Series 79 practice questioneasyFINRA Rules Applicable to Investment Banking
Under FINRA Rule 5110, which of the following is considered underwriting compensation and must be disclosed in connection with a public offering?
- AA warrant issued to the underwriter as part of the offering✓ Correct answer
- BThe issuer's payment of SEC registration fees
- COrdinary legal fees paid to outside counsel
- DThe issuer's D&O insurance premium
Explanation
Why A — A warrant issued to the underwriter as part of the offering
Underwriting warrants are considered compensation and must be disclosed. Fees and insurance costs paid to third parties are not considered direct compensation to underwriters.
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