Practice Test Geeks(CEP) Certified Equity Professional Practice Test
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Legal & Regulatory Compliance Flashcards

7 cards from real CEP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Legal & Regulatory Compliance flashcards as text

  1. Under Rule 10b5-1, a trading plan must be established when the insider is:

    Answer: Not aware of any material nonpublic information

    Rule 10b5-1 plans must be adopted when the insider does not possess material nonpublic information to provide an affirmative defense against insider trading allegations.

  2. Which SEC form must be filed within two business days of a Section 16 officer acquiring company equity securities?

    Answer: Form 4

    Form 4 must be filed within two business days of any change in a Section 16 insider's beneficial ownership of company equity securities.

  3. The short-swing profit rule under Section 16(b) applies to profits realized from a purchase and sale (or sale and purchase) of company securities within:

    Answer: Six months

    Section 16(b) requires disgorgement of profits from any purchase and sale, or sale and purchase, of company equity securities within any six-month period by covered insiders.

  4. Which Dodd-Frank Act provision requires companies to implement a clawback policy for executive compensation?

    Answer: Section 954

    Dodd-Frank Section 954 requires listed companies to adopt policies to recover incentive-based compensation from current and former executives following an accounting restatement.

  5. Under IRC Section 409A, which of the following is NOT a permissible payment trigger for deferred compensation?

    Answer: Employee's request for early withdrawal

    IRC Section 409A limits permissible distribution events to separation from service, disability, death, change in control, unforeseeable emergency, and a fixed date — not elective early withdrawals.

  6. A company's equity plan must receive shareholder approval for material amendments under which exchange listing requirement?

    Answer: NYSE Rule 303A.08 / Nasdaq Rule 5635(c)

    NYSE Rule 303A.08 and Nasdaq Rule 5635(c) require shareholder approval for material revisions to equity compensation plans.

  7. Which registration form is used to register securities to be offered to employees under equity compensation plans?

    Answer: Form S-8

    Form S-8 is the SEC registration form specifically for securities to be offered to employees under benefit and compensation plans, including stock option and ESPP plans.