Wrong Answers Flashcards
(116 cards)
1
Q
For a supervising principal of a member firm, which persons are subject to industry rules regulating the opening of an account at another member firm?
A
The principal’s spouse and minor children
2
Q
When an issuer buys back equity securities in the open market, what does Rule 10b-18 provide?
A
A safe harbor from liability for manipulation as long as the issuer satisfies all conditions, EXCEPT when it uses only one broker-dealer to effect purchases in a given day including the after hours session.
3
Q
Which statements are TRUE regarding settlement dates on when, as, and if issued securities?
A
Delivery is normally required on the date determined by the National Uniform Practice Committee.
If no delivery date is specified by the National Uniform Practice Committee, delivery may be made by the seller on one day’s written notice to the buyer.
On securities being issued through a syndicate or selling group, settlement is on the date the syndicate or selling group contracts are settled.
4
Q
A broker-dealer with a net capital exceeding $12,000,000 must have a minimum fidelity bond coverage of:
A
$5,000,000
For member firms whose net capital exceeds $250,000, FINRA has a table of required coverage, with a maximum of $5,000,000 for member firms whose net capital requirement exceeds $12,000,000.
5
Q
For each security in which an ADF Trading Center displays a quote, what must it provide
A
Other ADF market participants’ direct electronic access
Broker-dealers that are not ADF participants will allow direct access to their quotes for a fee
Capital in the event that an ADF quoting participant is not able to execute at the inside market
6
Q
Regarding FINRA’s suitability obligations, which statements are TRUE concerning institutional suitability?
A
Institutional investors must affirmatively state that they’re exercising independent judgment in evaluating the recommendations.
Institutional investors are not subject to the same suitability requirements as retail investors.
Institutional investors are subject only to the reasonable-basis obligation and the quantitative obligation.
7
Q
A client would need to receive a risk disclosure document if the member firm is promoting which activity?
A
The ability to profit by trading like a professional trader.
8
Q
Under Regulation M, what are the minimum standards for a stock to be classified as actively traded?
A
ADTV of at least $1 million and public float of at least $150 million.
9
Q
Which entity is considered an eligible purchaser for a Rule 147 offering?
A
A corporation that has its principal office located in the state of the offering.
10
Q
What is the first day a syndicate member participating in an IPO with an effective date of June 3rd may publish research on the company?
A
June 14th.
11
Q
When must a broker-dealer closeout a fail to deliver in a threshold security?
A
The morning of the 14th settlement day.
12
Q
A REIT will receive preferential tax treatment if it distributes at least what percentage of its income to shareholders?
A
90%.
13
Q
A master limited partnership (MLP) has which characteristics?
A
the interests in the partnership must be traded on an established exchange (e.g., the NYSE or Nasdaq) or readily tradable in the secondary market
at least 90% of its gross income must be derived from qualified income, such as investments in real property, mineral or natural resources, commodities, interest, and dividends.
14
Q
In which account is a person permitted to sell shares of stock when the research analyst has a buy recommendation on that stock?
A
An account of a roommate of the research analyst.
15
Q
What type of margin model does a client have if the margin requirement on a transaction is based on a formula that does not consider other offsetting positions?
A
A strategy-based margin model.
Strategy-based margin is an approach that uses a specific formula for a particular strategy and does not consider any other offsetting positions or potential changes in asset prices. T
16
Q
A Nasdaq market maker’s registration will be terminated if it:
A
Fails to enter a quote within five business days after the market maker’s registration becomes effective.
17
Q
What should happen if a client of a member firm writes a letter to a branch manager detailing unsuitable recommendations?
A
The salesperson’s trading activity should be examined pending an investigation.
A member firm is required to submit reports periodically to an SRO with respect to customer complaints it receives. There is no requirement to suspend the activities of a registered representative under these circumstances, and there is no requirement to send a copy of the letter to the SEC. However, all complaints should be investigated.
18
Q
Under industry rules, who is permitted to supervise a branch office manager (BOM) that transacts business with customers?
A
A regional manager.
19
Q
An anti-money laundering compliance program of a broker-dealer is required to include each of the following,
A
Stress testing
Independent audits
Protocols for employee training
According to FINRA, all member broker-dealers must have an AML compliance program that includes policies and procedures reasonably designed to detect money laundering and to report suspicious transactions. The requirements include the designation of a compliance officer who is responsible for the program (there is no requirement that this person hold any FINRA designation), an ongoing employee training program, and an independent audit function to test (stress testing) the program’s effectiveness.
20
Q
When an issuer is testing the waters under a Regulation A offering, how many days must there be between the use of a solicitation statement and the first sale of securities?
A
20 days.
21
Q
What information must a broker who transacts an order for a customer send in a confirmation
A
The yield computation employed
If it acted as an agent for the customer and as an agent for another person
If it acted as principal and that it prepares research on the security
22
Q
If a registered representative’s registration was terminated three years ago and she changes her residential address, what is her obligation?
A
She’s not obligated to report this change to FINRA.
23
Q
A stock is quoted on the Nasdaq system by four market makers. If a client of MM#3 enters an order to buy stock at $15.65, what will happen?
A
Automatically execute the order at 15.60.
The inside market in this question is 15.35 - 15.60. All quotations and orders entered into the Nasdaq Market Center Execution System are automatically executable for their displayed and non-displayed size, and any quote or order entered into the system that would lock or cross the market will be executed. Since the client of MM#3 wants to buy the shares at $15.65, and there is a lower offer of 15.60, the order will be automatically executed by the system. The client would receive five cents of price improvement. (11757)
24
Q
Which function is performed through an office of supervisory jurisdiction (OSJ)?
A
include approval of new accounts and transactions
structuring investment banking deals
market making,
maintaining custody of customer funds and securities
and the approving retail communications
25
What must all clearing and carrying agreements between clearing and introducing firms specify, EXCEPT?
Opening and approving customer accounts
Sending out confirmations and statements
Receipt and delivery of funds and securities
26
If an issuer that has previously filed for bankruptcy is planning on raising capital, what is TRUE about the registration statement?
The issuer is not considered an ineligible issuer and is permitted to conduct a best-efforts or firm-commitment underwriting.
27
Would A registered principal who wants to act as a consultant for a private placement of a security that is not being offered by her broker-dealer need written notification to an employer?
Yes
28
After a customer purchases restricted stock in the open public market, what happens to the stock?
Is no longer restricted and is not subject to volume limits under Rule 144.
29
How many days does the person against whom a complaint is filed have to respond after first receiving it?
25 days.
30
What does a Rule 10b5-1 plan allow corporate insiders to do?
Defend themselves against insider trading charges by allowing another person to buy or sell securities based on a previously executed written agreement.
31
Which statement is TRUE regarding an unsponsored ADR?
The issuer doesn't pay for the ADR shares to be issued and they trade OTC in the United States.
32
What is a requirement of an arbitration hearing?
Filing fees are paid by the party that initiates the claim.
33
If an issuer wants to repurchase its shares in the secondary market under Rule 10b-18, what should a broker-dealer advise?
Limit the amount of stock purchased on any single day to no more than 25% of the ADTV for that security.
34
What form does FINRA report a registered representative's lost arbitration decision?
U6.
35
What does the information from Network A in the Consolidated Tape represent?
Trade reports for all stocks that are listed on the NYSE.
36
Which issuer can only use a free-writing prospectus if it's accompanied by a statutory prospectus?
Unseasoned issuer.
37
Which issuer is permitted to use pay-as-you-go registration?
A well-known seasoned issuer.
38
If Broker-Dealer X sends its customer order flow to Market Center A, who has an obligation under the Limit Order Display rule?
Market Center A.
39
What minimum net capital must a broker-dealer that is an executing firm in a prime-brokerage arrangement maintain?
$1,000,000.
40
What must a broker-dealer using the alternative standard of calculating its minimum net capital maintain?
The greater of $250,000 or 2% of its aggregate debit items.
41
If a customer has a margin account with a $600,000 long market value and a $240,000 debit, how much will SIPC cover?
Up to $360,000.
42
According to Regulation FD, when making a purposeful disclosure of non-public information, what is required?
Provide a simultaneous disclosure to the public if the release was directed at all groups, EXCEPT a credit rating agency, provided the ratings will be publicly available.
## Footnote
Rule 100(b)(1) of Regulation FD lists four categories of persons to whom selective disclosure cannot be made if a specified exclusion is absent. These are all entities that may be reasonably expected to trade on the non-public information that has been released.
Rule 100(b)(2) lays out numerous exclusions from coverage, including:
Communications made to a person who owes the issuer a duty of trust or confidence (i.e., a temporary insider, such as an attorney, investment banker, or accountant)
Communications made to any person who expressly agrees to maintain the information in confidence.
Disclosures to an entity whose primary business is the issuance of credit ratings, provided the information is disclosed solely for the purpose of developing a credit rating and the entity's ratings are publicly available
43
Under what conditions is a dealer executing a transaction with a customer in a debt security not required to use its contemporaneous cost as the prevailing market price?
If issuers of similar securities have been actively traded, interest rates changed after the dealer's contemporaneous transaction, the credit quality of the debt security changed significantly, or news was issued that affected the perceived value.
44
If a registered representative wants to contact prospective customers beginning at 8:30 a.m., what is the rule?
This activity would be permitted (8am to 9pm).
45
What is a due bill used for?
If a trade occurs before the ex-dividend date, with delivery made after the record date.
46
If a member of a syndicate (other than the manager) effects a stabilizing bid, what is required?
The firm is required to notify the manager within three business days of any stabilizing transaction.
## Footnote
The syndicate manager typically places a stabilizing bid, or conducts the syndicate's short covering transaction. However, if a syndicate member (other than the manager) effects such a transaction, the firm is required to notify the manager within three business days of effecting the transaction. The manager must maintain these records as part of its recordkeeping responsibilities. (
47
What are the thresholds for market-wide circuit breakers?
A decline of 7% (15 minutes), 13% (15 minutes), and 20%(rest of the day).
## Footnote
Market-wide trading halts are based on the S&P 500 Index and are calculated daily (not monthly). A trading halt on one exchange applies to all exchanges that trade the same security. A Level 1 Market Decline (7%) and a Level 2 Market Decline (13%) will halt trading for 15 minutes. For a Level 3 Market Decline (20%), trading will be halted for the remainder of the day.
48
What BEST describes what makes an investor accredited and able to purchase a Regulation D offering?
Income, net worth, sophistication, and suitability.
49
If a registered representative is opening a customer account over the phone and the prospect lacks proper identity documentation, what ways can the customers identiy be identified
The account may be opened by checking references with other financial institutions.
The account may be opened by comparing identity information with a consumer reporting agency.
The account may be opened using documents other than a driver's license or passport.
50
If promissory notes are being sold by a corporate issuer to institutional investors in a block trade with a maturity of six months, which statement is TRUE?
The promissory notes are most likely not considered securities.
## Footnote
A promissory note is similar to other debt securities. If the maturity exceeds 270 days (nine months), the SEC typically considers the note to be a security. When promissory notes are defined as securities, they're either subject to or exempt from SEC registration. For example, promissory notes sold in a private placement are exempt from registration. (20055)
51
Who would BEST be able to supervise a senior executive employed in the firm's institutional fixed-income trading department if she also executes transactions?
A principal who determines the compensation of the senior executive.
52
When do shares of a leveraged exchange-traded fund (ETF) have loan value?
Immediately.
53
Who is responsible for supervising an assistant representative?
At a non-OSJ branch, a principal or representative designated by the member.
54
What is TRUE regarding the use of supplemental MPIDs?
They are not subject to unexcused withdrawal penalties.
## Footnote
A member firm that is registered as a market maker in a specific security must have its own two-sided firm quote. This is known as its Primary MPID. A FINRA member firm may have additional displayable or non-displayable supplemental MPIDs. The non-displayable (nonattributable) quotes or orders are posted anonymously through Nasdaq's NSDQ. Supplemental MPID quotes may be one-sided and are not subject to unexcused withdrawal penalties. Trades should be reported using the same MPID as the quote. They may not be used for passive market makers or stabilizing bids. (75997)
55
Broker-dealers that hold customer stock in street name are required to forward official communications under what condition?
If the issuing corporation pays the expenses.
56
If a transaction in a TRACE-eligible security is executed at 6:10 a.m., when may the trade be reported to FINRA?
8:15 a.m.
Transactions executed in a TRACE-eligible security on a business day at or after 12:00:00 a.m. ET through 7:59:59 a.m. ET must be reported the same day no later than 15 minutes after the TRACE system opens.
## Footnote
Transactions executed in a TRACE-eligible security on a business day at or after 12:00:00 a.m. ET through 7:59:59 a.m. ET must be reported the same day no later than 15 minutes after the TRACE system opens. 8:16 is incorrect since that reporting time is after 8:15 a.m. Any transaction in a TRACE-eligible security executed between 8:00 a.m. and 6:29:59 p.m. (i.e., TRACE hours of operation) must be reported within 15 minutes.
(15184)
57
What is TRUE regarding the supervision of real-time communication through social networking sites?
This communication is regulated in a manner that's similar to correspondence.
58
What is the maximum number of days a firm can maintain a temporary hold on disbursements or transactions in an account believed to be subject to financial exploitation?
55 business days, with 15 initial days that can be extended by 10 business days, and can be extended by 30 business days afterwards.
59
What must be true for a FINRA member firm to receive a discount from the offering price when selling mutual fund shares?
A signed selling agreement.
60
What must be revealed when preparing a report on a transaction?
Current or prior relationship between the author of the opinion and any party to the transaction.
Compensation due to the broker-dealer that prepares the report if the compensation is contingent on the deal closing
61
Who receives the cash dividend if a stock is sold short on the ex-dividend date?
The lender of the stock.
## Footnote
When an investor sells short, the broker-dealer executing the short sale borrows the stock on behalf of the investor. Since the stock was sold short on the ex-dividend date, the owner (lender) and not the buyer of the stock is entitled to the cash dividend. Remember, for the buyer of the stock to be entitled to the cash dividend, the purchase must be made prior to the ex-dividend date. (79269)
62
When advertising a collateralized mortgage obligation (CMO), what must a broker-dealer include,
A statement that yield-to-average life may fluctuate
The term "collateralized mortgage obligation" within the product name
That government agency backing only applies to the face value of the securities, not any premium paid
the CMO cannot be compared to any other types of investments,
63
Which statement regarding the continuing education (CE) requirements for associated persons of broker-dealers is TRUE?
All associated persons who fail to complete the Regulatory Element of their continuing education program will have their registrations deemed CE inactive.
64
Which statement is TRUE regarding carrying agreements?
Agreements for both fully disclosed and omnibus accounts must be submitted to FINRA prior to becoming effective.
65
If two FINRA broker-dealers execute an OTC transaction in a foreign equity security not listed on a U.S. national securities exchange, what is TRUE concerning the reporting of this transaction?
The trade must be reported through the ORF within 10 seconds.
66
Which statement is TRUE concerning electronic communication networks (ECNs)?
They can be used by investors who want to trade anonymously.
67
What is the reporting requirement for an OTC transaction in a foreign equity security executed by two FINRA broker-dealers?
The trade must be reported through the ORF within 10 seconds.
68
What is a key feature of electronic communication networks (ECNs)?
They can be used by investors who want to trade anonymously.
## Footnote
ECNs are securities trading systems designed to anonymously match buyers with sellers.
69
What must a broker-dealer do to solicit securities transactions using confidential, non-public information?
If directed by the issuer, a broker-dealer must first obtain the consent of the issuer.
In order to use confidential, non-public information obtained in the capacity of a fiduciary, to solicit securities transactions, a broker-dealer must first obtain the consent of the issuer. (11306)
70
What action should a principal take if counterfeit securities are discovered?
Report the counterfeit security within one day.
When a principal discovers that his broker-dealer is in possession of counterfeit securities, a report must be filed within one day of discovery with the agent of the issuer, the FBI, and the SIC (Securities Information Center).
71
Under SEC Rule 144, when does a holding period NOT apply?
When the securities are being sold for the estate of a deceased individual.
## Footnote
If the restricted securities are held by the estate of a deceased individual who's not affiliated with the issuer, the holding period under Rule 144 is waived. If the deceased is affiliated with the issuer, the normal holding period is applicable.
72
What is one feature that a REIT is permitted to have on an annual basis?
At least 95% of its gross income must be derived from real-estate-related activities (such as rental income), interest received on mortgages, or dividends and interest. Of that 95%, at least 75% must be derived solely from real-estate-related activities. This means no more than 5% of a REIT's income may be derived from non-real estate business. (99479)
73
According to the Customer Order Protection Rule, a broker-dealer may trade at the same price as a retail customer if the customer order it either
from an institutional account, defined as an account for (i) a bank, insurance company, S&L, or registered investment company, (ii) a registered investment adviser, or (iii) any other entity with total assets of at least $50 million.
Large orders, defined as orders for 10,000 shares or more and a value of at least $100,000, including those from retail customers
74
A brokerage firm has created a product that will pay investors a coupon rate plus a final payment that is based on the performance of copper, lead, nickel, and zinc commodity prices. Securities regulators classify this investment a(n):
Structured product
## Footnote
The underlying interest of a structured product may be one of many various investment instruments. These instruments include commodities, equities, bonds, currencies, and indexes. (87415)
75
A foreign broker-dealer that's not a FINRA member wants to purchase shares of a new issue that a member firm is underwriting. The foreign firm will:
Receive a discount from the offering price
## Footnote
there's an exception which allows FINRA members to grant a foreign broker-dealer with an underwriting discount and this broker-dealer may resell the securities outside of the U.S. at the public offering price. (11884)
76
A venture capital fund acquires 100,000 shares of restricted stock. Under Rule 144, in order to resell this stock, all of the following steps must be taken, EXCEPT that the fund:
Under Rule 144, sales of securities are not required to made to a qualified institutional buyer. This is a requirement of 144A (not Rule 144) transactions.
77
When is a broker-dealer NOT required to use the contemporaneous cost to determine the markdown on a bond transaction?
if an issuer's financial condition changes,
its credit rating changes,
or if there's a change in prevailing market interest rates,
broker-dealers are permitted to use prices other than their contemporaneous cost.
78
what is Contemporaneous Cost
79
what may predispure arbiration agreements not do?
Predispute arbitration agreements may not limit the type of claim the customer may file, the award that an arbitrator may make, nor limit or contradict the rules of FINRA.
80
What is the difference between Rule 144 and rule 144A
Rule 144 has to do with the selling of all restricted people
While Rule 144 a has to do with the sell of certain securities by a reporting company.
81
Can an RR send independently prepared Research to customers?
Yes, However depending if the communication this act will require approval by a principal in the case of retail communication
82
For a BD who does NOT carry customer funds or securities, when must they forward a check they received made out to a thrid party?
By Close of business
83
As it relates to a negotiated settlement, which of the following is also referred to as a delayed delivery?
Seller's option
## Footnote
Delayed delivery is an option whereby the delivery of securities is done on a later date than the usual settlement date. This is also referred to as seller's option because the seller either cannot or chooses not to deliver on a regular-way basis. With seller's option, the delivery date can be anywhere from the third business day after the trade to a date that's specifically written in the contract. (10294)
84
True or False: a RR who has been arrested and charged with a felony which does not invole securities must disclose said action on their U4
True
Disclosure or updating a Form U4 is required if a person has been charged with, indicted or convicted of, or pleaded guilty to, or pleaded no contest to, any felony; or misdemeanor involving investments or an investment-related business or any fraud
85
The maximum amount of compensation that the underwriter of a direct participation program may receive is limited to what percentage of the gross dollar amount of the securities sold?
10%
## Footnote
Broker-dealers cannot participate in a DPP offering in which the organizational and offering expenses are not fair and reasonable. The maximum compensation to underwriters cannot exceed 10% of the gross dollar amount of the securities sold. (11933)
86
A customer places a limit order to sell 54 shares of a stock listed on Nasdaq. This order:
May be accepted, will not be displayed, but is available for execution in the Nasdaq system
## Footnote
The Nasdaq system accepts round-lot orders (100-share increments), odd-lot orders (less than 100 shares), and mixed-lots (a round-and odd-lot order combined). Odd lots are not displayed in the Nasdaq quote system, but are available for execution
87
A customer's order to buy is executed on a principal basis by a market maker at 21.10 net plus commission. The trade is:
Fraudulent because of the hidden profit. adding commisson to a principal transaction is never allowed
## Footnote
A broker-dealer may never act as a broker (agent) and dealer (principal) in the same transaction. In this question, the member firm is acting as a principal, selling at a net price, and adding a commission as agent. This dual compensation arrangement is prohibited.
88
A broker-dealer is given how long to accept or decline a blockbuster trade?
15 minutes
A blockbuster trade (a trade of $1,000,000 or more to be executed through a broker-dealer's clearing firm) is held for 15 minutes. If the clearing firm does not respond by the end of that period, the trade is accepted. (76532)
89
When calculating markups, a broker-dealer must determine all of the following factors
Whether actual transactions or validated quotes may be used as the best evidence of the prevailing price
Whether the market for the stock is dominated and controlled rather than active and competitive
Whether it is a market maker or a retail broker-dealer
## Footnote
A broker-dealer's profit or loss situation is not a factor when calculating markups. The other factors listed are all considered when determining the prevailing market price on which markup calculations are based. (
90
An introducing broker-dealer with a $5,000 minimum net capital requirement may participate in which of the following activities?
Engage in occasional transactions for its proprietary account
A $5,000 broker-dealer introduces accounts on a fully disclosed basis to another firm and does not receive customer funds or securities. An introducing broker-dealer that receives customer securities is subject to a $50,000 minimum net capital requirement.
91
A secondary market trade in a collateralized mortgage obligation (CMO) must be reported to TRACE within:
60 minutes
Secondary market trades involving CMOs and CDOs (collateralized debt obligations) must be reported within 60 minutes. (11986)
92
According to SEC Rule 15c3-1, which of the following choices would trigger a $1,000,000 net capital requirement?
A self-clearing broker-dealer that acts as an executing broker in a prime-brokerage relationship
93
ADF (Alternative Display Facility)
For the ADF, the normal hours of operation are 8:00 a.m. to 6:30 p.m
third market trades (CQS) can be reported on TRF or ADF
94
what are some filing exemptions for retail communication
communications that had been previously filed with FINRA's adverstising department and are being used without material cahnges
Retail communications that don't make any financial or investment recommendations and don't promote a product or service of the member firm
Retail communications that simply identify a member firm's national securities exchange symbol
Retail communications that are posted on an interactive electronic forum
95
what are some exceptions to that allow a BD to trade ahead of a customers order
trade is for an institutional account,
larger orders (10,000 shares or $100,000 in value)
96
characteristics of CRD(central Registaton Depositiory)
is a pool of infomation concerning the employment and disciplinary histories of registered persons.
process applicatons for agent registrations for the states
processing applications for agent and BD regisstration withdrawls.
if any infomation on an individuals form U4 changes an amednment must be filed promptly
97
What is the reporting threshold on Form U-4 for arbitration awards?
Fines in excess of $2,500 and arbitration awards of $15,000 or greater must be reported on Form U4. These awards would also be disclosed to the public through FINRA's BrokerCheck system.
98
All of the following statements regarding private securities transactions by a person associated with a member firm are TRUE
If a registered representative will be compensated, the firm must approve the transaction in writing.
If a registered representative will not be compensated, the firm must be notified of the representative's participation
A registered representative's personal transactions in mutual funds are not covered by this rule.
99
what is Payment for order flow
Payment for order flow (PFOF) is a form of compensation, usually in fractions of a penny per share, that a brokerage firm receives for directing orders and executing trades to a particular market maker or exchange.
## Footnote
This practice is referred to as payment for order flow. The most relevant point arising from this practice is that FINRA members are required to disclose these practices in their quarterly order routing reports which are accessible on their websites. In addition, any receivables related to this activity are treated as non-allowable assets. (15310)
100
what is interpositioning
Interpositioning refers to the illegal practice of using an unneeded third party, usually another broker-dealer, between the customer and the best available market price, with the sole purpose being to generate extra commissions at the cost of the customer
101
When a member firm issues a research report, it must generally be approved by
A supervisory analyst
## Footnote
When a member firm issues a research report, it must be approved by a supervisory analyst. A supervisory analyst must be registered as such and is required to pass a separate examination. A person who's registered solely as a General Securities Principal is not qualified to supervise the conduct of a person who's defined as a research analyst. (11608)
102
Each of the following statements are TRUE if a broker-dealer is conducting its own private placement
An offering memorandum must be provided to investors.
An offering memorandum must be filed with FINRA.
An offering memorandum is not required to be provided if the investors are institutiona
103
What is the day-trading buying power of an account that has a long market value of $50,000 and a debit balance of $20,000?
$70,000
| Remeber to take into maitnence requirement
## Footnote
Day-trading buying power is limited to four times the trader's maintenance margin excess, determined as of the close of the previous day. The SRO maintenance requirement is 25% of the long market value ($12,500). Therefore, the excess maintenance requirement is $30,000 less $12,500, or $17,500. The day-trading buying power is 4 x $17,500, which equals $70,000.
104
Hard copies of processed fingerprint cards (or any substitute record if the cards are not returned after being processed) must be retained:
At the firm's principal office
## Footnote
Hard copies of processed fingerprint cards (or any substitute record if the cards are not returned after being processed) must be retained at the firm's principal office.
105
The requirement that a registrant maintain effective internal controls regarding its financial reporting is:
Found under Regulation S-X and requires an independent public accountant to attest to the statement
## Footnote
Regulation S-X sets forth the form and content for financial statements filed under the Securities Act of 1933 and reports filed under the Securities Exchange Act of 1934. The regulation requires that an attestation report be prepared by an independent accountant.
106
If a person wants to extend a tender offer how must they report to the public?
they are required to hold a press release no later than the moning of the day following the the scheduled expiration date.
107
Which of the following parts of a broker-dealer's website would need to be filed with FINRA?
Product information on the benefits of mutual funds
108
A stock is sold short on Tuesday, October 7 and the ex-dividend date is Wednesday, October 8. Who would receive the cash dividend?
The purchaser of the stock
Remember, for the buyer of the stock to be entitled to the cash dividend, the purchase must be made prior to the ex-dividend date.
## Footnote
Remember, for the buyer of the stock to be entitled to the cash dividend, the purchase must be made prior to the ex-dividend date.
109
characteristics of simplifed arbitration
Simplified industry arbitration cases are decided by one non-public arbitrator.
if a customer brings an action against a firm, it's referred to as simplified arbitration, and one public arbitrator decides the case.
110
what are the requirment when an issuer seeks to obtain listing on NASDAQ
There are three standards, out of the three standards the below are always necessary
1) A $4 minimum bid price
2) 3 or 4 market makers
3) Subject to corporate governance
may not be applicable,
1) Pretax earnings
2) Cash flow
3) Market capitalization
4) Revenue
111
Which of the following is/are responsible for ensuring the accuracy of a trade report between a clearing and non-clearing firm?
Both firms
112
what are able to be used to offset risk in a portfolio margin
* All margin equity securities
* Listed options
* Security futures products
* Unlisted derivatives
* Warrants
* Index warrants and related instruments
| Rights are not eligible to be used as an offset in a Portfolio account
113
Fidelity bond covers which of the following incidents
* Loss of securities
* Forgery
* Fraudulent trading
* misplacement
114
what is Fidelity Bond?
A fidelity bond is a form of business insurance that offers an employer protection against losses that are caused by its employees’ fraudulent or dishonest actions.
115
If the National Adjudicatory Council (NAC) determines that an associated person should remain disqualified, the person's employing firm can take which of the following actions?
The firm may appeal this decision to the SEC.
116
