Regulatory Entities, Agencies and Market Participants Quiz

Question 1

If a CPA also provides investment advice to his clients for a fee the CPA is considered an?

Answer 1

Investment adviser

Question 2

Who obtains the CUSIP for a municipal bond issue?

Answer 2

The underwriter

Question 3

All of the following are considered self regulatory organizations for the regulation of securities offerings and trading?

Answer 3

FINRA, MSRB, CBOE

Question 4

The function of the Department of the Treasury?

Answer 4

Oversee the US economic and financial systems

Question 5

If a customer purchases securities and does not settle the account in 4 business days the brokerage firms first order of business is to?

Answer 5

Cancel the trade and sell off the purchased securities

Question 6

The current margin requirement under Regulation T of the Act of 1934 is

Answer 6

50%

Question 7

In the sale of a new issue of municipal securities MSRB disclosure requirements specify that a customer must be provided with a copy of the

Answer 7

Official statement

Question 8

When an entity makes a market in a particular security it is deemed to be acting as

Answer 8

A principal

Question 9

Which code under FINRA by laws would relate to trade practice violations and enforcement?

Answer 9

The code of procedure

Question 10

Who enforces MSRB rules on NYSE member firms?

Answer 10

FINRA

Question 11

If a member resigns from an SRO when will the registration take effect?

Answer 11

30 days after receipt of formal registration by the SRO

Question 12

Under regulation T if a customers account is frozen for 90 days the customer

Answer 12

May make purchases if the full purchase is in the account before the order is transacted

Question 13

A customer who failed to complete payment in 4 business days applied for an extension but was denied. What action should be taken?

Answer 13

Close out the transaction

Question 14

Government securities regular settlement is

Answer 14

Next day

Question 15

Which of the following best fits the definition of an investment advisor?

Answer 15

Publisher of reports on securities

Question 16

A legal entity that offers securities to investors?

Answer 16

An issuer

Question 17

Under regulation T the 90 day restriction applies to a customer who purchases and subsequently sells

Answer 17

Same stock in a cash account without having first fully paid for the purchase

Question 18

A customer has not paid for a stock transaction in 4 business days and has been refused an extension the member firm

Answer 18

Must cancel or liquidate the order by immediately selling the securities

Question 19

Regulation T of the federal reserve board involved all of the following security transactions

Answer 19

Corporate securities
ADRs
Rights & Warrants

Question 20

The MSRBs anti money laundering rules require that a municipal broker dealers procedures contain.?

Answer 20

An employee training program

A designated independent party to test the procedures

Question 21

When broker dealers effect trades for the account of other that are acting capacity?

Answer 21

Agency

Question 22

Your client has not paid for a stock purchase on the allotted time period. According to Regulation T this account will be frozen for

Answer 22

90 days

Question 23

A municipal broker / dealer renters a big. This is a

Answer 23

Nonbinding request for a likely bid

Question 24

An investor can be granted an extension of time by

Answer 24

FINRA and the transacting exchange

Question 25

A natural person must be considered an accredited investor if in each of the past 2 years his or her income exceeded

Answer 25

$200,000

Question 26

MSRB rules do not permit

Answer 26

Nominal quotes distributed as bids | Nominal quotes distributed as offers

Question 27

The federal act that established procedures for the protection of customer funds and securities in the event that a broker dealer becomes insolvent is called

Answer 27

The securities investor protection act of 1970

Question 28

Broker dealers effect transactions of securities for

Answer 28

For both their own account and the account of others

Question 29

If a customer purchasing securities on margin does not pay for the securities in the required time period the account is frozen and no credit may be extended to them for

Answer 29

90 days

Question 30

According to MSRB rules if a control relationship exists between an issuer and a municipal securities dealer the nature of that relationship must be disclosed under which of the following circumstances

Answer 30

When the transaction involves the sale of a new issue When the transaction occurs on the secondary market When the broker dealer is acting as agent When the broker dealer is acting as principal

Question 31

Which of the following would meet the MSRBs definition of a customer?

Answer 31

A bank trust officer purchasing for a trust account An investment advisor handling account for his clients An issue buying a security in the secondary market

Question 32

When a brokerage firm is acting as a dealer it is acting in the capacity of an

Answer 32

Principal

Question 33

Special procedures must be followed by a municipal bond dealers when opening an account for which of the following?

Answer 33

Principal of another firm

Question 34

Under MSRB rules a broker dealers municipal activity must be supervised by

Answer 34

A municipal securities principal

Question 35

Which of the following describes a market maker?

Answer 35

A broker dealer that assumed the risk of holding an inventory of shares of stock in order to facilitate the trading of that security

Question 36

A customer who purchases securities in a cash or margin account must pay for the securities in

Answer 36

4 business days

Question 37

According to MSRB rules under which of the following conditions may a municipal dealer share in the loses of a customers account?

Answer 37

Under no circumstances

Question 38

Where do municipal trade

Answer 38

OTC

Question 39

FINRA s main functions include all of the following

Answer 39

Monitoring compliance with rules of ethical practice Writing rules enforcing broker /dealer behavior Governing broker /dealer and registered representative trading activity

Question 40

An investor an be granted an extension of time by

Answer 40

FINRA and the transacting exchange

Question 41

A members blanket fidelity bond provides insurance against

Answer 41

Lost stock certificates Employee theft of stock certificates A registered representative embezzling cash from a customers account