E16.7

Multiple Choice-Registration of Securities These questions involve registration of new secu- rity issues with the SEC LO E16.7 Required In the registration and sale of new securities issues, the SEC provides a rating of the investment quality of the security 2. may not allow the registration to go effective if it judges the security's investment risk to be too a. great. 3 allows all registrations to go effective if the issuing company's extermal accountant is satisfied that disclosures and representations are not misleading. makes no guarantees regarding the registration statement's material accuracy. 4. b. come effective in conjunction with the public sale of securities, investors have the potential for legal recourse (for example, damage suits) against all of the following except In cases of false or misleading disclosure in a registration statement that the SEC has allowed to be- the Securities and Exchange Commission. the issuing entity 2 the underwriter (managing broker) of the sale. the issuing entity's external accountant. Which of the following is not required for the registration statements filed under the Securities Act 3 4 of 1933? 1. Nature and history of the issuer's business Description of the securities being registered Estimate of the net proceeds and the expected uses of the proceeds 4. Financial forecasts for the next two fiscal years 2 3 The 1933 Securities Act provides for a waiting period between the filing and effective dates of the registration. During this waiting period the registrant is prohibited from engaging in which of these activities? 1. Preparing any amendments to the registration statement. d. Accepting offers from poterntial investors to purchase securities being registered. 2. Placing an advertisement indicating who will accept orders for the securities being registered Issuing a prospectus in preliminary form. 3. 4