Tier 1 gives an "E-Z" registration process to offerings of no more than $20 million in a 12 month period. The Official Statement is the disclosure document for municipal bonds (which are an exempt issue). Rule 144 applies to: 400,000 shares To sell, a Form 144 must be filed. Governments settle "regular way" in 1 business day. II made by seasoned issuers StatusA A. Industrial Company issues 500,000 shares I Any purchaser who received a preliminary prospectus must also receive the final prospectus 73,000 shares / 4 = 18,250 shares StatusB B. IV The use of the preliminary prospectus does not constitute an offer to sell under the Securities Act of 1933 A spouse is considered an affiliated person. As long as the firm has appropriate compliance procedures in place, correspondence is subject to "post-use review and approval." StatusA A. Oct. 16th 1,500,000 shares 6 months StatusD D. 1,025,000 shares. Second, the Act expands Michigans intrastate offering rule (MUSA 202 (1) (n)) to allow offers and sales to 50 Michigan residents (up from 25 Michigan residents under the old law). StatusD D. I, II, III. StatusB B. I and IV An unaffiliated investor wishes to sell a large amount of "144" shares. II Accepting an indication of interest from the customer Rule 144 applies to the public resale of restricted (unregistered private placement) stock and to the sale of registered control shares. the first date that a new issue can be sold to the public under the provisions of the Securities Act of 1933. II. Listed stocks, and stock options are non-exempt issues that must be registered with the SEC. B. FINRA Rules 525,000 shares Because this sale is 5,000 shares @ $8 = $40,000, it can be done under this exemption. The best answer is C. Investment companies, such as mutual funds, are non-exempt; therefore their securities must be registered and sold under a prospectus. \text { Tom Brady } & 92.9 & 5.4 & 2.4 \\ known as the "shelf registration rule," this is a streamlined registration process under the Securities Act of 1933 for large, established companies. III A registered representative gives a customer $200 tickets to a show In the United States, an intrastate offering is a securities offering that can only be purchased in the state in which it is being issued. Correct Answer C. II, III, IV Municipal debt, U.S. Government debt and Foreign Government debt are all exempt. Oct. 30th 220,000 shares StatusC C. after the 20 day cooling off period September 6th If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. The best answer is A. 950,000 shares / 4 weeks = 237,500 shares The only permitted written communications during this period are the red herring preliminary prospectus, and a tombstone announcement (which, in reality, is not published until the effective date). StatusB B. a maximum of 4 sales per year are permitted Correct Answer B. The greater amount is 1% of outstanding shares, or 1,000,000 shares. Incorrect Answer C. $1,000,000 ), Crowdfunding offerings are typically: WebIntrastate Crowdfunding (RCW 21.20.880 to .886) Federal Covered Securities Federal covered securities are securities that are preempted from state registration by Section 18 (b) (4) of the Securities Act of 1933. StatusA A. I and III Which statements are TRUE about the use of a "red herring" preliminary prospectus? StatusB B. III and IV I purchases of control stock C. Purchase a municipal bond where the broker-dealer has a control relationship with the issuer StatusB B. Common carrier issues such as railway issues are exempt under the Securities Act of 1933 because they were regulated by the Interstate Commerce Commission (I.C.C.) A. I and II only Go to the Introduction to Business Online If a corporation merges with another publicly held company, a new corporation is being created, and a registration statement must be filed as well. IV the weekly average of the prior 8 weeks' trading volume If the SEC sets the "effective date" for an issue in registration, this means that all proper documents have been filed with the SEC. Your firm cannot act as a market maker in "144" shares. New issues can only be offered and recommended via a prospectus (unless the security is exempt). 1% of 50,000,000 shares = 500,000 shares. StatusB B. \text { Joe Montana } & 92.3 & 5.2 & 2.6 \\ StatusC C. exempt under Rule 144 1% of 100,000,000 shares = 1,000,000 shares. Correct Answer C. 250,000 shares C. Auction Rate Securities can be put back to the issuer at the reset date Private placements are exempt transactions under the Securities Act of 1933. Incorrect Answer C. 12 months Correct C. $1,000,000 The only requirement is that discretionary trades executed be consistent with the customer's investment objective; must not be too frequent; and must not be excessively large in size. Specific customer approval is needed for the registered representative to effect which of the following transactions in the customer's account? IV Rule 144A permits issuers to sell tradeable private placement units to individual investors Rule 144A issues are NMS securities that are listed and trade on the NYSE, AMEX and NASDAQ $1,000,000 of assets that it invests on a discretionary basis The issue here is that there can be an inherent conflict of interest when such a relationship exists. StatusC C. the issuer needs to raise substantial funds from its selling shareholders for some business purpose that is detailed in the prospectus StatusB B. III and IV only acronym for a "Qualified Institutional Buyer" as defined under Rule 144A. To document that the purchasers are, indeed, accredited, an "accredited investor questionnaire" must be completed and signed by the potential purchaser. Sell naked calls There is no requirement that another 6-month holding period be met. StatusC C. I and IV only II Rule 144A limits the amount of restricted securities that can be sold in the public markets Anyone can purchase a Regulation A offering - it is not limited solely to accredited (wealthy) investors. An officer of ABC wishes to sell ABC stock on November 15th under Rule 144. The prior weeks' trading volumes are: The weekly average of the preceding 4 weeks' trading volume is: A security which was never registered and can only be sold in the public markets when it is either registered, or sold under an exemption provision II by the buyer of the restricted shares StatusD D. arbitration agreement. III 10 business days prior of the placement of the order StatusB B. Benevolent Association issues StatusD D. This is permitted without restriction. September 6th StatusD D. An individual investor who buys $2,000,000 of the offering. StatusC C. This is permitted under SEC rules as long as the potential viewer completes and signs an arbitration agreement before being given the password to enter Incorrect Answer A. subscription agreement Statements B, C, and D are facts and are true. WebAll of the following statements are true about Rule 147 EXCEPT: A. Which statement is TRUE about this? D. II and IV. Since one state is involved, the issuing company does not have to StatusD D. broker's representation letter. II A Form 144 must be filed if the shares are to be sold StatusD D. I, II, III. Corporate bonds are non-exempt securities that must be registered with the SEC under the Securities Act of 1933. III The use of the preliminary prospectus constitutes an offer to sell under the Securities Act of 1933 StatusD D. I, II, III, IV. Under the advertising rules of the exchanges, any statements made must be truthful, and not exaggerated. Intrastate offerings are exempt from: I 1% of the outstanding shares The greater amount is 1% of outstanding shares, or 250,000 shares. Correct D. I, II, III, IV, The best answer is D. An SEC "deficiency letter" indicates that there is not adequate disclosure in the registration documents to allow investors to make an informed decision. StatusA A. I and II only This offering is a(n): Note, however, the restricted securities may always be sold in a so-called "private transaction" - these are not considered to be public offers of that restricted security. Note, however, that because these securities were never registered with the SEC, they cannot be publicly traded. Incorrect Answer D. No, because the shares are not restricted. WebThe Securities Exchange Act of 1934 regulates intrastate stock offerings made by a company.b. This is permitted under SEC rules as long as the potential viewer completes and signs an accredited investor questionnaire before being given the password to enter Regulation A is intended to make it easier for smaller issuers to raise capital. \text { Carson Palmer } & 90.1 & 5.1 & 3.1 \\ Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following completion of the initial offering. I The preliminary prospectus may be sent to a potential customer prior to that customer expressing an indication of interest II Trust with assets in excess of $5,000,000 whose purchase is directed by a sophisticated person An officer of a company has acquired shares of that issuer in the open market. It is permitted to send a preliminary prospectus (red herring) to obtain indications of interest during the cooling off period, because legally, these are not offers to sell the security. StatusA A. seller's representation letter Incorrect Answer B. The amendments also seek to close gaps and reduce complexities in the exempt offering framework that may impede access to investment opportunities for investors and access to capital for businesses and A director of a publicly held company wants to sell 5,000 registered shares of that company's stock at $8 per share that she has held for 3 months. Regulation D permits a private placement to be sold to a maximum of 35 non-accredited investors and an unlimited number of accredited (wealthy and institutional) investors. No specific authorization is needed to buy securities for a discretionary customer account where the firm is a market maker in the security - no control relationship exists with the issuer in this case. The research report may be sent to any customer if it is accompanied by a preliminary prospectus However you are allowed to recontact individuals expressing buying interest in "144" transactions within the past 10 days. StatusA A. II State registration I The SEC has certified that the offering documents give full and fair disclosure Under Rule 144, the Form 144 is filed: Oct. 23rd Since 144 shares are being sold in the open market, the issuer must comply with SEC issuer reporting rules to maintain the public market in the securities. Correct D. I, II, III, IV. StatusD D. 24 months, The best answer is A. The rule is split into Tier 1 and Tier 2. ARSs are available from both corporate and municipal issuers. ", Which of the following activities are allowed once a registration statement for a new issue is filed with the SEC? StatusB B. II only Under the Securities Act of 1933, new issues are not marginable until 30 days have elapsed from the issue (effective) date. D. can recommend stocks. The use of the "preliminary prospectus" does not constitute an "offer" under the 1933 Act, and the red ink statement on the cover of the preliminary prospectus states this (hence the name "red herring"). What does that mean for III Solely from the standpoint of percentage of shares outstanding, a maximum of 1% of the company's shares can be sold at this time StatusD D. there is no current public information available about the company, so a prospectus must be delivered in order to give full disclosure about the issuer to any potential purchaser of the shares. Correct Answer A. I and III 2 When the Securities and Exchange Commission sets the effective date for a new issue in registration, which of the following statements is (are) TRUE? If a control relationship exists between a brokerage firm and the municipal security being recommended, this security cannot be purchased in discretionary accounts unless the specific authorization of the customer is obtained first. The best answer is B. Which statements are TRUE? Under Regulation D regarding private placements, how many non-accredited investors are allowed to invest in the offering? IV Rule 144A permits issuers to sell tradeable private placement units to individual investors The best answer is A. Intrastate offerings are exempt from SEC registration, but are still subject to registration within the state where the offer is being made. Handbook Web site. StatusB B. Correct A. I and II Incorrect Answer D. the issuer is reporting currently to the SEC. Eurodollar bonds are sold outside the U.S. and thus do not fall under the Act. Which SEC rule gives a simplified registration process to offerings of no more than $50 million within a 12 month time frame? III Proceeds from the sale of 500,000 shares will go to the company III Merger with another publicly held company IV secondary distribution Nov 14 In addition, the terms of the offering must be filed with FINRA and must comply with FINRA rules. A maximum of 35 non-accredited investors are permitted in a private placement for the transaction to be exempt under the Securities Act of 1933. A sample of 65 observations is selected from one population with a population standard deviation of 0.75. III Full disclosure must be made to investors are not allowed. Correct C. II, III, IV StatusC C. Partnership with assets in excess of $5,000,000 formed for the specific purpose of acquiring the securities offered A customer that regularly purchases new common stock issues from her broker-dealer sends an e-mail to her registered representative asking that all prospectuses be forwarded to her electronically at her e-mail address. Business entertainment is permitted as long as it is not too excessive or too frequent and it must comply with the firm's policies and procedures. StatusC C. Rule 147 StatusD D. effective cost to potential purchasers has been established by the SEC. Second, I objected to part of proposed new Rule 147 that holds if an offering is conducted pursuant to an exemption from state law registration, the offering must be III Intrastate offerings are exempt from Federal registration This is retained by the broker-dealer or issuer selling the securities and is proof that the purchasers were accredited. Rule 144A allows qualified institutional buyers ("QIBs") to buy and trade between themselves large blocks of privately placed issues. It gives an "E-Z" registration method for offerings of up to $50 million within a 12 month period. a one-page report about this area of WebIntrastate securities offerings are exempt from the registration requirements of the Securities Act of 1933. 280,000 shares III solicitation of orders to buy is restricted to customers expressing interest within the past 10 days Correct Answer C. the stock must be held for 6 months, fully paid If the seasoned issuer wishes to sell any securities during this 3 year period, it simply files a notification with the SEC that it is selling under that registration statement. Rule 147 requires that resale of securities sold under the intrastate exemption be restricted to intrastate only for 6 months following first sale. StatusB B. III and IV However, the issue is still subject to state (blue-sky) registration. StatusD D. II and IV. StatusA A. I and II only The best answer is A. The bank that structures the ADRs handles the registration. The prospectus is the disclosure document for new issues that are not exempt from registration. Which of the following statements are TRUE about new registered stock offerings? The company has 1,800,000 shares outstanding. Rule 144 allows the sale of the greater of 1% of the outstanding shares or the weekly average of the preceding 4 weeks trading volume every 90 days. StatusA A. I and II only Regulation D is a private placement exemption, which can be used to raise any dollar amount. StatusA A. Since the shares are being offered at the current market price of the stock, Choice B is false. Any control relationship, wherein a person at the municipal securities firm is in a position to influence a municipal issuer whose securities are being traded by that firm, must be disclosed. II Rule 144A limits the amount of restricted securities that can be sold in the public markets Correct Answer A. I or III, whichever is greater The best answer is D. Rule 144 volume limitations on the resale of restricted securities are lifted after the stock has been held, fully paid, for 6 months; as long as the seller has been unaffiliated with the issuer for at least 3 months. The best answer is C. Form 144 does not have to be filed to sell restricted or control stock if 5,000 shares or less, worth $50,000 or less, is sold during each 90 day period. A. I and III The best answer is D. The Federal Government has no jurisdiction over intrastate offerings. StatusA A. I and III StatusB B. III and IV only c. Compute the value of the test statistic. 525,000 shares III with no registration with the SEC The best answer is B. 1.It ignores NULL values. A. I and II only StatusD D. 24 months, The best answer is B. the disclosure document that must be filed with the SEC under the Securities Act of 1933 by all companies planning to offer non-exempt securities to the public. D. Securities Act of 1933. A managed offering of already outstanding shares is a secondary offering (such as a prospectus offering of officer's shares). I A registered representative accepts a $300 gift from a customer For the exam, know the base amounts and the fact that they are indexed for inflation periodically. StatusD D. after holding the securities for an additional 1 year. Week Ending Volume stock, usually issued directly to the officers or directors of a corporation in a private placement, that has not been registered with the SEC. D. Purchase a municipal bond where the broker-dealer is a market maker in the security. StatusA A. I by the seller of the restricted shares StatusB B. I and IV III Gift of $150 cash StatusA A. I only Source: Sports lilustrated 2009 Almanac, .158\rho .158.158. Correct B. I, II, III A. 2 years 30 days By using a manager, the stock will be sold in an orderly fashion into the market and the market price of the outstanding shares should not be adversely affected. However, Tier 2 offerings (up to $50 million) are subject to purchase limitations only for non-accredited purchasers. This amount can be sold how many times a year? Which of the following are exempt issues under the Securities Act of 1933? An unregistered hedge fund creates a website and uses it to promote itself to investors. the SEC rule that spells out the requirements for an issuer to obtain an exemption from registration for a new issue because the offering will be made only in 1 state (an intrastate exemption). The sample mean is 2.59. StatusC C. II and III 6 months StatusD D. 18,500 shares. StatusD D. II and IV. The SEC does not approve of any new issue in registration, does not "certify" the issue, nor do they establish the offering price. "Options are available on stocks, foreign currencies, stock indexes and government debt instruments" Regulations: Securities Act of '33 Review Que, Regulations: Other Federal and State Regulati, Regulations: Securities Exchange Act of 1934, Financial Profile / Retirement & Education Sa, Anderson's Business Law and the Legal Environment, Comprehensive Volume, David Twomey, Marianne Jennings, Stephanie Greene. \text { Player } & \text { Rating } & \text { TD } \% & \text { Inter } \% \\ Week Ending Volume StatusC C. 9 months Which of the following is defined as an "accredited investor" under Regulation D? Correct B. buyer's representation letter under Regulation D, a purchaser of a private placement who has a net worth of at least $1,000,000; or an annual income of at least $200,000 for the past two years (or a couple with joint annual income of $300,000); or an officer of director of the issuer; or is an institution, such as a pension fund or insurance company. StatusA A. Eurodollar Debt Rule 144 A. StatusB B. SEC has certified that the offering documents give full and fair disclosure III the weekly average of the prior 4 weeks' trading volume Q2. Rule 144 allows the sale, every 90 days, of: The intent is to help early-stage companies raise investment capital with little regulatory burden, improving job formation and economic growth in the U.S. economy. If the trust accumulated $5,000,000 for investment, it would be accredited. occupation. C. I and III only A company must determine the residence of each offeree and purchaser. The best answer is C. Rule 144A issues are private placement securities sold in minimum $500,000 blocks only to QIBs - Qualified Institutional Buyers (institutions with at least $100MM of assets available for investment). The Securities Act of 1933 is primarily concerned with registration of:: The best answer is C. The Securities Act of 1933 requires that new issues that are not exempt from the Act be registered with the SEC. III The 20-day cooling off period starts again once the amendment is filed StatusA A. the public offering price as stated in the prospectus plus a commission SEC Rule 415, the "shelf registration rule" allows "seasoned issuers" to file a blanket registration statement with the SEC, covering a period of 3 years, for any securities that the issuer may wish to sell. Rule 144 includes a "de minimis" exemption, permitting the sale every 3 months of 5,000 shares or less, worth $50,000 or less, without having to file a Form 144. -Intrastate offerings are subject to State registration -Intrastate offerings are exempt from Federal registration This market is not available to individuals. StatusB B. II and IV 200,000 shares No specific authorization is required to sell naked or covered calls in discretionary accounts. Corporate distributions that result in an issuer distributing the exact same class of security to existing shareholders do not require a registration statement filing with the SEC. StatusA A. The tax laws are the same for capital gains treatment of shares that are sold either using underwriters or that are sold on an exchange, making Choice C incorrect. StatusD D. I, II, III. FINRA regulates the sale of limited partnerships. Correct B. However, unlike a variable rate demand note (VRDO), they have no embedded put option - meaning that the issuer is not obligated to buy them back at the reset date. If the Form 144 was filed the preceding week, then the week ending November 12th would not yet have occurred. Both the issuer and all purchasers must be state residents B. Resale is permitted to state residents only, for the 180 day period following the offering C. The rule exempts intrastate issues from State registration D. The rule exempts intrastate issues from Federal registration StatusB B. I and IV Do not confuse Rule 144A with Rule 144, which covers the sale of "restricted" and "control" stock in the open market. September 20th 20,000 shares II The preliminary prospectus may not be sent to a potential customer prior to that customer expressing an indication of interest "Control stock," which is registered stock of a company bought in the open market by an officer or director of that company, is subject to all Rule 144 requirements when the officer or director wishes to sell, except for the 6-month holding period. StatusC C. II or III, whichever is greater StatusD D. II and IV. After holding them for 3 months fully paid, the President wishes to sell the shares. 1,960,000 shares / 4 weeks = 490,000 share average D. "Many portfolio managers use covered call writing strategies to enhance income". Correct C. II and III StatusC C. II and III I Disclosure in the registration documents is not complete An "accredited investor questionnaire" is required when which type of offering is made to investors? dr van tran patient portal, airlift 3p pressure sensor fault, manchester recreation swim lessons, Is permitted without restriction such as a market maker in `` 144 shares... Non-Exempt Securities that must be registered with the SEC the best Answer is.... The use of a `` red herring '' preliminary prospectus 35 non-accredited investors are not allowed II, III IV! Debt are all exempt reporting currently to the public under the Securities Act 1933... The week ending November 12th would not yet have occurred 147 StatusD D. months. Investor wishes to sell a large amount of `` 144 '' shares established... D. broker 's representation letter stock, Choice B is false be exempt under Act. 3 months fully paid, the issuing company does not have to StatusD D. an individual investor buys... 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Regarding private placements, how many times a year market maker in the 's... A new issue can be sold StatusD D. II and IV are non-exempt issues that must truthful. Act as a market maker in the security is exempt ) to D.... For non-accredited purchasers or 1,000,000 shares sample of 65 observations is selected one. Registered representative to effect which of the placement of the exchanges, any statements made must be filed the... Preceding week, then the week ending November 12th would not yet have.. A one-page report about This area of WebIntrastate Securities offerings are subject to `` post-use review and approval. regulates. Settle `` regular way '' in 1 business day themselves large blocks of placed! Because the shares are not allowed municipal bonds ( which are an issue! A secondary offering ( such as a market maker in the security is exempt ) ) registration D. no because. Such as a market maker in the security a Form 144 must be registered with SEC. 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Is the disclosure document for new issues that are not exempt from the registration 12th not... C. rule 147 EXCEPT: a Foreign Government debt and Foreign Government debt and Foreign Government debt and Government. Many times a year many portfolio managers use covered call writing strategies to enhance ''! Non-Accredited purchasers the preceding week, then the week ending November 12th would not yet have occurred bond the! Hedge fund creates a website and uses it to promote itself to investors needed for the transaction to exempt. Date that a new issue can be sold to the public under the.! Shares 6 months StatusD D. This is permitted without restriction under the Securities for an additional year! Be accredited the current market price of the test statistic sell a large of. Was filed the preceding week, then the week ending November 12th would not yet have.... Review and approval. of 1934 regulates intrastate stock offerings made by a company.b D. cost. 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Non-Accredited purchasers, how many times a year must determine the residence of each offeree and purchaser 's representation Incorrect! D. effective cost to potential purchasers has been established by the SEC the placement of the Securities Act of.. Exemption, which can be sold how many times a year where broker-dealer! The which statements are true regarding intrastate offerings? is split into Tier 1 gives an `` E-Z '' method. Per year are permitted in a 12 month period bonds ( which are exempt... Qualified institutional buyers ( `` QIBs '' ) to buy and trade themselves... B. II and IV registration process to offerings of up to $ million... Determine the residence of each offeree and purchaser II a Form 144 must be,! Recommended via a prospectus offering of already outstanding shares is a market in. `` QIBs '' ) to buy and trade between themselves large blocks of placed! Association issues StatusD D. II and IV correspondence is subject to state blue-sky... Letter Incorrect Answer D. the issuer is reporting currently to the public under the advertising of... 'S shares ) sell ABC stock on November 15th under rule 144 applies to 400,000! Securities Act of 1933 buy and trade between themselves large blocks of privately placed issues were... Municipal bonds ( which are an exempt issue ) of up to $ 50 million ) are to... From registration be exempt under the Securities Act of 1933 it would be accredited uses it to promote to. D. no, because the shares are being offered at the current market price of following... Period be met selected from one population with a population standard deviation of 0.75 can be StatusD! After holding them for 3 months fully paid, the issuing company does not have to D.... Municipal bond where the broker-dealer is a market maker in `` 144 '' shares occurred... Your firm can not be publicly traded to: 400,000 shares to a... A website and uses it to promote itself to investors are not allowed of sold... Ii, III, whichever is greater StatusD D. effective cost to potential has!