FINRA Rules and Regs Flashcards
The ‘34 Act established the
SEC/CBOE/MSRB/NYSE/SROs and old NASD
When must you need prior principal approval for sales lit and ads
When you are marketing to retail clients - letters - seminars - research reports - form letters - reprints MUST retain for 3 years
When can you have post approval on sales lit and ads?
For institutional investors - banks, Mutual Fund Cos, Insurance Copmanies
When is no approval required
Correspondance (personal communication)
Written/Electornic personal communications
Form letters for under 25 or fewer within 30 days
What is the ‘33 Act
Full and fair disclosure, new issue act, prospectus act
Dead Fish On Ice @ party without SEC
What is the difference between a red herring and prospectus
the final offering price
What does the tombstone ad provide
Indication of Interset
Notification of sale
~ share amount
Preliminary prospectus
What is the UW spread
the difference between the offering price and proceeds to the issuer
What is Best Effort UW
When the underwriters take on no liability for unsold shares
How do you break down the total takedown?
.10 fee managing uw takes
.25 uw fee - paid for taking risk
.65 consession for selling the security
What determines the offering price
PE of other companies
Indication of Interest
What is a discressionary order
One where the amount or # of shares, action, and asset are authorized by customer AND approved by manager for the FA to move upon order
*principal approval
What is on the new account form
name/address/marital sttus, id verification, occupation
must be signed by principal
must be sent within 30 days and every 36 months
What determines suitability
ALWAYS the investment objective
When special situations arise…
Money Markets - liquidity (down payment on home)
Muni Bonds - High tax bracket (tax advantages)
Zero-Coupon - long-term saving (college)
