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SIE > Account Features > Flashcards

Account Features Flashcards

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SIE Exam flashcards
1
Q

For cash accs what’s the settlement expectation

A

regular way t+2

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2
Q

What are the payment expectations for cash accs

A

by 2 days after settlement (4 days after purchase)

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3
Q

What accs can only be cash accs

A

accs with contribution limits like IRAs/retirement accounts and cust accs

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4
Q

What is the most common source of stock for someones margin acc

A

another customers margin acc

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5
Q

What is hypothecation

A

pledging your secs as collateral for margin trading

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6
Q

Where does the BD get the money for margin trades

A

loan from a bank where they rehypothecate the secs the customer pledged

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7
Q

What Reg oversees rehypothecation

A

Fed Reserve Reg U

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8
Q

What can a BD do and not do with customer secs

A

cannot commingle customer secs with BD secs
can commingle two customers secs if they have signed a hypothecation agreement

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9
Q

If a partnerships/corps documents dont mention margin then

A

its okay

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10
Q

If the trust or other fiduciary docs are silent on margin then

A

its NOT allowed

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11
Q

What are the two forms needed for margin accounts

A

credit agreemnet
hypothecation

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12
Q

What is an optional form for margin accs

A

loan agreement

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13
Q

Whats required from the BD to the cust on margin accounts

A

risk disclosure yearly

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14
Q

What are the risks with margin accounts

A

cannot choose what secs get sold if maintennace call is not met
can lose more money than deposited
not entitled to an extension of time to meet a margin call
firms can increase margin requirements without advance notice

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15
Q

What Reg oversees what Secs can be pruchased with margin and which can be used as collateral

A

Reg T

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16
Q

What secs can be purchased with margin AND used for collateral

A

exchanged listed stocks and bonds
NASDAQ stocks
Approved OTC issues
warrants

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17
Q

What secs cannot be purchased with margin BUT can be used as collateral

A

mutual funds
New issues if they meet the normal Reg T reqs

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18
Q

Whats an additional requirement for using mut funds or new issues for collateral

A

must be held for 30 days

19
Q

What secs cannot be purchased with margin AND cannot be used as collateral

A

options
rights
non-listed secs
insurance contracts

20
Q

What secs are exempt from Reg T margin reqs

A

any kind of gov secs

21
Q

What does marginable mean

A

secs that can be used as collateral

22
Q

What is the current Reg T req on initial deposits in margin accounst

A

50% val of the purchase

23
Q

What is the current FINRA req on initial deposits in margin accounts

A

2k or 100% whichever is less

24
Q

Do you need to follow the Reg T or Finra reqs for initial deposit

A

whichever is greater

25
Q

What is a maintenance call

A

if a customers equity in their margin accs drops below 25% of the acc val, asked to deposit to bring back to 25%

26
Q

Normal time frame for maintenance calls

A

by end of the day

27
Q

Whats FINRAs maintenance %

A

30%

28
Q

When would you recommend a fee based account and why

A

freq traders bec set monthly fee regardless of amount of trades

29
Q

Long term buy and hold investor should have what payment structure and why

A

commission based bec little trades so less transactions to be charged

30
Q

What is a solicited trade

A

something that a BD or RR did led to the customer buying

31
Q

What is reqd for solicited trades

A

marked as solicited

32
Q

When the RR has a POA to make trades without the preauth from the customers its a

A

discretionary trade

33
Q

What are the three A’s of discretion

A

the action
the amount
the asset

34
Q

For a trade to not be discretionary, what is needed

A

cust needs to OBJECTIVELY provide all A’s

35
Q

do time and price need a discretionary auth

A

no

36
Q

Whats needed for a discretionary trade to be entered

A

auth for discretionary trading in writing
principal of the firm approves the discre auth in writing
principal of the firm promptly approves trades after entry

37
Q

Discretionary auth can be given to

A

the representative not the BD

38
Q

What happens to dis auth when the RR leaves the BD

A

ends

39
Q

How can a customer revoke dis auth

A

in writing

40
Q

What are wrap accs

A

mult services provided for a single fee
like asset allocation, portfolio man

41
Q

Wrap accs are usu

A

investment advisory accs

42
Q

Investment advisory accs have a

A

fiduciary resp

43
Q

What is a disclosure req for investment advisory accs

A

client may be able to get all our services for less if all on a separate basis

44
Q
A

SIE (13 decks)

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