FC Chapter 5 Flashcards
(209 cards)
1
Q
What must be addressed in a BD’s business continuity plan?
A
The process for communicating with regulators and mission-critical systems (computers) required to continue business
2
Q
True or False: An office of convenience, used to occasionally meet with clients, may use signage if not too prominent.
A
False. Signage is not permitted for an office of convenience.
3
Q
True or False: An employee of a BD who deals exclusively with the sale of REITs is NOT required to be fingerprinted.
A
True
4
Q
True or False: All employees of a BD are required to be fingerprinted.
A
False. Clerical employees are not fingerprinted if they do not handle customer accounts, assets, or books and records.
5
Q
Define wrap account.
A
A managed account that charges clients an annual fee to cover trading, research, and advisory services
6
Q
A BD’s new applicant admits to a prior drug conviction (a misdemeanor). Is he subject to statutory disqualification?
A
No. However, the conviction must be disclosed on his Form U4.
7
Q
Any fine against an RR for greater than $______ must be reported to _______.
A
Any fine against an RR for greater than $2,500 must be reported to FINRA.
8
Q
If a qualification exam has been failed for the third time, what waiting period applies?
A
After the third unsuccessful attempt, the waiting period is 180 days after each additional attempt.
9
Q
Logan, an RR, has just obtained a Certified Financial Planner (CFP) designation. Must this be reported to FINRA?
A
No. SRO notification is not required due to obtaining a CFP or other designation.
10
Q
What form must be filed with FINRA at the time an associated person’s registration is terminated?
A
Form U5
11
Q
If a BD that operates on a bank’s premises fires one of its BD employees for cause, is the bank required to be notified?
A
No. The bank is only required to be notified if the terminated individual is also a bank employee.
12
Q
Beyond details on regulator communication and mission-critical systems, what is included in a business continuity plan?
A
The impact of a disruption of the firm’s counterparties, alternative locations for employees, and regulatory reporting
13
Q
If an associate requests a copy of his U5, how long does the member firm have to respond?
A
Response must be made within 2 business days of request.
14
Q
True or False: CRD provides a process for filing registration and withdrawal applications for individuals and BDs.
A
True
15
Q
How many days are representatives given to complete the Regulatory Element of Continuing Education?
A
120 days from the anniversary date of their initial securities registration.
16
Q
When is a firm’s business continuity plan made available to FINRA?
A
Promptly upon request
17
Q
How often are firms required to evaluate their training needs?
A
Annually
18
Q
To apply for a securities license, one must file Form _____ with FINRA.
A
To apply for a securities license, one must file Form U4 with FINRA.
19
Q
A branch that supervises one or more non-branch locations must be inspected ____________.
A
A branch that supervises one or more non-branch locations must be inspected annually.
20
Q
True or False: The CRD system may be used to process state registration applications.
A
True
21
Q
Who usually manages a wrap account?
A
An investment adviser
22
Q
What information does the CRD system provide about a registered person?
A
His employment and disciplinary history
23
Q
List some examples of appropriate training for a BD’s Firm Element program.
A
Investment features/risks of products or services, suitability and sales practice considerations, and regulatory issues
24
Q
The ______ is the office providing final approval of retail communication.
A
The OSJ (Office of Supervisory Jurisdiction) is the office providing final approval of retail communication.
25
True or False: A back office (operations office) is considered a branch office.
False. Back offices (operations offices) are non-branch locations.
26
Mary has been an RR for nine years. When is she next subject to the Regulatory Element of Continuing Education?
In two years, on the 11-year anniversary of her initial registration
27
Form U4 requires an applicant to disclose her employment history and convictions covering the last ____ years.
Form U4 requires an applicant to disclose her employment history and convictions covering the last 10 years.
28
Emma intends to advise on or facilitate mergers and acquisitions. What registration is required?
Series 79 - Investment Banking Representative
29
List some examples of items that would be unacceptable under an investment adviser's soft-dollar arrangement with a BD.
Office space, accounting fees, travel reimbursement, licensing fees, advertising/marketing expenses
30
If an RR works from home, his stationery, business cards, and other communications must show what address?
The address of his branch office
31
True or False: A member firm may compensate a non-member for a trade in an exempt security.
True
32
True or False: Geographic distance from another OSJ is considered when determining whether a branch is an OSJ.
True
33
An office whose sole function is to ________ investment banking services is NOT considered a branch office.
An office whose sole function is to solicit investment banking services is NOT considered a branch office.
34
A branch office that is NOT responsible for supervising another office is inspected every ______ years.
A branch office that is NOT responsible for supervising another office is inspected every three years.
35
With what orders may an Assistant Representative for Order Processing assist?
Only unsolicited orders (with approval of a registered person)
36
If a firm reduces its staff to avoid the Taping Rule, the individuals may not be rehired for ____ days.
If a firm reduces its staff to avoid the Taping Rule, the individuals may not be rehired for 180 days.
37
Define producing branch manager.
An individual who handles accounts as an RR, but also performs various supervisory functions
38
When is a non-branch office inspected?
Periodically
39
To determine whether a branch is an OSJ, the __________ and ___________ of the branch's activities are considered.
To determine whether a branch is an OSJ, the diversity and complexity of the branch's activities are considered.
40
How often must senior management be apprised of the status of the firm's supervisory control system?
Annually
41
Registration status becomes __________ if the Regulatory Element of CE is not completed within the prescribed period.
Registration status becomes inactive if the Regulatory Element of CE is not completed within the prescribed period.
42
True or False: An OSJ is only required to maintain a file of written complaints received from its own clients.
False. An OSJ must maintain written complaints received from its own clients and those of other supervised branches.
43
What are some of the functions performed through an OSJ?
Order execution, market making, structuring investment banking deals, and maintaining custody of client assets
44
True or False: All branch offices are inspected annually.
False. Branch offices that supervise one or more other offices are inspected annually.
45
If an associated person of a foreign BD visits a U.S. Institutional client, by whom must she be accompanied?
A registered person of a U.S. BD
46
What are the different methods a firm may use to provide disclosure regarding its business continuity plan?
A disclosure statement is provided at account opening, posted on its Website, or mailed to clients upon request.
47
True or False: When a BD operates on a bank's premises, SIPC must approve the arrangement.
False. There is no requirement for the SIPC to approve the agreement.
48
Along with written complaints, what must be maintained in every OSJ?
A copy of the firm's written supervisory procedures
49
True or False: Nonregistered foreign BDs who provide research to U.S. institutions may be exempt from registration.
True. An exemption is available provided certain guidelines are followed.
50
When is an RR working from home permitted to use e-mail for client communication?
If employer preapproval is obtained and the communication is routed through the firm's servers.
51
If a BD operates on a bank's premises, how does it generally obtain a client's acknowledgment of the potential risks?
The BD generally makes a reasonable effort to obtain written acknowledgment from clients.
52
Who is the executive representative of a BD.
The individual authorized to transact business with FINRA
53
True or False: An office of supervisory jurisdiction (OSJ) is inspected monthly.
False. An OSJ is inspected annually.
54
Invest Brokerage, a FINRA and MSRB member, has had its membership suspended by the MSRB. What action may FINRA take?
FINRA considers expulsion or suspension from membership with another SRO as grounds for statutory disqualification.
55
How must disclosures be made to clients when an account is opened on the premises of a financial institution?
They must be made both orally and in writing.
56
A brokerage office conducts market-making activities and maintains custody of clients' assets. What is this office?
An office of supervisory jurisdiction (OSJ)
57
True or False: An RR's primary residence may NOT be used to meet with clients.
True
58
If an individual has regular access to the firm's original books and records, is she required to be fingerprinted?
Yes, employees with regular access to books and records need to be fingerprinted.
59
Who supervises a producing branch manager?
The regional manager (i.e., someone who is senior to the producing branch manager)
60
True or False: A temporary location used less than 30 business days per year is a branch office.
False. If used less than 30 business days per year, a temporary location is a non-branch office (e.g., a vacation home).
61
How often must clients be notified of the availability of the BrokerCheck system?
Annually
62
True or False: The 3 parts of the A-B-C test for IAs are Advice about securities, being in the Business, and Commission.
False, the "C" of the investment adviser test is Compensation, not Commission.
63
True or False: Firm Element Continuing Education requires BDs to update employees on job and product-related subjects.
True
64
Related to an individual's registration, if an amendment is required, when must it be filed with the CRD?
Promptly
65
Holden has a Series 24 registration. Would he be permitted to accept a secondary market order for a closed-end fund?
Yes. A prerequisite for the Series 24 is holding a Series 7 registration.
66
List some examples of items that would be acceptable under an investment adviser's soft-dollar arrangement with a BD.
Research reports, access to analysts, portfolio analysis software, attendance fee for a securities conference/seminar
67
Is denial or revocation of registration by another securities regulator considered grounds for denial by FINRA?
Yes
68
What type of compensation may a Series 11 representative receive?
Wage, salary, bonus, but not commissions
69
What is the typical fee range assessed by BDs in a wrap account?
From 1% to 3% of assets under management
70
Who must be covered under a BD's Firm Element Continuing Education program?
Any registered person who has direct contact with clients and any person required to register as a research analyst
71
True or False: Preparation of retail communication is the responsibility of an OSJ.
False. Preparation may be done by a branch; however, approval must be provided by the OSJ.
72
Certification of the FINRA compliance process is attested to by the _____ of the BD.
Certification of the compliance process is attested to by the CEO of the BD.
73
Wrap accounts benefit clients who trade ___________.
Wrap accounts benefit clients who trade frequently.
74
What is an SRO?
Self Regulatory Organization, for example, FINRA or the MSRB.
75
If nonregistered, foreign BDs provide research to U.S. institutional clients, when may firms execute client trades?
When the trades involve securities covered by the report and the firms do not recommend executing through the foreign BD
76
When is a non-securities business office (i.e., an insurance office) not considered a branch office?
When it effects fewer than 25 securities transactions annually
77
True or False: An office where the firm's operations department processes securities trades is a branch office.
False. A back office/operations office (non-sales office) is NOT a branch office.
78
When is a BD employee NOT required to be fingerprinted?
When not engaged in selling securities, has no access to funds/securities, does not handle or process funds/securities
79
For what items may soft dollars be used?
Research reports and educational seminars, but not for items that does not benefit the client
80
Form U5 is filed with FINRA within ____ days of resignation or termination of association with a member firm.
Form U5 is filed with FINRA within 30 days of resignation or termination of association with a member firm.
81
If the CEO of a BD participates in sales activities, give an example of who may supervise the CEO's activities.
The compliance director of the BD, since this is someone who does not report directly to the CEO
82
True or False: If producing branch managers service accounts of family/friends, independent supervision is not required.
False. The independent supervision ensures protection of accounts from inappropriate actions by managers.
83
What is required of communication that is sent to more than 25 retail investors within any 30-calendar-day period?
Pre-use approval by a principal
84
What must be kept by a firm that has some of its RRs working from their primary residence?
A list of all primary residence locations and written procedures for supervising the sales activities of these locations
85
What securities may an Equity Trader (Series 57) sell?
Both equity and convertible debt securities on an agency or principal basis
86
For accounts opened on the premises of a financial institution, what must BDs disclose regarding the products offered?
That the products are not insured by the FDIC and are subject to investment risk (potential loss)
87
What types of OSJ-performed responsibilities create the requirement that an office be supervised by a principal?
Final approval of account opening, review and approval of orders, and final approval of retail communication
88
If a BD, who operates on a bank's premises, terminates an RR who is also a bank employee, the _____ must be notified.
If a BD, who operates on a bank's premises, terminates an RR who is also a bank employee, the bank must be notified.
89
What is the name of a location used occasionally, and always by appointment, to meet with customers?
An office of convenience
90
True or False: A registered person with no disciplinary actions for 15 years is excused from the Regulatory Element.
False. The Regulatory Element of Continuing Education is an ongoing process with no graduation from the plan.
91
True or False: An RR serving in the military may continue to function as a registered person.
False
92
On termination of an RR's employment, when must Form U5 be filed with FINRA and a copy provided to the RR?
Within 30 days
93
True or False: A registered person's Continuing Education requirement is deferred while serving in the military.
True
94
What are the specific limitations to ensuring an office of convenience does not become a branch office?
It may only be used occasionally (always by appointment), and no signage may be used to suggest it is a branch office.
95
Once notified that taping is required, firms have ____ days to start taping and tapes are retained for ______ years.
Once notified that taping is required, firms have 60 days to start taping and tapes are retained for three years.
96
How many people may work from a primary residence without it being considered a branch office?
One person or any immediate family members who also reside at the location
97
Emma is an RR who works primarily from her home. What address must be identified on Emma's business cards?
The address of her branch office
98
From what activity is an Assistant Representative for Order Processing (Series 11) prohibited?
Soliciting new accounts, soliciting transactions, and providing investment advice
99
A registered employee of a BD is required to be ______________.
A registered employee of a BD is required to be fingerprinted.
100
Within a BD, who is required to be fingerprinted?
All partners, directors and officers, as well as any employees who handle funds and/or securities
101
If personnel are hired from disciplined firms, what percentage would require the firm to tape all phone calls?
20%
102
Who must receive a benefit for an investment adviser to have an acceptable soft-dollar arrangement?
The investment adviser's clients
103
Define branch office.
A location where a member firm effects or attempts to effect securities transactions (e.g., solicitations/cold calls)
104
If a producing manager is also the branch office manager, who supervises his activities?
A regional manager who is senior to the producing branch manager
105
True or False: A business continuity plan must address how a firm will communicate with its clients and employees.
True
106
What is the purpose of BrokerCheck?
To allow investors to obtain information about registered individuals in the securities industry
107
True or False: An office established as a back-up, to be used during emergency situations, is a branch office.
False. A temporary office used as part of a BD's contingency plan is not considered a branch office.
108
True or False: Without exception, an RR's primary residence is considered a branch office.
False. A number of exceptions exist allowing RRs to operate from home without it being considered a branch office.
109
True or False: An associated person whose registration is terminated must sign Form U5.
False. The former employer will provide a copy to the individual, but a signature is not required.
110
True or False: Firms failing to adhere to the Taping Rule requirements could be disciplined under the Code of Procedure.
True
111
True or False: A dedicated phone line between an adviser and a BD's analysts is an accepted soft-dollar arrangement.
True. Dedicated phone lines would be acceptable as a means of expediting trades between an IA and a BD.
112
True or False: A Series 6 representative may sell a closed-end fund in the secondary market.
False. Series 6 representatives may participate only in the initial offering of a security (primary market).
113
True or False: A representative currently serving in the military may receive commissions during this period.
True
114
A producing branch manager must be supervised by someone who is _______ to, and ____________ of, that manager.
A producing branch manager must be supervised by someone who is senior to, and independent of, that manager.
115
If an RR leaves a BD and later wants to return without being required to requalify, she must do so within ____ years.
If an RR leaves a BD and later wants to return without being required to requalify, she must do so within two years.
116
True or False: A business continuity plan must address the impact of a disruption on its critical business constituents.
True. A BD's critical business constituents include banks and lenders.
117
In a firm's business continuity plan, how many emergency contacts must be provided?
Two, at least one of whom must be a member of senior management and a registered principal of the member firm
118
A nonregistered, foreign BD provided research to a U.S. institutional client. May commissions be directed to the BD?
No. An agreement/understanding may NOT state that the U.S. client will direct commissions to the foreign BD.
119
Who must be designated by a BD to oversee its supervisory control system and report the results to management?
A supervising principal
120
As a condition of membership, who must be appointed to vote and act on a firm's behalf in all matters concerning FINRA?
An executive representative
121
After completing her Series 7 exam, Kate discloses several of the test questions to her coworker. Is this acceptable?
No. SROs consider the content of their qualification exams confidential.
122
True or False: After termination of registration, an update of any subsequent disciplinary actions must be filed.
True
123
True or False: If an RR works from her primary residence, her supervising branch office must conduct an on-site review.
True
124
If a firm becomes subject to the Taping Rule, what may it do to avoid the taping requirement?
Terminate enough of the new hires to fall under the threshold
125
How often must fee-based accounts be reviewed for suitability purposes?
At least annually
126
An individual may be out of the securities industry for up to _____ years before having to requalify.
An individual may be out of the securities industry for up to two years before having to requalify.
127
An RR leaves his firm to join the military. After being discharged, his special inactive status continues for ____ days.
An RR leaves his firm to join the military. After being discharged, his special inactive status continues for 90 days.
128
What is required for a foreign associated person to be able to visit a client located in the U.S.?
He must be accompanied by an appropriately registered U.S. person.
129
True or False: A BD's business continuity plan includes the home addresses and names of key employees.
False
130
What's required if a producing branch manager's sales activities involve error correction or change of client's address?
Independent supervision by someone senior to the producing manager
131
What is the purpose and responsibility of an OSJ?
To supervise RRs and associated persons under written procedures, review trades effected by RRs, and approve accounts
132
After resignation of registration, how long does FINRA's jurisdiction last?
Two years
133
True or False: A misdemeanor conviction within the last 10 years is grounds for statutory disqualification.
False. A misdemeanor conviction will only result in statutory disqualification if it involved funds or securities.
134
True or False: Provided the U.S. client is an institution, an associated person of a foreign BD may visit it alone.
False. To visit a U.S. client, an associate of a foreign BD must be accompanied by a registered person of a U.S. BD.
135
What two types of securities registrations would allow an individual to offer variable annuities?
Series 6 or Series 7
136
To participate in a tender offer, what is considered equivalent to the stock?
Convertible securities, rights, or warrants of the issuer. Conversion/exercise is NOT required unless accepted.
137
As it is used in the Taping Rule, define disciplined firm.
A firm that has had its registration revoked or has been expelled by an SRO
138
What is the continuing education (CE) requirement of an RR who is currently serving in the military?
His registration is in Special Inactive Status and the CE requirement is halted.
139
Within ____ days of notification that it is subject to the Taping Rule, a firm may reduce its staff to avoid the rule.
Within 30 days of notification that it is subject to the Taping Rule, a firm may reduce its staff to avoid the rule.
140
True or False: A General Securities Principal may approve an option account.
False. The approval must be provided by an ROP.
141
How often must all registered personnel participate in a compliance meeting?
Annually
142
A firm that reduces its staff to prevent from having to tape its calls must wait _____ days before rehiring those RRs.
A firm that reduces its staff to prevent from having to tape its calls must wait 180 days before rehiring those RRs.
143
When must RRs complete the Regulatory Element of Continuing Education?
On the 2-year anniversary of their registration and every 3 years thereafter.
144
Where may Firm Element training occur?
On the BD's premises, at a third-party vendor, or in a virtual, electronic classroom
145
True or False: A non-OSJ branch office may be supervised by either a registered representative or a principal.
True. Firms may use a principal or designate one of the RRs to be in charge.
146
A nonregistered, foreign BD provided research to a U.S. institutional client. May the firm initiate a follow-up contact?
No. It may not initiate a follow-up, nor may it induce the purchase or sale of any security.
147
True or False: If a successful candidate discloses test information to a coworker who fails, no violation has occurred.
False. Both candidates may be disciplined for failing to maintain the confidentiality of the qualifying examination.
148
If a registered person joins the military, what is her registration status?
She falls under the special inactive status designation.
149
True or False: A Series 6 representative may only engage in primary market offerings.
True
150
What training would NOT be applicable for a BD's Firm Element program?
Sales training
151
What are the justifiable reasons for denying an individual's registration?
Conviction for any felony or securities-related misdemeanor within the last 10 years
152
A branch office must be inspected every ____________.
A branch office must be inspected every three years.
153
Jim left the securities industry more than two years ago. Why may he be able to rejoin without requalification?
Jim may have been serving in the military
154
What type of principal may supervise a representative who has Series 6 registration?
A principal with Series 24 or 26 registration
155
A BD is managed by a Series 24 principal and a Series 26 principal. Who approves discretionary secondary-market trades?
The General Securities Principal (Series 24) is the appropriately registered person to approve the trades.
156
What must be included in the records maintained regarding a BD's Firm Element plan?
The plan's content as well as the covered participants
157
When a BD operates on a bank's premises, what happens if a BD employee (also a bank employee) is terminated for cause?
The bank must be notified.
158
What is the CRD system?
A system that pools information concerning the employment and disciplinary histories of registered persons
159
What is an office that offers financial planning services and executes a few securities transactions per year?
A non-securities business office or non-branch office
160
What is an office considered if its RRs make cold calls to prospective clients to solicit new accounts?
A branch office
161
Within a BD, who handles accounts as an RR and also has supervisory responsibilities?
A producing branch manager
162
True or False: Only the person who discloses specific items found on his exam is subject to disciplinary action.
False. The person who discloses the information, as well as the person who receives the information, may be disciplined.
163
True or False: Only registered personnel are required to be fingerprinted.
False. Any individuals handling funds or securities are required to be fingerprinted.
164
Hank, an RR, was charged with misdemeanor DUI last week. Is this reported to FINRA?
No. Since the charge is a misdemeanor, SRO notification is not required.
165
For what reasons may a BD be disqualified from SEC registration?
If within the last 10 years any officer or director has been convicted of a felony or securities-related misdemeanor
166
True or False: Both Series 6 and Series 7 representatives may sell closed-end funds in the secondary market.
False. Only Series 7 representatives may engage in secondary market trading.
167
If an RR works from home, what are the rules regarding her entry of orders and communications with clients?
Orders and electronic communications must be entered/sent through a system reviewable by her branch.
168
What two choices does a firm have once it is notified that it has met the threshold established under the Taping Rule?
Begin taping within 60 days or reduce its staff level below the threshold within 30 days
169
True or False: When a BD operates on a bank's premises, BD employees are required to wear identifying badges.
False. However, specific signage is required to display the BD's name.
170
As stated in a BD's supervisory program, with whom must the CEO annually conduct a meeting?
The BD's Chief Compliance Officer (CCO)
171
True or False: All registered personnel of a BD must complete the Regulatory Element of Continuing Education.
True
172
What does a member firm's supervisory program ensure?
Compliance with SRO rules and federal regulations
173
When granting registration, FINRA considers a person's __________, _________, and _________, but not education history.
When granting registration, FINRA considers a person's experience, knowledge, and training, but not education history.
174
Todd is a Series 7 registered representative. May he offer wrap accounts to his high net worth clients?
No. To offer wrap accounts, Todd would also need a Series 65 or 66 registration.
175
True or False: A firm's annual compliance meeting would discuss product knowledge.
False. Meetings focus on regulation and compliance (e.g., Internet communication or front-running on research reports).
176
To not be a branch office, a location may not be used for securities business more than ____ business days per year.
To not be a branch office, a location may not be used for securities business more than 30 business days per year.
177
What is included in the annual report created by the principal responsible for the firm's supervisory control system?
Details of any tests conducted to gauge effectiveness and any changes made as a result of the tests
178
If a BD operates on a bank's premises, who must have access to the bank's premises to inspect the BD's records?
The SEC, FINRA, and the BD's supervisory personnel
179
What information is included on Form U5?
The applicable details regarding an individual's termination (e.g., whether voluntary or involuntary)
180
Relating to the potential statutory disqualification of an individual, what actions must be reported to FINRA?
Any disciplinary action, indictment, arrest, guilty plea, or conviction must be reported on Form U4.
181
Firms subject to the Taping Rule must commence taping phone calls within _____ days.
Firms subject to the Taping Rule must commence taping phone calls within 60 days.
182
True or False: Firms subject to the Taping Rule only need to tape the phone calls of RRs hired from disciplined firms.
False. BDs subject to the Taping Rule must tape the conversations all RRs have with existing and potential clients.
183
Hank, an RR, was arrested and charged with grand theft (a felony). Is this reported to FINRA?
Yes. Since the charge involves a felony, SRO notification is required.
184
Is a BD reimbursing the travel expenses to an investment seminar acceptable under a soft-dollar arrangement?
No. Reimbursement for travel expenses would not, but covering the cost of the seminar would be acceptable.
185
True or False: An RR may handle his client's funds and securities from his primary residence.
False
186
A representative works from and meets clients at his home. What is the RR's residence considered?
A branch office
187
What type of principal may supervise a representative who has Series 7 registration?
A principal with Series 24 registration
188
For brokerage accounts opened on a bank's premises, what client disclosures must be made verbally and in writing?
The securities offered are not insured by the FDIC, are not bank obligations, and are subject to investment risk.
189
Once appointed as a principal, a candidate has ____ days to qualify for the position.
Once appointed as a principal, a candidate has 90 days to qualify for the position.
190
True or False: A member firm is not required to disclose its business continuity plan to its customers.
False. Member firms must present the plan when the account is opened and thereafter upon request of a client.
191
An office where fewer than ____ securities transactions are effected annually is a non-branch location.
An office where fewer than 25 securities transactions are effected annually is a non-branch location.
192
True or False: FINRA notification is NOT required if an associated person is disciplined by another SRO.
False. FINRA must be promptly notified of such disciplinary action.
193
To determine whether a branch is an OSJ, is the number of registered persons conducting securities business considered?
Yes. If a large number of people are involved in securities activities, regulators may require an OSJ designation.
194
If a BD operates on a bank's premises, what must exist between the BD and bank?
A written agreement identifying the compensation agreement between the two firms
195
Give some examples of situations involving associated persons that require prompt notification to FINRA.
Changing primary address, loss of securities license, termination, felony conviction, internal fines exceeding $2,500
196
How can a client access information maintained on the Central Registration Depository (CRD)?
Either through a toll-free number or through FINRA's Web site.
197
On what form does an employing BD report disciplinary actions?
Form U4
198
Jim was convicted of insider trading and served a three-year prison term. May he now reenter the securities industry?
No. Statutory disqualification bars a person from the securities industry for 10 years from the date of the conviction.
199
True or False: RRs currently serving in the military can receive a CE waiver.
True
200
What types of transactions may a Series 79 Investment Banking Representative advise on or facilitate?
Public or private equity or debt offerings, M&As, tender offers, asset sales, or business combination transactions
201
True or False: A BD managing a discretionary account is considered to be acting as an investment adviser (IA).
True
202
True or False: A member firm's written supervisory program requires that all RRs be supervised by a principal.
True
203
True or False: A general securities principal is responsible for financial reporting.
False, a Financial and Operations Principal performs that function.
204
A non-branch office must be reviewed on a ________ cycle.
A non-branch office must be reviewed on a periodic cycle.
205
What type of registration designation is required to manage an OSJ?
A principal designation
206
Describe the concept of a soft-dollar arrangement.
A situation whereby an IA receives research or other beneficial services from a BD in exchange for order flow
207
Firm Element continuing education is subject to ______________ to show completion, but not ________ with FINRA.
Firm Element continuing education is subject to recordkeeping to show completion, but not filing with FINRA.
208
An investment adviser with more than $110 million under management must register with _________.
An investment adviser with more than $110 million under management must register with the SEC.
209
Any trades effected by representatives must be approved _________ by a principal.
Any trades effected by representatives must be approved promptly by a principal.
