Chapter 4

Question 1

True/False
With the passage of Dodd-Frank index annuities,equity index annuity, fixed index annuity are not considered Securities. Finra still takes an interest in their sale by members because in many instances the purchase money comes from the proceeds of a recommeded security sale.

Answer 1

TRUE

Question 2

True/False

There is no minimum EPS requirement to qualify for NYSE listing.

Answer 2

TRUE

Question 3

A voluntary delisting from NYSE requires the issuer to file form 25 with NYSE and SEC and for the board of directors to approve.

Answer 3

TRUE- The issuer must furnish the NYSE with a certified board resolution evidencing board approval.

Question 4

DMM obligations

Answer 4

• To Quote NBBO a specified percentage of the Time
• Not held orders can not be accepted by DMM
• DMM firm is responsible for setting the opening quote in stocks it represents
• The DMM must meet strict depth and continutity standards

Question 5

True/False-
Only DMMs and SLPs are eligible to partcipate as retaill liquidity providers who privide price improvement for retail orders.

Answer 5

True- retail orders are agency orders that come from a natural person. They can not orginate from an algo.

Question 6

True/False

Buy limit and sell stop orders are reduced on the ex date.

Answer 6

True. Those orders put above the market, Sell limit and buy stops are not adjusted on the exdate.

Question 7

True/False

For reverse stock splits, all open orders both above and below market are cancled.

Answer 7

True

Question 8

T/F

Only a DMM may accept not held orders

Answer 8

False- Not held orders are not accepted by DMM’s. Only floor brokers and 2 dollar brokers may accept not held orders

Question 9

T/F

A DMM may not trde for its own account

Answer 9

False- DMM’s can trade for its own account

Question 10

During market wide halts that close trading for the remainder of the day. the following rules apply

Answer 10

-Orders pending at time of halt and new orders received after halt shud be treated as GTC and held by firm for execution for the reopening of the next day trading session.

At the close orders pending should be cancled and new ATC recieved shud be declined

SEC is authorized to suspend trading in any nonexempt security for up to 10 business days and suspend trading on any national stock exchange for 90 calendar days only if president does not disapprove

Question 11

To qualify for GSM, Global Market and the capital Market issuers must meet certain minimum criteria that relate to:

Answer 11

Total assets, net worth, number of publicly, bid prices, pretax income and so forth.
Minimum price of $4 for initial inclusion and $1 per share for continual listing, 3 market makers for inclusion and 2 MM for continued listing.

Companies listed on another exchange may qualify for a capital market listing under market cap listing standard.

Min 2 indep directors
Audit commitee
Quarterly and annual reports
Annual meeting
Soliciting proxies
isting agreement with finra