17: PROCESSING TRANSACTIONS (86)

Question 1

T/F: FINRAs trade reporting facility (TRF) reports data for transactions in Nasdaq stocks or in exchange-listed stocks when they occur off of the exchange trading floor.

Answer 1

True

Question 2

T/F: Broker-dealers use a due bill when the incorrect party receives a distribution from the issuer. (such as a dividend)

Answer 2

True

Example: your client bought shares before the ex dividend date but then didn’t’ receive the dividend. Then a due bill would be sent to the BD representing the seller so your client would get the dividend amount it’s owed

Question 3

T/F: A DK (don’t know) notice is used when a broker-dealer receives a confirmation for a trade that it has no record of (the firm does not know of the trade).

Answer 3

True

when firm has no record of trade

Question 4

T/F: Reclamation is used when a FINRA member firm has accepted certificates thinking they were in proper deliverable form. Sometime later, the firm discovered those certificates are not good delivery and sends a reclamation notice demanding acceptable replacements.

Answer 4

True, this is when reclamation happens

Question 5

A registered principal must approve all orders

A)
prior to execution.
 B)
within one business day.
 C)
by the end of the trading day.
 D)
prior to entry.

Answer 5

C) by end of trading day

Explanation
Registered principals must approve all orders promptly after execution. FINRA interprets this term, however, as by the end of the trading day. Orders may always be approved earlier, but are not required to be.

LO 17.a