Series 63 Last Minute

Exempt Security

(the issuer is trust-worthy)

based on the safety of the investment

ex: treasury bonds, municipal bonds, foreign government bond (good relations), commercial paper, common carrier, mutual fund shares

Exempt Transaction

(purchasers are limited and wealthy)

one time thing like a coupon for registration, you can only use it once

ex: private placement & institutional trades between issuers and underwriters

Registration by Coordination

used for IPOs being conducted publicly for the first time

(registration statement must be filed, along with 3 copies of the latest prospectus that was filed with SEC

“best efforts” underwriting

Registration by Qualification

Intrastate offering; used when an issuer is not registering with the SEC

prospectus must be delivered to an investor prior to sale (when offer is made)

What is the statute of limitations for civil liabilities

3 years from the occurrence, 2 years from discovery (3O 2D)

Security

Investment of money in a common enterprise with an expectation of profits, from the efforts of others

Set by the Howie Test (Supreme Court Ruling)

Viatical Investment

the purchase of an interest in an insurance policy covering an individual’s life; illiquid

only suitable for accredited investors of those with a minimum net worth of $250,000 (no residence); net worth of $150,000 with annual income of $100,000

What is NOT a security

Life Insurance

Endowment Policy

Fixed Annuities

Commodities

Collectibles

Currencies

Condos as a business or place of residence

What is considered a security

Option

Receipt

Certificate

Variable

Interest in

Securities Act of 1933

requires securities to be registered with the SEC to be offered or sold; prevents fraud by requiring investors be provided w/ enough relevant information about the offering to make an informed decision

Securities Exchange Act of 1934

established the SEC and governs the secondary market

National Securities Markets Improvement Act of 1996 (NSMIA)

eliminates the duplication of state and federal regulations

Who do Broker-Dealers register with

SEC, FINRA, & States

Who do Agents register with

FINRA & States

Who do Investment Advisors register with

SEC OR State

Who do Investment Advisor Representatives register with

States only

Pegging

buying large amounts of securities, to keep the price from falling

Capping

sale of securities to keep price from rising

When does an IA not have to meet brochure requirements

if they are giving impersonal advice to someone who pays less than $500 in fees per year

Advising an investment company registered under Investment Company Act of 1940

How long does the Administrator have after an agents termination to pursue action

1 year