CIRO Regulatory Compliance & Governance 4

Question 1

Under NYSE listing rules, which board committee must be composed entirely of independent directors?

Accepted Answer

Audit, Compensation, and Nominating/Governance Committees

Answer

NYSE rules require that the audit, compensation, and nominating/corporate governance committees consist entirely of independent directors.

Question 2

A material weakness in internal controls over financial reporting (ICFR) disclosed under SOX Section 404 typically requires the company to:

Accepted Answer

Disclose the weakness in the annual report and describe remediation steps

Answer

Companies must disclose material weaknesses in their 10-K and describe management's remediation plan; restatement is only required if financials were misstated.

Question 3

Under SEC Rule 144, which condition allows an affiliate to sell restricted or control securities without registration?

Accepted Answer

Filing a Form 144 with the SEC for sales exceeding 5,000 shares or $50,000

Answer

Affiliates must file Form 144 concurrently with sales exceeding 5,000 shares or $50,000 in value within a three-month period.

Question 4

A company adopts a shareholder rights plan (poison pill). From an IR governance perspective, best practice is to:

Accepted Answer

Submit the plan for shareholder ratification and disclose its terms clearly

Answer

Governance best practice and investor expectations call for shareholder ratification and full transparent disclosure of poison pill terms.

Question 5

The SEC's Regulation S-K Item 303 requires companies to include in their annual and quarterly reports:

Accepted Answer

Management's Discussion and Analysis (MD&A) of financial condition and results of operations

Answer

Item 303 of Regulation S-K mandates Management's Discussion and Analysis, providing narrative context around the financial statements.

(CIRO) Certified Investor Relations Officer Practice Test

(CIRO) Certified Investor Relations Officer Practice Test

CIRO Regulatory Compliance & Governance 4