IPO Restrictions
Chapters in this video
- 0:00 Bona fide public offerings and the ticket scalper analogy
- 1:58 Who qualifies as a restricted person
- 3:35 The three circumstances test for immediate family
- 5:46 Exceptions for investment companies and 10% de minimis
- 7:48 Written representation and 12-month compliance window
- 8:59 Rapid-fire exam recap
What this video covers
- The purpose of a bona fide public offering and why FINRA blocks insiders from hoarding underpriced IPO shares
- The full restricted person list, including member firms, associated persons, finders, fiduciaries, and portfolio managers using their own accounts
- Why immediate family members are defined broadly yet are only restricted based on three specific circumstances, not title alone
- How the 10% de minimis exception allows accounts with limited restricted person interest to still purchase IPO shares
- The key distinction between the offering price and the aftermarket, and why restricted persons can buy in the secondary market
- Why the written representation must be obtained before the sale and within 12 months prior
- The 3-year recordkeeping requirement that applies after the last new issue sale to an account
Read the full lesson, free
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