U1 - Key Points Flashcards
Unit 1 Mastery
Your firm purchases and installs fingerprinting equipment from a certified electronic fingerprint submission vendor. Once correctly installed, your firm is required to maintain records of the electronically pressed fingerprints for how long?
3 years after termination of the person’s employment
Every FINRA member firm is obligated to report to the FINRA Contact System (FCS) the person and contact information of the executive representative and assistant (if one), the AML compliance contact and alternate (if one), the emergency contact and secondary (if one), as well as the CE contact within WHAT time frame?
Within 17 business days after the end of each calendar year.
Who must be registered as a Principal?
FINRA rules require that managers of OSJs and officers be registered as principals. There is no requirement that all branch office managers be licensed as principals. Small branches, for example, may have a person-in-charge who is licensed with a Series 7 only
If a registered representative is given additional responsibilities requiring registration with FINRA as a principal, registration must be made within how many days?
90 days.
Which events in a branch would require proper reporting to FINRA?
Allegations of forgery or theft, or a settlement for more than $15,000 involving an individual, would all warrant immediate filing. PROMPT reporting required!
If a new employer request a copy of the Form U-5 from a new employee, he must provided within how many days?
2 business days.
Under FINRA rules, a registered representative must complete the regulatory element of continuing education within how many days of a registration anniversary date?
120.
The regulatory element requires that all registered persons complete a computer-based training session within 120 days of their 2nd registration anniversary and every 3rd anniversary thereafter.
What document needs to be amended in the event that a Associated Person changes their address, has a deficiency in a prior filing or is convicted of a felony?
U-4
Which type of historical information is required on Form U-4?
5-year residency and 10-year employment
When can a Series 6 license be used to sell a closed-end fund?
Only during the primary offering when it is sold by prospectus?
A Series 7 is required to transact closed-end fund shares trading over-the-counter.
A statutorily disqualified person wishes to work for a member firm in a purely clerical capacity. The member may?
Hire this person with the approval of the Department of Member Regulation.
Note: The Department of Member Regulation has the authority to approve a statutorily disqualified person’s application to become or remain associated with a member in a purely clerical capacity. When someone is suspended or barred from the industry, they may not ordinarily work even at clerical functions for any member firm.
The firm element of FINRA’s continuing education requirement must be completed how frequently?
Annually.
When does a principal need to check the character reputation of a registered representative?
Just once, before submitting the Form U4 to the Web CRD.
If a broker-dealer has been found to have violated numerous MSRB rules, who is the fine assessed by and paid to?
FINRA assesses the fine and FINRA is paid the fine.
Note: The MSRB has no enforcement authority. Its rules are enforced by the appropriate DEA, in this case FINRA. The fine would be paid to the designated examining authority, which in this case is FINRA.
When a registered representatives has been called into active overseas military duty what happens?
The representative license we placed on special INACTIVE status. They can continue to receive commissions but may not perform any of the duties normally associated by registered persons.
Furthermore, while the person is on active military duty, all CE requirements are waived.
Are member firms required to fingerprint employees who process customer accounts?
No.
Under SEC Rule 17f-2, persons registered with FINRA, persons involved in handling customer funds or securities (including employees of transfer agents), and persons involved in preparing the firm’s original books and records must be fingerprinted.
FINRA requires member firms to promptly report securities or commodities related judgments, awards or settlements against individuals for what amount?
If settled for more than $15,000.
Note: if it’s against a member firm it must exceed $25,000.
Does a felony charge and conviction that happened over 10 years ago need to be reported?
Yes. These charges no matter how long ago the occurred are reportable.
Whenever a member firm is a branch office it must notify FINRA (in the state) by what timeframe?
Promptly, but no later than 30 days.
A member firm’s FEES are based on what?
The number of registered representatives and the number of branch offices.
What functions can be performed by a general sales supervisor?
Sales related correspondence, customer orders, new accounts.
Note: they cannot approve a research report.
What is the definition of an Associated Person?
An associated person (AP) means a natural person who is registered. That can include a sole proprietor, partner, CEO, CFO, director or branch manager or other natural person occupying a similar status or performing similar functions.
If a securities broker-dealer registered with FINRA wishes to merge with another member, when must FINRA be notified?
At least 30 days prior to closing date.
FINRA must be notified promptly if a registered representative becomes the subject of any disciplinary action taken by a member involving what events?
Under FINRA rules, suspension, termination for cause, the withholding of commissions in excess of $2,500, or the imposition of a fine in excess of $2,500 all require that FINRA be promptly notified (within 30 business days).
