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Flashcards in customer accounts Deck (21):
1

what form is required for all new accounts?

new account form

2

when must a copy of new account form be sent to customer to verify information?

within 30 days

3

how often must a firm verify account information?

every 36 months

4

when is a privacy notice sent to customers?

-at time account is opened
-annually after account is opened

5

describe a joint account

requires two or more signatures

6

describe a JTWROS

joint tenants with rights of survivorship
-assets divided evenly

7

describe a TIC

tenants in common
-assets divided per customer instructions

8

what do partnership agreements contain?

-partnership resolution
-partnership agreement

9

describe power of attorney on limited trading authorization

allows a person to trade on another persons account only.

10

describe power of attorney on full trading authorization

allows a person to trade and withdraw money and securities on another persons account

11

describe a discretionary account

registered representative is a third party

12

discretionary accounts must be approved by who and when?

by principal and before first trade

13

describe UGMA

uniform gift to minors act
-reregistered in minor's name at age 18

14

describe UTMA

uniform transfers to minors act
-reregistered in minor's name as late as age 25

15

gift from grandfather to kid of 1,000,000
1. who pays gift tax?
2. who pays tax on earnings?
3. who prepares taxes?
4. what tax bracket is gift taxed?

1. grandfather
2. child
3. custodian
4. parents tax bracket

16

what happens to a customers account if they die?

1. cancel open orders
2. mark the account deceased
3/ await proper legal papers and instructions

17

purpose of the SIPC?

industry funded insurance
-provides coverage to customer with assets held in brokerage firm who goes bankrupt

18

describe coverage limits of SIPC

-$500,000 total (cash and securities)
-$250,000 cash total
-coverage per separate customer

19

what is not covered by the SIPC

-commodities
-futures contracts

20

what type of accounts are billed a single fee annually for a group of services?

wrap accounts

21

what is the USA Patriot Act?

the federal legislation that requires broker/dealers to verify the identity of any person opening an account