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Question 1 of 10
1. Question
Which of the following Member Private Offerings is/are incorrect while exempt from the requirements of this Rule
Correct
5122. Private Placements of Securities Issued by Members
Exemptions
(1) offerings of unregistered investment grade rated debt and preferred securities;
(2) offerings to employees and affiliates of the issuer or its control entities;
(3) offerings of securities issued in conversions, stock splits and restructuring transactions that are executed by an already existing investor without the need for additional consideration or investments on the part of the investor;
(4) offerings of securities of a commodity pool operated by a commodity pool operator, as defined under Section 1a(5) of the Commodity Exchange Act;
(13) offerings of equity and credit derivatives, including OTC options; provided that the derivative is not based principally on the member or any if its control entities;Incorrect
5122. Private Placements of Securities Issued by Members
Exemptions
(1) offerings of unregistered investment grade rated debt and preferred securities;
(2) offerings to employees and affiliates of the issuer or its control entities;
(3) offerings of securities issued in conversions, stock splits and restructuring transactions that are executed by an already existing investor without the need for additional consideration or investments on the part of the investor;
(4) offerings of securities of a commodity pool operated by a commodity pool operator, as defined under Section 1a(5) of the Commodity Exchange Act;
(13) offerings of equity and credit derivatives, including OTC options; provided that the derivative is not based principally on the member or any if its control entities; -
Question 2 of 10
2. Question
Regarding Confidential Treatment, which of the following statement(s) is/are true?
Correct
5122. Private Placements of Securities Issued by Members
Confidential Treatment
FINRA shall accord confidential treatment to all documents and information filed pursuant to this Rule and shall utilize such documents and information solely for the purpose of review to determine compliance with the provisions of applicable FINRA rules or for other regulatory purposes deemed appropriate by FINRA.Incorrect
5122. Private Placements of Securities Issued by Members
Confidential Treatment
FINRA shall accord confidential treatment to all documents and information filed pursuant to this Rule and shall utilize such documents and information solely for the purpose of review to determine compliance with the provisions of applicable FINRA rules or for other regulatory purposes deemed appropriate by FINRA. -
Question 3 of 10
3. Question
Which of the following statement(s) about Application for Exemption is/are true?
Correct
5122. Private Placements of Securities Issued by Members
Application for Exemption
Pursuant to the Rule 9600 Series, FINRA may exempt a member or person associated with a member from the provisions of this Rule for good cause shown.Incorrect
5122. Private Placements of Securities Issued by Members
Application for Exemption
Pursuant to the Rule 9600 Series, FINRA may exempt a member or person associated with a member from the provisions of this Rule for good cause shown. -
Question 4 of 10
4. Question
Regarding Filing Requirements, which of the following statement(s) is/are true?
Correct
5123. Private Placements of Securities
Filing Requirements
Each member that sells a security in a non-public offering in reliance on an available exemption from registration under the Securities Act (“private placement”) must: (i) submit to FINRA, or have submitted on its behalf by a designated member, a copy of any private placement memorandum, term sheet or other offering document, including any materially amended versions thereof, used in connection with such sale within 15 calendar days of the date of first sale; or (ii) notify FINRA that no such offering documents were used. Members must provide FINRA with the required documents or notification and related information, if known, by filing an electronic form in the manner prescribed by FINRA.Incorrect
5123. Private Placements of Securities
Filing Requirements
Each member that sells a security in a non-public offering in reliance on an available exemption from registration under the Securities Act (“private placement”) must: (i) submit to FINRA, or have submitted on its behalf by a designated member, a copy of any private placement memorandum, term sheet or other offering document, including any materially amended versions thereof, used in connection with such sale within 15 calendar days of the date of first sale; or (ii) notify FINRA that no such offering documents were used. Members must provide FINRA with the required documents or notification and related information, if known, by filing an electronic form in the manner prescribed by FINRA. -
Question 5 of 10
5. Question
While private placements are exempt from the requirements of this Rule, which of the following statement(s) is/are untrue?
Correct
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule: offerings sold by the member or person associated with the member solely to any one or more of the following:
(A) institutional accounts, as defined in Rule 4512(c);
(B) qualified purchasers, as defined in Section 2(a)(51)(A) of the Investment Company Act;
(C) qualified institutional buyers, as defined in Securities Act Rule 144A;
(D) investment companies, as defined in Section 3 of the Investment Company Act;Incorrect
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule: offerings sold by the member or person associated with the member solely to any one or more of the following:
(A) institutional accounts, as defined in Rule 4512(c);
(B) qualified purchasers, as defined in Section 2(a)(51)(A) of the Investment Company Act;
(C) qualified institutional buyers, as defined in Securities Act Rule 144A;
(D) investment companies, as defined in Section 3 of the Investment Company Act; -
Question 6 of 10
6. Question
Regarding Exemptions, which of the following private placements is/are not exempt from the requirements of this Rule?
Correct
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule:
(1) offerings sold by the member or person associated with the member solely
(2) offerings of exempted securities, as defined in Section 3(a)(12) of the Exchange Act;
(3) offerings made pursuant to Securities Act Rule 144A or SEC Regulation S;
(4) offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act and debt securities sold by members pursuant to Section 4(2) of the Securities Act so long as the maturity does not exceed 397 days and the securities are issued in minimum denominations of $150,000 (or the equivalent thereof in another currency);Incorrect
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule:
(1) offerings sold by the member or person associated with the member solely
(2) offerings of exempted securities, as defined in Section 3(a)(12) of the Exchange Act;
(3) offerings made pursuant to Securities Act Rule 144A or SEC Regulation S;
(4) offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act and debt securities sold by members pursuant to Section 4(2) of the Securities Act so long as the maturity does not exceed 397 days and the securities are issued in minimum denominations of $150,000 (or the equivalent thereof in another currency); -
Question 7 of 10
7. Question
Which of the following private placement is/are not exempt from the requirements of this Rule?
Correct
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule:
(1) offerings of modified guaranteed annuity contracts and modified guaranteed life insurance policies, as referenced in Rule 5110(b)(8)(E);
(2) offerings of non-convertible debt or preferred securities that meet the transaction eligibility criteria for registering primary offerings of non-convertible securities on Forms S-3 and F-3;
(3) offerings of securities issued in conversions, stock splits and restructuring transactions that are executed by an already existing investor without the need for additional consideration or investments on the part of the investor;
(4) offerings of securities of a commodity pool operated by a commodity pool operator, as defined under Section 1a(11) of the Commodity Exchange Act;Incorrect
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule:
(1) offerings of modified guaranteed annuity contracts and modified guaranteed life insurance policies, as referenced in Rule 5110(b)(8)(E);
(2) offerings of non-convertible debt or preferred securities that meet the transaction eligibility criteria for registering primary offerings of non-convertible securities on Forms S-3 and F-3;
(3) offerings of securities issued in conversions, stock splits and restructuring transactions that are executed by an already existing investor without the need for additional consideration or investments on the part of the investor;
(4) offerings of securities of a commodity pool operated by a commodity pool operator, as defined under Section 1a(11) of the Commodity Exchange Act; -
Question 8 of 10
8. Question
Regarding Exemptions, which of the following statement(s) is/are true?
Correct
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule: offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act and debt securities sold by members pursuant to Section 4(2) of the Securities Act so long as the maturity does not exceed 397 days and the securities are issued in minimum denominations of $150,000 (or the equivalent thereof in another currency);Incorrect
5123. Private Placements of Securities
Exemptions
The following private placements are exempt from the requirements of this Rule: offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act and debt securities sold by members pursuant to Section 4(2) of the Securities Act so long as the maturity does not exceed 397 days and the securities are issued in minimum denominations of $150,000 (or the equivalent thereof in another currency); -
Question 9 of 10
9. Question
If you are asked about Confidential Treatment, which of the following statement(s) do you think is/are true?
Correct
5123. Private Placements of Securities
Confidential Treatment
FINRA shall accord confidential treatment to all documents and information filed pursuant to this Rule and shall utilize such documents and information solely for the purpose of review to determine compliance with the provisions of applicable FINRA rules or for other regulatory purposes deemed appropriate by FINRA.Incorrect
5123. Private Placements of Securities
Confidential Treatment
FINRA shall accord confidential treatment to all documents and information filed pursuant to this Rule and shall utilize such documents and information solely for the purpose of review to determine compliance with the provisions of applicable FINRA rules or for other regulatory purposes deemed appropriate by FINRA. -
Question 10 of 10
10. Question
Regarding Fairness Opinions : Disclosures, which of the following statement(s) is/are true?
Correct
5150. Fairness Opinions
Disclosures
If at the time a fairness opinion is issued to the board of directors of a company the member issuing the fairness opinion knows or has reason to know that the fairness opinion will be provided or described to the company’s public shareholders,Incorrect
5150. Fairness Opinions
Disclosures
If at the time a fairness opinion is issued to the board of directors of a company the member issuing the fairness opinion knows or has reason to know that the fairness opinion will be provided or described to the company’s public shareholders,