwriting Flashcards
(18 cards)
the document that corporate founders must file in their home state of business in order to become a corporation
Corporate Charter (bylaws)
also known as Truth in Securities Act, Paper Act, Full Disclosure Act, Prospectus Act, New Issues Act
Securities Act of 1933
regulates new issues of corporate securities, requires issuer to provide full and fair disclosure of itself and offering, and prevents fraud and deception
Securities Act of 1933
act which established the SEC, regulates OTC market and exchanges
Securities Exchange Act of 1934
regulates credit on margin, insider transactions, customer accounts, trading activity
Securities Exchange Act of 1934
prohibits bonds of $50 million or more from being offered without an indenture, requires companies to hire a trustee responsible for protecting the rights of bondholders
Trust Indenture Act
protects investors by disclosing coupon rate, maturity date, collateral backing, etc
Trust Indenture
unless exempt, companies must file what before going public?
Registration Statement and Prospectus
what does a registration statement include?
-Company Info
-Articles of Incorporation
-Underwriters and their commissions
-Offering Price
-Names and addresses of all control personnel (directors, officers, 10% share holders)
-Company’s Capitalization (financing related debt and equity)
-Complete Financial Statements
-Legal Proceedings against Company
-Net proceeds from any securities sold by issuer in last two years
-Names and addresses of attorneys who have passed on legality of issue and copy of their opinions
-Agreements or Indentures affecting security being offered
registration statement for corporations
Schedule A
registration statement for local governments
Schedule B
allows issuers to sell securities that were previously registered with the SEC without additional permission for up to 3 years
Shelf Registration
the time during which the SEC reviews the registration statement
20 Day Cooling Off Period
what the SEC issues when they require amendments to the registration statement
Deficiency Letter
suspends a misleading registration statement
Stop Order
an announcement but not an offer of a new security for sale; the only advertisement allowed during cooling-off period
Tombstone Ad
True or False: the SEC is in charge of approving issues
False
must be made available to any persons interested in a new issue during cooling off period; used to obtain indications of interest
Preliminary Prospectus
