Flashcards in STC Cards Deck (446)
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1
Does SIPC protect separate customers or separate accounts?
Separate customers. A customer with both a cash and margin account with a BD would be covered once.
2
True or False: Jim's joint account with his wife is considered a separate customer by SIPC.
True. E.g. Jim's cash and margin account are combined for coverage, but Jim's joint account with his spouse is separate.
3
If a BD goes bankrupt, what happens to securities registered in the customer’s name?
They are returned to the customer without regard to SIPC limitations.
4
The Securities Act of 1933 regulates _____________.
The Securities Act of 1933 regulates new issues.
5
What is the primary purpose of the Securities Act of 1933?
Provide investors with full and fair disclosure regarding new issues (prospectus)
6
True or False: The SEC judges an offering’s investment merit and provides approval.
FALSE
7
List the securities that are exempt from registration.
Government/municipal bonds, commercial paper, bankers' acceptances, bank issues, non-profit and small business issues
8
Though some securities are exempt from registration, nothing is exempt from the ____________ provisions of the Act.
Though some securities are exempt from registration, nothing is exempt from the anti-fraud provisions of the Act.
9
What are the justifiable reasons for denying an individual's registration?
Conviction for any felony or securities-related misdemeanor within the last 10 years
10
True or False: An American Depositary Receipt (ADR) is a security.
TRUE
11
Is an option on a commodity futures contract a security?
Yes. The futures contract is not, but the option is a security. Options could be based on an equity, index, or currency.
12
Would an interest in a real estate condominium development be considered a security?
Yes
13
True or False: Precious metals are not considered securities.
TRUE
14
Is a voting trust certificate a security?
Yes
15
Is a Keogh plan considered a security?
No, but Keogh plan participation is considered a security.
16
Is an investment interest in livestock considered a security?
Yes
17
Is a certificate of interest in a mining lease a security?
Yes
18
Is a fixed annuity a security?
No, but variable contracts (e.g., variable annuities or variable life insurance) are considered securities.
19
Is an endowment life insurance policy a security?
No
20
Is a variable life insurance policy a security?
Yes, but a term or universal life insurance policy is not considered a security.
21
Is a universal life insurance policy considered a security?
No
22
Is Keogh plan participation considered a security?
Yes, but the Keogh plan itself is not a security.
23
Is a 401(k) plan considered a security?
No
24
Is treasury stock considered a security?
Yes. Treasury stock is stock that was issued and subsequently repurchased by the company.
25
Is a debenture considered a security?
Yes. A debenture is an unsecured corporate bond.
26
Is a preemptive right considered a security?
Yes
27
Is a warrant a security?
Yes. Warrants are financial instruments that allow investors to acquire stock at a preset price.
28
Is a preorganization certificate considered a security?
Yes
29
Is an IRA account considered a security?
No
30
