15: HANDLING CUSTOMER ACCOUNTS (92)

Question 1

Is there any specific schedule for when a firm has to update it’s AML rules?

Answer 1

No

Question 2

If a carrying member recieves account transfer instructions from the recieving member, how long does it have to validate the positions in the account?

Answer 2

Just 1 day

Question 3

What does ACATS stand for

Answer 3

Automated Customer Account Transfer Service

Question 4

How long must customer statements be kept

Answer 4

6 years

Question 5

How long must copies of retail communication be kept?

Answer 5

3 years

Question 6

How long can a firm hold a customer’s mail for if they recieve written instruction to do so?

Answer 6

3 months

Can hold mail for up to 3 months

Question 7

T/F: A bond confirmation for a bond called under an in-whole call provision will show the lower of YTM or YTC

Answer 7

False

If bond was called in an in-whole call provision, will show YTC since it’s ceritan the bonds will be called

Question 8

If there is an in-part call on a bond and there’s uncertainty as to what bonds will be called, how is it determined what yeild to show on the confirmation?

Answer 8

The lower of YTC or YTM will be used

Question 9

T/F: Typically, new municipal bond issues are sold to investors before the bonds are issued and available for delivery

Answer 9

True

Question 10

Would the settlement date be shown on a when issued bond confirmation?

Answer 10

No

because the bonds aren’t available for delivery the settlement date is unknown

Question 11

Would accrued interest show up on a when-issued bond confimration?

Answer 11

No

since we dk the settlement date, can’t compute accrued interest

Question 12

T/F: Firms must create a record for each written agreement entered into with a client

Answer 12

True

Question 13

Under SEC rules, if a customer changes investment objectives the firm must provide an updated account record reflecting the change within ____

Answer 13

30 days of the change

Question 14

If a retail customer buys new issue muni bonds, does the official statement have to be delivered at settlement?

Answer 14

Yes

The confirmation and official statement must be sent no later than settlement

Question 15

T/F: When customers receive their account statements, they will generally include the
trade dates of all transactions during the statement period.

Answer 15

False

>Trade dates appear on trade confirmations.

Question 16

T/F: All customer accounts, other than those containing penny stocks, receive account statements quarterly

Answer 16

True

>Quarterly statements unless account has penny stocks