Series 24 -- Trading and Market Making

Question 1

NYSE REG – before orders are crossed, must be offered to crowd at ____ above the current bid.

Answer 1

1 cent

Question 2

NYSE Rule 127 defines a block of stock as at least ___ shares or $____ or more

Answer 2

10,000 shares, $200,000.00

Question 3

NYSE Market on close (MOC) orders, unless there is an imbalance, cannot be entered after ___:_____

Answer 3

3:45PM

Question 4

Delisting requires approval of Board of Directors and form ___ filing with ___.

Answer 4

Form 25, SEC

Question 5

A security is considered delisted ___ days after filing.

Answer 5

10 Days

Question 6

OTC EQUITY – an OTC equity security is generally considered to be any equity security that is not ____ stock traded on a ________

Answer 6

NMS, National Securities Exchange

Question 7

NASDAQ listings are _______ and ________equivalent securities.

Answer 7

equity and equity equivalent securities

Question 8

NASDAQ min bid price of ____ per share Global Select Market listing.

Answer 8

$4

Question 9

NASDAQ listing ____ round lot shareholders.

Answer 9

400

Question 10

NASDAQ MM Registration - Application ___ upon approval

Answer 10

effective

Question 11

NASDAQ MM Registration – Must enter quotes within ___ business days

Answer 11

5

Question 12

NASDAQ MM Registration – Excused withdrawl for cause, requires ___ Approval

Answer 12

NASDAQ

Question 13

NASDAQ MM Registration – Voluntary termination for NASDAQ and ADF market makers requires ____ day wait before re-registration.

Answer 13

20 business day

Question 14

VWAP – considers ____ of shares traded at each ___ level to determine average

Answer 14

number of shares, price level

Question 15

VWAP computed by ___ divided by the number of shares traded

Answer 15

total dollar value traded

Question 16

SHORT INTEREST REPORTING – reported ___ monthly for short positions in both ___ and ___ accounts

Answer 16

twice, customer and proprietary

Question 17

SHORT INTEREST REPORTING reported on the ___ and the ___ day of the month

Answer 17

15th and last business day

Question 18

SHORT INTEREST REPORTING reported on trades that have ____ as of the reporting dates.

Answer 18

settled

Question 19

OATS – time sequence trail of orders from ___ to ___

Answer 19

entry to execution

Question 20

OATS applies to ___ and ___ equity securities

Answer 20

NASDAQ and OTC

Question 21

OATS Daily reports on an ___

Answer 21

order by order basis

Question 22

Trading Halts – NASDAQ indicators are T1 for _____, T2 for _____ and T3 for ____ window when quotes can be entered and trading can begin.

Answer 22

T1 = news pending
T2 = News Released
T3 5 minute window

Question 23

LULD mechanism is intended to prevent trades in _____ securities from occurring outside of specified _____.

Answer 23

NMS, Price bands

Question 24

ECN: Registered ___ that provides trading platform for extended hours trading.

Answer 24

ATS

Question 25

Markup Policy (5% policy) prospectus offerings

Answer 25

Prospectus offerings exempt

Question 26

Markup Policy (5% policy) -- Calculated from inside market price for ____ competitive markets.

Answer 26

active

Question 27

Markup Policy (5% policy) -- Applies to corporate and _____ debt

Answer 27

US Government

Question 28

Regulation NMS rule 611 prohibits trade throughs that occur when a firm executes a customer order at a price when a _____ is available in another market.

Answer 28

better price

Question 29

Regulation NMS rule 612 deals with minimum increments with regard to pricing. For stocks priced at ___ per share or greater, the min increment is ___.

Answer 29

$1.00/ one cent

Question 30

Regulation NMS rule 612 ___ pricing is permitted for stocks trading below $1.00

Answer 30

sub-penny

Question 31

Regulation NMS rule 605 requires market centers that trade listed and ______ securities to prepare _____ reports on execution quality.

Answer 31

NASDAQ, Monthly

Question 32

Regulation NMS rule 606 requires firms to disclose, in ____ reports, their routing methods that identify the market centers to which they route a significant percent of their _____ orders and any _____ for orderflow arrangements that exist.

Answer 32

quarterly, non-directed orders, payment

Question 33

LIMIT ORDER PROTECTION RULES -- Manning Rule says firms cannot ______ of customer limit orders.

Answer 33

trade ahead.

Question 34

LIMIT ORDER PROTECTION RULES -- If a market maker receives, as _____, a better price than unexecuted customer limit order, _____ must be passed along to the customer

Answer 34

principal, price improvement

Question 35

LIMIT ORDER PROTECTION RULES SEC Rule 604 -- the display rule requires a ______ to display a customer order priced ______ than its current quote within _____ seconds of receipt.

Answer 35

market maker, better, 30 seconds

Question 36

OTC Market Regulation -- Cannot trade ahead of block orders at that is _____.

Answer 36

front running

Question 37

OTC Market Regulation -- Cannot adjust inventory in advance of non-public knowledge of issuance of research report: applies to ________

Answer 37

any security -- no trading ahead of research reports.

Question 38

OTC Market Regulation -- Interpositioning prohibited unless it results in better _____ for the customer

Answer 38

execution

Question 39

REGULATION SHO -- mandates a short locate requirement prior to ______ of any security.

Answer 39

short sale

Question 40

REGULATION SHO -- requires close out of fails to deliver in threshold securities after ___ consecutive settlement days (FINRA Rule ___)

Answer 40

13, 4320