Section 3 of 14 Flashcards
(48 cards)
Penny stock is what dollar amount and is not subject to penny stock disclosures if what?
$5; if unsolicited
Penny stock is listed or unlisted securities?
unlisted (Synovus exmple)
Penny stock disclosures requirements means what?
must be suitable; must sign a suitability statement; must provide a quote
Who is excluded from penny stock rules?
established customer
What constitutes an established customer for penny stocks?
3 transactions in 3 different stocks on 3 different days
when is a b/d exempt from penny stock rule?
if total commission or markups for penny stock does not exceed 5% of total commissions and mark ups
Who else is exempt from penny stock rules?
1) institutional investors; 2) private placements 3) unsolicited transactions 4) transactions with officers or directors or 5% stockholders
Two types of join accounts:
1) Tenants in common 2) Joint with Right of Survivorship
What happens to the assets of the deceased party in TIC?
transfers to the decedants estate
What happens to the assets in a JWROS?
assets transfer to the other party
What is TOD?
Transfer on death where the owner stipulates who the beneficiary is
UGMA
age of majority of the state
UTMA
custodian determines the age of transfer up to a max age of 25
what are principals responsibilities for a discretionary account?
approve and monitor
Wrap account holders must be given what that details the fees prior to opening the account?
Schedule H
If an employee of a FINRA member firm opens an account, what is the requirement?
notify the employer in writing; send duplicate statements only if requested
If an employee of a NYSE member firm opens an account, what is the requirement?
notify the employer in writing; send duplicate statements; get the employers permission to open the account
Who determines what securities are marginable?
FRB
Margin in controlled by FRB under what regulation and what act?
Reg T; Securities Exchange Act of 1934
The payment date for common and preferred stock and corporate and municipal bonds in a margin account is
T + 5
If a customer fails to pay for a purchase within the 5 business days allowed under Reg T in a margin account, the brokerage firm can “sell out” and freeze the account for how many days
90
A request for an extension for pay for a purchase must be requested by when?
before the expiration of the 5th business day.
When a customer opens a margin acount, they will be r three documents. Name them. Which one does not have to be signed?
1) credit agreement
2) hypothecation agreement
3) loan consent agreement does not have to be signed
Which agreement states the terms and conditions under which credit will be extended and include information about how interest is charges and information about the rates that will be charged?
credit agreement
