Exam Weight: ~7 questions (5% of exam)
This unit covers the definition of a security, state and federal registration requirements, exempt securities and transactions, issuer definitions and obligations, antifraud provisions, and state enforcement authority.
What You'll Learn
- Master the definition of a security via the Howey Test, the three methods of state registration (filing, coordination, qualification), the exemption-versus-exclusion distinction, federal covered securities under NSMIA, the USA exempt-securities and exempt-transactions lists, Regulation D (the small-issue exemption up to $10M / 12 months, the traditional private-placement exemption, the verified-accredited-investor exemption), and Regulation A (Tier 1, Tier 2)
- Understand the definition of an issuer, the issuer-versus-non-issuer transaction distinction, registration of issuer agents and the four exclusions, and the role and risks of finders
- Learn the universal scope of USA antifraud (the general antifraud provision's three prongs and the materiality standard, the advisory antifraud provision with the principal-trading disclosure-and-consent rule), Administrator enforcement powers (stop orders, cease and desist, exemption revocation), and which exemptions the Administrator can and cannot revoke