What is an issuer under Securities Act?

(4) The term “issuer” means every person who issues or proposes to issue any security; except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of …

What is a promoter of the issuer?

A person or company who, acting alone or in conjunction with one or more other persons, companies, or a combination thereof, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of an issuer.

What is a promoter SEC?

The definition of “promoter” is found in Rule 405 of the Securities Act. Rule 405 defines “promoter” very broadly and includes officers, directors, and direct or indirect control persons of entities involved in the launch of an enterprise.

What is an ineligible issuer?

An issuer that meets any one of the following as of the relevant date of determination, as set out in Rule 405 under the Securities Act: an issuer in an offering of penny stock. …

What is an affiliate under the Securities Act?

The term “affiliate” is defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), as a “person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with,” an issuer.

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Who is considered an issuer?

101 et seq.), the trustee or debtor in possession will be considered the issuer in an offering under a plan or reorganization, if the securities are to be issued under the plan. Rule 501(h) under the Securities Act of 1933, 17 C.F.R. § 230.501(h).

Who are called promoters?

A promoter is an individual or organization that helps raise money for some investment activity. Promoters often tout penny stocks, an area where false promises and misrepresentation of the company or its prospects have become commonplace.

What are the duties of a promoter?

A promoter is someone, who has been connected with the business from the start. He can also be referred to as the starter of a business or the founder. He is responsible for raising capital from various sources and entering into the first agreements for the start of a business and incorporation of a company.

Is more promoter holding good or bad?

A stock that has low promoter holding but very high DII and FII holding is a good sign. A stock with low but increasing promoter holding is also considered good.

What is the purpose of Rule 144?

Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.

What is Rule 405 of the Securities Act?

Under Securities Act Rule 405, the Commission may grant waivers of ineligible issuer status “upon a showing of good cause, that it is not necessary under the circumstances that the issuer be considered an ineligible issuer.” Authority to act on applications for waivers from ineligible issuer status has been delegated …

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What does Wksi mean?

A WKSI is an issuer that, among other things, has a worldwide market value of its outstanding voting and non-voting common equity held by non-affiliates of $700 million or more, as of any date within 60 days of the determination date.

How do you tell if a company is a Wksi?

As of some date within 60 days of its eligibility determination date, it must have had an outstanding minimum $700 million in worldwide market value of voting and non-voting equity held by non-affiliates or have issued in the last three years at least $1 billion aggregate amount of non-convertible securities other than …