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Flashcards in S6 Regulatory Fundamentals Deck (55)
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1

Fingerprint Records

Fingerprint records must be kept for at least 3 years after termination of employment

PG 1

2

Accredited Investor

-Individual NW: 1 million or more

-Institutional: banks, ins companies, large pension plans

-Trusts or tax exempt organizations: 5M or more

3

SEC Reg D

Private Placements

-Exempt from SEC registration

-Can be sold to unlimited Accredited Investors

-No more than 35 non-accredited investors

***PROHIBITS ANY ADVERTISING***

4

Under regulation D there are no limits regarding the number of accredited investors there can be no more then ________ non accredited investors

35

5

SIPC

-covers insolvency by a B/D

-covers up to 500,000 per separate customer of which 250,000 maybe cash

6

SIPC does NOT cover _____?

Mutual Funds Accounts

*Mutual fund SHARES that are held in a brokerage acct ARE covered

7

SIPC

Members shall provide all customers with the same information, in writing at least _____

Annually

8

Continuing Education
-Firm Element-

Annual basis

9

Fingerprints

FINRA requires separate registration and fingerprinting of firm principlals and their registered representatives

10

Continuing Education
-Regulatory Element-

Within 120 days of your 2nd registration anniversary date & every 3 years thereafter

11

Customer Account Information

- customers name & residence address

-whether customer is of legal age

-names of the associated persons if any responsible for the account and if multiple individuals are assigned responsibility for the account, a record indicating the scope of their responsibilities with respect to the account

-signature of the partner, officer or manager denoting that the account has been accepted in accordance with the members policies and procedures for acceptance of accounts

REP SIGNATURE NOT NEEDED
SIGNATURE OF MANAGER NEEDED

12

Customer Complaints

- firms are required to report statistical & summary WRITTEN customer complaint info to FINRA QUARTERLY

-must be provided to FINRA by the 15th day of each month following the calendar quarter in which the complaints were received by the member

13

Member firms shall preserve a record of any customer account information that is subsequently updates for at least _______ years after the date that such information is updated

6

14

Customer Complaints

-FINRA Rules require a customer complaints, as well as the action taken, to be kept for _____ years by the member firm

4

15

Customer Complaints
- member firms must notify FINRA when they receive a customer complaint alleging THEFT or MISAPPROPRIATION of funds or securities _______

Promptly (30 calendar days)

16

Armed Forces

1. Inactive status
2. Does NOT need to be re-registered
3. Eligible to receive commission
4. Do NOT need to pay dues or assessments or a "reactive" fee

17

Any person who's registration as a representative or principal has been terminated for a period of ______ years or more should be required to pass a qualification exam for representatives appropriate to a category of Registration required by law

2

18

Do you register a broker-dealer form _____ is filed

BD

19

To terminate the registration of an associate a person, form ____ is filed

U5

20

To register as an associate a person, form ____ is filed

U4

21

To terminate the registration of a broker-dealer, form _____ is filed

BDW

22

Felony on U4

Past 10 yrs (regardless if dropped)

23

Misdemeanors on U4

Past 10 yrs ONLY if related to securities, money, or dishonesty must be disclosed

24

Application for Registration (Form U4, Form BD, Form ADV)

(Every application for registration filed with the corp shall be kept current at all times by amendments files electronically. Such amendment to the app must be filed not later than _______ after learning of the facts)

- 30 days

PG 3

25

Voluntary Termination


-Form U5 must be amended with the persons name and/or address changes for an additional _____ after initial filing

2

26

Statutory Disqualification

(The SEC can delay or deny the application of a B/D if the application is intentionally incorrect or if any person associated with the B/D has _______)

(Means you cannot be affiliated with their broker-dealer in any capacity)

1. Has been convicted within 10 yrs of ANY securities related crime

2. Has willfully violated the provisions of any Federal securities act

3. Has been expelled or suspended
from any SRO

PG 2

27

Broker Check

FINRA maintains a system entitled BrokerCheck that allows the public to access information regarding registered persons, including currently registered persons as well as those individuals who have been associated with the member within the preceding 10 years

- includes the qualification examinations that were passed and the date they were passed

-does not release all information found on an individual form U5, including the reason for termination

28

What's NOT a security?

-Keogh
-IRA
-Common features
-Fixes annuities
-insurance (unless variable)

29

Exempt Securities

1. Govt
2. Muni Securities
3. Religious
4. Pension
5. Public Utilities
6. Insurance (unless variable)
7. Financial (unless bank holding)
8. Commercial paper (280 days/9m)
9. Federal Covered (exchange, NASDAQ)

30

Investment Advisor

Any person who for compensation, engages in the business of advising others, either directly through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who , for compensation and as a part of a regular business, issues or promulgates analysis reports concerning securities