Corporate Governance Regulatory Compliance & Disclosure 2

Question 1

What is the purpose of the SEC's EDGAR database?

Accepted Answer

A public system where companies electronically file and investors can access all SEC filings

Answer

A regulatory database tracking insider trading violations

Answer

An executive compensation benchmarking tool maintained by the SEC

Answer

A real-time market surveillance system monitoring trading activity

Question 2

What does the 'proxy statement' (DEF 14A) contain?

Accepted Answer

Information about matters to be voted on at the annual meeting, including director nominees and executive compensation

Answer

Audited financial statements required by SEC for annual reporting

Answer

A prospectus for new securities being offered to the public

Answer

A current report on material events occurring between quarterly filings

Question 3

What is 'insider trading' under US securities law?

Accepted Answer

Trading securities based on material nonpublic information in breach of a duty of trust or confidence

Answer

Any securities trading by company executives regardless of information basis

Answer

Trading company shares during the period before earnings are publicly released

Answer

Purchasing company shares immediately following a secondary offering

Question 4

What is a 'trading blackout period'?

Accepted Answer

A company-imposed window prohibiting insiders from trading company securities around earnings announcements or other material events

Answer

An SEC-mandated halt of all trading in a company's securities during an investigation

Answer

A FINRA rule prohibiting broker-dealers from trading during market circuit breakers

Answer

A lock-up period preventing IPO insiders from selling shares for six months post-offering

Question 5

What is a '10b5-1 trading plan'?

Accepted Answer

A pre-established trading plan that allows insiders to sell shares on a set schedule, providing an affirmative defense against insider trading claims

Answer

An SEC registration exemption for employee stock purchase plans

Answer

A FINRA-approved algorithm for executing large institutional trades without market impact

Answer

A plan filed with the SEC to disclose all future insider purchases within 30 days

Question 6

Which governance disclosure is required by the SEC's 2022 cybersecurity rules?

Accepted Answer

Material cybersecurity incidents must be disclosed on Form 8-K within four business days of determining materiality

Answer

All cybersecurity incidents must be disclosed within 24 hours of detection

Answer

Companies must annually disclose the number of attempted cyberattacks

Answer

The CIO must personally certify the company's cybersecurity posture in the 10-K