SIE Regulations Test with all Correct & 100% Verified
Answers |Actual Complete Exam |Already Graded A+
Securities Act of 1933 ✔Correct Answer-The first major federal law regulating the securities
industry.
Focuses on the PRIMARY MARKET
It requires firms issuing new stock in a public offering to file a registration statement with the
SEC.
Securities Act of 1934 ✔Correct Answer-A law governing the SECONDARY trading of securities
in the US; established the SEC (Securities and Exchange Commission).
Securities Act of 1933 applies to ✔Correct Answer-non-exempt issues
What is needed per the Securities Act of 1933 before sales can happen? ✔Correct Answer-
prospectus
registration statement with SEC
20 day cooling off period
What happens in the 20 day cooling off period? ✔Correct Answer-full and fair disclosure
nothing can be sold
can distribute preliminary prospectus (red herring)
no orders/sales ONLY INDICATIONS OF INTEREST
What happens after the 20 day cooling off period? ✔Correct Answer-Issuer compliance
registration is effective
issue is sold
effective date ✔Correct Answer-date issue can be sold
Does the SEC have to approve or disapprove of an issue? ✔Correct Answer-NO
When is a prospectus delivery date for primary non-NASDAQ/non-exchange listed ✔Correct
Answer-90 days
When is the prospectus delivery date for secondary non-NASDAQ/non exchange listed issues
✔Correct Answer-40 days
When is the prospectus delivery date for exchange listed and NASDAQ issues? ✔Correct
Answer-25 days
,When must a prospectus be delivered? ✔Correct Answer-at or prior to confirmation
Is electronic delivery of prospectuses allowed? ✔Correct Answer-yes, as long as the firm
knows the customer has access
"access = delivery"
Omission or misstatement of material fact is considered ✔Correct Answer-FRAUD
due diligence ✔Correct Answer-making sure the disclosure is adequate and truthful
Regulation A ✔Correct Answer-an SEC regulation that exempts public issues of less than $5
million from most registration requirements
easier for start up companies to raise $$
simple and filed then a 20 day review
at the end of the 20 days, if no problem, issue can be sold
allows issuer to "test the waters" - CAN give out promotional material.... (this is against the rules
for regular registered issues)
Rule 415 (Shelf Registration) ✔Correct Answer-lets issuers register additional shares without
having to go through the 20 day cooling off period
registration is good for 3 years
issuer gives a 2 day notice to the SEC
can sell with a supplement to the original prospectus
requirement is that the original issues have to be outstanding for at least 1 year and a minimum
of $75MM (75 million)
Who/What is EXEMPT from Securities Act of 1933? ✔Correct Answer-Gov't
Gov't agencies
Munis
Foreign Gov Obligations
Also:
bank issues
insurance company offerings
common carrier issues
public utility issues
non-profit/charity issues
, banker's acceptances and commercial paper
small business investment company issues
What are common carrier issues? What regulation covers them? ✔Correct Answer-railroads
trucking companies etc.
Interstate Commerce
What regulation covers public utilities? ✔Correct Answer-Public Utility Holding Act of 1935
Rule 147 - Intrastate Offering Exemption ✔Correct Answer-exempt from SEC/Act of 1933
because the Fed Gov't has no authority if it's only within a state
100% must be sold to state residents
80% of the sales and assets and proceeds in the state
6 month sale restriction - resales only for residents
Form 147 has to be filed with SEC 10 business days before the sale
must follow blue sky laws
Regulation D: Private Placements ✔Correct Answer-Registration exemption for securities sold
directly to Accredited Investors and no more than 35 Non-Accredited Investors
all must know the risks/merits in advance
purchaser must sign an Investment Letter
Reg. D Road shows require pre-qualification of investors
**if the purchaser doesn't fully know/want to evaluate the issue then a purchaser rep can be
used (usually lawyer or accountant)
Accredited Investor ✔Correct Answer-Wealthy investor who meets requirements of the
Securities and Exchange Commission as to minimum net worth (in excess of $1.0 million) or
annual income (in excess of $200,000)
$300,000 in come for a couple for at least 2 years
institutional investor
5 million for institution
person has to sign the accredited investor questionnaire
With private placement offerings, is there a limit on what is sold? ✔Correct Answer-No.
No dollar limit on the dollar amount sold
Answers |Actual Complete Exam |Already Graded A+
Securities Act of 1933 ✔Correct Answer-The first major federal law regulating the securities
industry.
Focuses on the PRIMARY MARKET
It requires firms issuing new stock in a public offering to file a registration statement with the
SEC.
Securities Act of 1934 ✔Correct Answer-A law governing the SECONDARY trading of securities
in the US; established the SEC (Securities and Exchange Commission).
Securities Act of 1933 applies to ✔Correct Answer-non-exempt issues
What is needed per the Securities Act of 1933 before sales can happen? ✔Correct Answer-
prospectus
registration statement with SEC
20 day cooling off period
What happens in the 20 day cooling off period? ✔Correct Answer-full and fair disclosure
nothing can be sold
can distribute preliminary prospectus (red herring)
no orders/sales ONLY INDICATIONS OF INTEREST
What happens after the 20 day cooling off period? ✔Correct Answer-Issuer compliance
registration is effective
issue is sold
effective date ✔Correct Answer-date issue can be sold
Does the SEC have to approve or disapprove of an issue? ✔Correct Answer-NO
When is a prospectus delivery date for primary non-NASDAQ/non-exchange listed ✔Correct
Answer-90 days
When is the prospectus delivery date for secondary non-NASDAQ/non exchange listed issues
✔Correct Answer-40 days
When is the prospectus delivery date for exchange listed and NASDAQ issues? ✔Correct
Answer-25 days
,When must a prospectus be delivered? ✔Correct Answer-at or prior to confirmation
Is electronic delivery of prospectuses allowed? ✔Correct Answer-yes, as long as the firm
knows the customer has access
"access = delivery"
Omission or misstatement of material fact is considered ✔Correct Answer-FRAUD
due diligence ✔Correct Answer-making sure the disclosure is adequate and truthful
Regulation A ✔Correct Answer-an SEC regulation that exempts public issues of less than $5
million from most registration requirements
easier for start up companies to raise $$
simple and filed then a 20 day review
at the end of the 20 days, if no problem, issue can be sold
allows issuer to "test the waters" - CAN give out promotional material.... (this is against the rules
for regular registered issues)
Rule 415 (Shelf Registration) ✔Correct Answer-lets issuers register additional shares without
having to go through the 20 day cooling off period
registration is good for 3 years
issuer gives a 2 day notice to the SEC
can sell with a supplement to the original prospectus
requirement is that the original issues have to be outstanding for at least 1 year and a minimum
of $75MM (75 million)
Who/What is EXEMPT from Securities Act of 1933? ✔Correct Answer-Gov't
Gov't agencies
Munis
Foreign Gov Obligations
Also:
bank issues
insurance company offerings
common carrier issues
public utility issues
non-profit/charity issues
, banker's acceptances and commercial paper
small business investment company issues
What are common carrier issues? What regulation covers them? ✔Correct Answer-railroads
trucking companies etc.
Interstate Commerce
What regulation covers public utilities? ✔Correct Answer-Public Utility Holding Act of 1935
Rule 147 - Intrastate Offering Exemption ✔Correct Answer-exempt from SEC/Act of 1933
because the Fed Gov't has no authority if it's only within a state
100% must be sold to state residents
80% of the sales and assets and proceeds in the state
6 month sale restriction - resales only for residents
Form 147 has to be filed with SEC 10 business days before the sale
must follow blue sky laws
Regulation D: Private Placements ✔Correct Answer-Registration exemption for securities sold
directly to Accredited Investors and no more than 35 Non-Accredited Investors
all must know the risks/merits in advance
purchaser must sign an Investment Letter
Reg. D Road shows require pre-qualification of investors
**if the purchaser doesn't fully know/want to evaluate the issue then a purchaser rep can be
used (usually lawyer or accountant)
Accredited Investor ✔Correct Answer-Wealthy investor who meets requirements of the
Securities and Exchange Commission as to minimum net worth (in excess of $1.0 million) or
annual income (in excess of $200,000)
$300,000 in come for a couple for at least 2 years
institutional investor
5 million for institution
person has to sign the accredited investor questionnaire
With private placement offerings, is there a limit on what is sold? ✔Correct Answer-No.
No dollar limit on the dollar amount sold
