CSCP CSCP Regulatory Reporting & Disclosures 1 — Questions and Answers
Question 1: Under SEC Regulation S-K, what is the primary purpose of the Management's Discussion and Analysis (MD&A) section in a public company's annual report?
- To list all company employees
- To provide management's perspective on financial condition, results of operations, and liquidity (Correct answer)
- To disclose all pending litigation in full detail
- To summarize the auditor's opinion
Correct answer: To provide management's perspective on financial condition, results of operations, and liquidity
MD&A requires management to explain the company's financial results, liquidity, capital resources, and known trends that may materially affect future performance.
Question 2: What is the deadline for a large accelerated filer to file its annual report (Form 10-K) with the SEC?
- 30 days after fiscal year end
- 45 days after fiscal year end
- 60 days after fiscal year end (Correct answer)
- 90 days after fiscal year end
Correct answer: 60 days after fiscal year end
Large accelerated filers (public float of $700 million or more) must file their Form 10-K within 60 days of their fiscal year end.
Question 3: FINRA Rule 4370 requires member firms to maintain and update business continuity plans (BCPs). When must a firm notify FINRA of a material update to its BCP?
- Within 24 hours
- Within 17 business days (Correct answer)
- At least annually
- Only when activating the plan
Correct answer: Within 17 business days
FINRA Rule 4370 requires firms to promptly update their BCPs and notify FINRA and customers within 17 business days of a material change.
Question 4: Which form must a registered representative file when they terminate employment with a FINRA member firm?
- Form U4
- Form U5 (Correct answer)
- Form BD
- Form ADV
Correct answer: Form U5
Form U5 (Uniform Termination Notice for Securities Industry Registration) is filed by the firm to report the termination of a registered representative.
Question 5: What disclosure obligation arises under SEC Rule 10b-5 when a company executive learns of a material acquisition before public announcement?
- The executive must file a Form 4 immediately
- The executive must abstain from trading and ensure no trading on non-public information until disclosure (Correct answer)
- The executive must notify the board within 24 hours
- The executive may trade if they report it within 10 days
Correct answer: The executive must abstain from trading and ensure no trading on non-public information until disclosure
Rule 10b-5 prohibits trading on material non-public information; the only compliant options are to disclose the information or abstain from trading.
Question 6: Under the SEC's Regulation Fair Disclosure (Reg FD), what must a company do if it unintentionally discloses material non-public information to a select group of investors?
- File a Form 8-K within 24 hours and make the information public (Correct answer)
- Notify the SEC within 10 days
- Issue a press release within 30 days
- Take no action if the disclosure was accidental
Correct answer: File a Form 8-K within 24 hours and make the information public
Reg FD requires that if material non-public information is unintentionally disclosed, the company must make public disclosure via Form 8-K or other means promptly, within 24 hours.
CSCP CSCP Regulatory Reporting & Disclosures 1
Under SEC Regulation S-K, what is the primary purpose of the Management's Discussion and Analysis (MD&A) section in a public company's annual report?