Capital Markets Handbook

by Burch, John C., Jr.; Foerster, Bruce S.; Securities Industry Association

• ISBN13: 9780735516427
• ISBN10: 0735516421
• Edition: 2nd
• Format: Paperback
• Copyright: 2001-06-01
• Publisher: Wolters Kluwer

Summary

The new Second Edition of the CAPITAL MARKETS HANDBOOK is indispensable for anyone dealing in today's fast-changing capital markets. Designed as an all-purpose desk reference, training manual, and tactical handbook, this updated edition is the most complete and current reference of its kind. it explains all the latest rules, practices, jargon, and strategies-from the essentials of U.S. securities laws To The latest stipulations for online offerings or pricing strategies for after-hours trading. Whether you're a newcomer or a seasoned deal-maker, The CAPITAL MARKETS HANDBOOK, Second Edition, gives you the fast answers and definitive explanations you need to master the intricacies of today's dynamic capital markets. The new Second Edition covers the following new trends and developments in Capital Markets: Financial Services Modernization Act of 1999 (Gramm-Leach-Bliley Act); Deal pricing in an after-hours trading environment and T 1 settlement; New types of institutional pot-equity offerings such as incentive or performance pot; Private placements under Rule 144A; Rule 144 And The sale of unregistered securities; Corporate repurchase of equity securities; and Online Dutch auctions. SIA Members and multiple copy enquiries, please contact Larry Teator at [e-mail] or call 1-888-871-9918.

Table of Contents

Foreword	p. xix
Preface	p. xxi
Acknowledgements	p. xxv
Introduction	p. xxix
Introduction to the Securities and Exchange Commission and Compilation of the Federal Securities Laws and the Glass-Steagall Act
Introduction to the Securities and Exchange Commission	p. 1
Background and Overview	p. 1
Divisions and Offices	p. 4
Division of Corporation Finance	p. 4
Division of Market Regulation	p. 4
Division of Investment Management	p. 5
Division of Enforcement	p. 5
Office of Administrative Law Judges	p. 6
Office of Administration and Personnel Management	p. 6
Office of the Chief Accountant	p. 6
Office of Compliance Inspections and Examinations (OCIE)	p. 7
Office of the Comptroller	p. 8
Office of Economic Analysis	p. 8
Office of Equal Employment Opportunity (EEO)	p. 8
Office of Executive Director	p. 9
Office of Filings and Information Technologies	p. 9
Office of the General Counsel	p. 9
Office of Information Technology	p. 10
Office of the Inspector General	p. 10
Office of International Affairs (OIA)	p. 10
Office of Investor Education and Assistance (formerly Office of Consumer Affairs	p. 10
Office of Legislative Affairs (OLA)	p. 11
Office of Municipal Securities	p. 11
Office of Public Affairs, Policy Evaluation and Research	p. 11
Office of the Secretary	p. 11
General SEC Information	p. 11
Compilation of Federal Securities Laws	p. 13
Securities Act of 1933	p. 13
Purpose of Registration	p. 15
The Registration Process	p. 15
Exemptions from Registration	p. 16
Capital Formation Alternatives	p. 17
Filing Fees	p. 20
Banking Act of 1933 (Glass-Steagall Act)	p. 31
Securities Exchange Act of 1934	p. 33
Corporate Reporting	p. 34
Proxy Solicitations	p. 34
Tender Offer Solicitations	p. 35
Insider Trading	p. 35
Short Swing Profits	p. 36
Margin Trading	p. 36
Trading and Sales Practices	p. 37
Corporate Reorganization	p. 37
Public Utility Holding Company Act of 1935	p. 38
Integration and Simplification	p. 39
Acquisitions	p. 39
Issuance and Sale of Securities	p. 39
Other Regulatory Provisions	p. 40
Trust Indenture Act of 1939	p. 41
Investment Advisers Act of 1940	p. 42
Investment Company Act of 1940	p. 43
Securities Investor Protection Act of 1970	p. 45
National Securities Markets Improvement Act of 1996	p. 46
Recent Development	p. 47
Financial Services Modernization Act of 1999 (Gramm-Leach-Bliley Act)	p. 48
Federal Reserve System	p. 49
Federal Reserve Regulations	p. 52
Underwriting Documentation
Underwriting Documents	p. 59
Distinction Between Firm Underwriting and Best-Efforts Offering	p. 59
Letter of Intent	p. 60
Due Diligence Examination	p. 60
Underwriting Agreement	p. 61
Delayed Delivery Contracts	p. 62
Representations and Warranties	p. 63
Underwriting Agreement Covenants	p. 63
Underwriter's Commitment and Default	p. 63
Issuance of Additional Securities and Lock-Up Agreements	p. 64
Conditions in the Underwriting Agreement and Comfort Letters	p. 65
Underwriter's Indemnification	p. 66
Termination of the Underwriting Agreement	p. 66
Agreement Among Underwriters	p. 67
Price Maintenance	p. 68
Claims Against Underwriters	p. 69
NASD and SEC Provisions	p. 69
Termination of the Agreement Among Underwriters	p. 69
Selected Dealer Agreement	p. 70
International Tranches	p. 70
Competitive Bidding	p. 71
Canadian Wrapper	p. 74
Ontario	p. 74
Quebec	p. 75
Underwriting and New Issue Marketing Processes
Underwriting Process	p. 77
Quiet Period	p. 82
Underwriting Custom, Tradition, and History	p. 83
Deal Pricing
Pre-Pricing Lead Manager Housekeeping Items	p. 89
Underwriting Account	p. 89
Tombstone Advertising	p. 90
Compliance Items for Initial Public Offerings	p. 90
Additional Items to Consider for Follow-On or Secondary Offerings of Equity Securities	p. 91
Important Pricing Day Details	p. 92
Pricing under Rule 430A	p. 93
Discussion Points/Negotiating Strategy	p. 95
Underwriting Compensation	p. 99
Corporate Financing Rule	p. 102
Intraday Pricing	p. 104
Post-Pricing Housekeeping Items	p. 104
Deal Pricing in an After-Hours Trading Environment and T+1 Settlement	p. 106
Forms of New Issue Distribution and Aftermarket Trading
Allocation and Confirmation of Underwritten Securities	p. 107
Over-Allotment and Penalty Bid	p. 109
Naked Short Position	p. 111
Trading Restrictions--Regulation M	p. 112
Penalty Clause in the Agreement Among Underwriters	p. 114
Offering Distribution	p. 114
Deal Allocation	p. 115
Institutional Pot	p. 117
Types of Institutional Pot--Equity Offering	p. 117
Jump Ball or Competitive Pot	p. 117
Capped Jump Ball	p. 118
Open Pot	p. 119
Fixed Compensation Pot	p. 119
Incentive or Performance Pot	p. 120
Stabilization	p. 121
Passive Market Making	p. 122
Private Placements Under Rule 144A	p. 124
Rule 144--The Sale of Unregistered Securities	p. 125
Corporate Repurchase of Equity Securities	p. 127
On-line Dutch Auctions	p. 128
Settlement and Delivery
Payment, Delivery, and Authority to Borrow	p. 133
Market Outs/Calamity Outs	p. 134
Termination	p. 136
Default	p. 136
Settlement with the Issuer	p. 137
Settlement with Underwriters	p. 139
Compliance
Free Riding and Withholding	p. 143
Firm Compliance--Compliance Desk and the Safe Harbor Cancellation Rule	p. 146
Qualified Independent Underwriter	p. 147
Conflicts Rule	p. 147
Regulation of the Allocation Process	p. 148
Self-Regulation Concept--Major Domestic and Selected International Securities Markets and Other Entities Interfacing With the Securities Industry
Industry-Wide Continuing Education	p. 152
Insider Trading	p. 152
Registration of Exchanges, National Securities Associations, and Other Entities	p. 153
Broker-Dealer Registration	p. 154
American Stock Exchange	p. 157
Arizona Stock Exchange	p. 157
Boston Stock Exchange	p. 158
Chicago Board Options Exchange	p. 158
Chicago Stock Exchange	p. 158
Cincinnati Stock Exchange	p. 158
International Securities Exchange	p. 158
Nasdaq Stock Market	p. 159
New York Stock Exchange	p. 159
Pacific Exchange	p. 159
Philadelphia Stock Exchange	p. 160
Third Market	p. 160
Fourth Market	p. 160
Appendices
Securities Industry Third-Party Service Providers and Publications	p. 171
Financial Printers	p. 181
Tombstone Advertising and Service Providers	p. 183
Rating Agencies	p. 187
Significant Dates in Securities Industry History	p. 191
Securities Act of 1933	p. 205
Securities Exchange Act of 1934	p. 285
General Rules and Regulations Promulgated Under the Securities Act of 1933	p. 591
General Rules and Regulations Promulgated Under the Securities Exchange Act of 1934	p. 657
Regulation M	p. 695
NASD Notices to Members	p. 717
National Securities Markets Improvement Act of 1996	p. 851
Electronic Communications Networks	p. 903
Investment Bank Service Marked Derivative Securities	p. 907
Glossary	p. 911
Bibliography	p. 971
Index	p. 977
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