All-or-None Representations and Payment Handling

What this video covers

• The three conditions that make an all-or-none or mini-max representation honest: stated amount sold at specified price, within specified time, with seller receiving payment by specified date
• Why neither the representation rule nor the payment-handling rule states a fixed number of days, and how offering documents set the actual deadline
• The two equally valid methods for holding contingent funds: a separate bank account with the broker-dealer as agent or trustee, or a written escrow agreement with a bank
• Why co-mingling contingent funds in the broker-dealer's own operating account is the absolute prohibition under the payment-handling rule
• How a firm commitment offering is exempt from the representation rule because no sales contingency exists to misrepresent
• Why a firm commitment offering is exempt from the entire payment-handling rule, not only its separate-account and escrow requirements, including the prompt-transmission requirement
• How exam questions pair these two rules together and test whether you can distinguish what the firm promises from where the money sits