Must know review Flashcards
(44 cards)
Ex-dividend date is set by ?
In addition to these dates (declaration date, record date, and payable date), there is a fourth date—the ex-dividend date—which is set and published by the market where the security principally trades (e.g., the ex-dividend date is set by the NYSE if the stock is listed, and by FINRA if the stock trades over the counter).
Ex-Date
The ex-date is the date on which the stock begins to trade without (ex) the dividend (if stock is bought on the ex-date, the buyer will not receive the dividend). To receive the dividend, the stock must be bought before the ex-date.
Under Uniform Practice Rules, the ex-dates for cash and stock dividends as well as for related distributions (e.g., stock splits) are as follows:
For regular way trades—one business days prior to record date
For cash settlement trades—one day after the record date
For cash dividends in which the value of the dividend is 25% or more of the market value of the stock, or where the number of shares in a stock dividend or stock split represents a 25% or more increase, the ex-date is
For cash dividends in which the value of the dividend is 25% or more of the market value of the stock, or where the number of shares in a stock dividend or stock split represents a 25% or more increase, the ex-date is one business day after payable date.
Buying on the ex-date in a regular way trade will entitle the buying member to the upcoming dividend as the trade will settle after record date T/F ?
Buying on the ex-date in a regular way trade will not entitle the buying member to the upcoming dividend as the trade will settle after record date.
The basic rule—to receive the dividend, the buyer must purchase the stock before
The basic rule—to receive the dividend, the buyer must purchase the stock before the ex-date
The order of dates is
DERP
The opening quotes for a Nasdaq stock are adjusted downward on the morning of the
The opening quotes for a Nasdaq stock are adjusted downward on the morning of the regular way ex-date to reflect the value of the upcoming cash dividend.
Under SEC rules, customer fails-to-deliver must be bought in after how many business days from settlement date ?
Under SEC rules, customer fails-to-deliver must be bought in after 10 business days from settlement date.
Reference: 4.14.16 in the License Exam Manual
If more than how many dollars in value is paid for the testimonial, the fact that it is a paid testimonial must be disclosed in the communication ?
If more than $100 in value is paid for the testimonial, the fact that it is a paid testimonial must be disclosed in the communication.
Does payment for order flow need to be disclosed on confirmations ?
If applicable, payment for order flow must be disclosed on confirmations. Reference: 3.1.6 in the License Exam Manual
When must a firm submit its proposed sub loan agreement to FINRA ?
The member firm must submit to FINRA its proposed subordinated loan agreement no later than 10 business days before the expected effective date.
Reference: 2.11 in the License Exam Manual
Is whether the member a market maker required on the order ticket or confirm ?
Whether the member is a market maker in the security bought or sold is not required on an order ticket (but it is required on the confirmation).
The standard haircut on actively traded common stock is what percentage ?
The standard haircut on actively traded common stock is 15%.
If stock owned by the firm has a limited trading market, the haircut is ?%.
If stock owned by the firm has a limited trading market, the haircut is 40%.
True/False - All non exempt securities must be registered with the SEC prior to public sale ?
All non exempt securities must be registered with the SEC prior to public sale.
Reference: 5.1.1 in the License Exam Manual
How long must customer account records be kept ?
Customer account records (such as the new account form) are 6-year records. The six years toll from when the account is closed.
Reference: 2.15.1.2 in the License Exam Manual
FINRA RULE 3130
Member firms, under FINRA Rule 3130, are required to designate and notify FINRA on Form BD a principal to serve as chief compliance officer (CCO) and to have the chief execu
tive officer (CEO) certify annually that the member firm has in place processes to establish,
maintain, review, test, and modify its supervisory procedures. The CEO also must conduct
one or more meetings with the CCO during the 12 months preceding certification and submit
a report to the firm’s board of directors (BOD) and audit committee within 45 days of the
certification.
Switching
Selling shares of one mutual fund to buy shares of another is known as switching and is a supervisory concern. Although the customer may have legitimate reasons for making the exchange, she may incur additional sales charges and tax liabilities.
Reference: 2.22.12.9 in the License Exam Manual
T1 Halt
News pending : Trading is halted pending the release of material news
Form 3
A legal document used by officers, directors, and principal stockholders of more than 10% of a corporation to file an initial statement of beneficial ownership of equity securities. The form is filed with the SEC.
An insider of an issuer that is registering equity securities for the first time under Section 12 of the Exchange Act must file this Form no later than the effective date of the registration statement.
Form 4
A legal document used to update Form 3 when there are changes in the beneficial ownership of a corporation. Filed within two business days of any change.
Form 8K
A legal document used to report events of consequence that occur in a corporation; such events include changes in control of the corporation or in its name, address, financial standing, board of directors, or auditors. Syn . “current report”
