Flashcards in STC Cards Deck (446)
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.
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.
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.
The Securities Act of 1933 regulates _____________.
The Securities Act of 1933 regulates new issues.
What is the primary purpose of the Securities Act of 1933?
Provide investors with full and fair disclosure regarding new issues (prospectus)
True or False: The SEC judges an offering’s investment merit and provides approval.
List the securities that are exempt from registration.
Government/municipal bonds, commercial paper, bankers' acceptances, bank issues, non-profit and small business issues
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.
What are the justifiable reasons for denying an individual's registration?
Conviction for any felony or securities-related misdemeanor within the last 10 years
True or False: An American Depositary Receipt (ADR) is a security.
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.
Would an interest in a real estate condominium development be considered a security?
True or False: Precious metals are not considered securities.
Is a voting trust certificate a security?
Is a Keogh plan considered a security?
No, but Keogh plan participation is considered a security.
Is an investment interest in livestock considered a security?
Is a certificate of interest in a mining lease a security?
Is a fixed annuity a security?
No, but variable contracts (e.g., variable annuities or variable life insurance) are considered securities.
Is an endowment life insurance policy a security?
Is a variable life insurance policy a security?
Yes, but a term or universal life insurance policy is not considered a security.
Is a universal life insurance policy considered a security?
Is Keogh plan participation considered a security?
Yes, but the Keogh plan itself is not a security.
Is a 401(k) plan considered a security?
Is treasury stock considered a security?
Yes. Treasury stock is stock that was issued and subsequently repurchased by the company.
Is a debenture considered a security?
Yes. A debenture is an unsecured corporate bond.
Is a preemptive right considered a security?
Is a warrant a security?
Yes. Warrants are financial instruments that allow investors to acquire stock at a preset price.
Is a preorganization certificate considered a security?
Is an IRA account considered a security?