Ch. 17 Flashcards
If a trainee fails a FINRA exam on the third attempt, he must wait ___ days to re-test.
180 days
Candidates who have failed a qualification exam once must wait ___ days before retaking the exam.
30 days
True or False: The FINOP is responsible for the accuracy and final approval of a BD’s financial reports.
True. The FINOP is responsible for operations department activities and the preparation of financial reports.
True or False: Every registered employee must be assigned to a principal.
True
If an employee is qualified with a Series 82, what can he sell?
Private placements as part of a primary offering
What is the appropriate registration designation to supervise investment company sales, but not stock trades?
Series 26
True or False: A general securities principal is responsible for financial reporting.
False, a Financial and Operations Principal performs that function.
May a Series 6 registered person engage in option trades?
No
Mary has been an RR for nine years. When is she next subject to the Regulatory Element of Continuing Education?
In two years, on the 11-year anniversary of her initial registration
True or False: By passing the SIE Exam, an individual is permitted to act as a registered representative.
False. Candidates also need to pass another exam (e.g., Series 7) based on their job responsibilities.
When must RRs complete the Regulatory Element of Continuing Education?
On the 2-year anniversary of their registration and every 3 years thereafter.
If an employee is qualified with a Series 52, what activities are permitted?
Underwriting, selling, and trading of municipal bonds
Those qualified as municipal RRs (Series 52) may sell, trade, or underwrite municipals, but may not ____________ sales.
May not supervise sales
When must a registered person complete the Regulatory Element of the CE requirement?
Two years after her initial registration, and every three years thereafter
If a registered person joins the military, what is her registration status?
She falls under the special inactive status designation.
What exam must be passed in order to be registered at the state level?
Series 63, 65, or 66
True / False: A registered employee of a BD is required to be fingerprinted.
True
What is the appropriate registration designation to supervise investment banking, market making, advertising and sales?
Series 24
If an employee is qualified with a Series 50, what can he do?
Perform the services of a municipal advisor
True or False: Firm Element Continuing Education requires BDs to update employees on job and product-related subjects.
True
True or False: Municipal securities representatives may sell municipal bond funds.
False; Municipal representatives may only sell individual municipal bonds.
What is the appropriate registration designation to supervise the municipal activity for a BD?
Municipal Securities Principal (Series 53)
True or False: The acceptance of customer orders must be done by a registered employee.
True
Describe a Principal.
Officers, managers, or supervisory personnel who are involved in the day-to-day management of a member firm’s business.
What is the role of the FINOP?
To be solely responsible for the financial operations of a broker-dealer
True or False: All employees of a BD are required to be fingerprinted.
False. Clerical employees are not fingerprinted if they do not handle customer accounts, assets, or books and records.
True or False: A RR who fails the Regulatory Element of CE is allowed to work for a B/D in an unregistered capacity.
True. However, the RR may not work in a registered capacity.
Registration status becomes __________ if the Regulatory Element of CE is not completed within the prescribed period.
Inactive
Who is responsible for approving the accuracy of a BD’s financial reports?
The Financial and Operations Principal (FINOP)(Series 27)
True or False: Firms are responsible for investigating the qualifications and experience of applicants for registration.
True
If an employee is qualified with a Series 79, what can she do?
Investment banking functions
What two types of securities registrations would allow an individual to offer variable annuities?
Series 6 or Series 7
True or False: It is acceptable to disclose the content of a qualifying exam to a co-worker.
False
How often are firms required to evaluate their training needs?
Annually
What is the appropriate registration designation to supervise sales, but not investment banking?
Series 9 and 10
Series ____ or Series _____ will qualify an individual to sell municipal securities.
Series 7 or Series 52
What are the justifiable reasons for denying an individual’s registration?
Conviction for any felony or securities-related misdemeanor within the last 10 years
What information does the Central Registration Depository (CRD) system provide about a registered person?
Employment and disciplinary history
Identify the acronym: CRD
Central Registration Depository
If a trainee fails a FINRA exam on the first attempt, he must wait __ days to re-test.
30 days
True or False: RRs currently serving in the military can receive a CE waiver.
True
If an employee is qualified with a Series 6, what can he sell?
Investment companies (mutual funds), variable annuities, and 529 plans
True or False: An RR who served in the military must retake the Series 7 when he rejoins his broker-dealer.
False. An RR who served in the military is put into special inactive status and is not require to retest.
May a Series 6 registered person engage in the sale of individual stocks or bonds?
No. Series 6 RRs may only sell packaged products, such as mutual funds and annuities.
Firm Element continuing education is subject to ______________ to show completion, but not ________ with FINRA.
Recordkeeping but not filing with FINRA
List the broker-dealer employees who need to be fingerprinted.
Salespersons, employees who handle money or securities, and anyone who deals with records of original entry
How many days are representatives given to complete the Regulatory Element of Continuing Education?
120 days
Who supervises a registered representative (RR)?
Supervising principal
If an employee is qualified with a Series 7, what can she sell?
Corporate stocks, bonds, and options, investment companies (mutual funds), variable annuities, DPPs, and 529 plans
Who supervises a firm’s municipal activities and provides account approval, transaction review, and complaint handling?
Municipal Securities Principal (Series 53)
True or False: A registered person with no disciplinary actions for 15 years is excused from the Regulatory Element.
False. The Regulatory Element of Continuing Education is an ongoing process with no graduation from the plan.
What is the purpose for obtaining a Series 9/10 or Series 24 registration?
The Series 9/10 or 24 the registrations required for supervising registered representatives.
True or False: Only registered personnel are required to be fingerprinted.
False. Any individuals handling funds or securities are required to be fingerprinted.
May an RR disclose Series 6 examination content to his supervisor?
No. Disclosure of exam content may invalidate the result.
What is the continuing education (CE) requirement of an RR who is currently serving in the military?
His registration is in Special Inactive Status and the CE requirement is halted.
If a qualification exam has been failed for the third time, what waiting period applies?
180 days
True or False: All registered personnel of a BD must complete the Regulatory Element of Continuing Education.
True
True or False: The FINOP is an employee who is solely responsible for the financial management of a BD.
True
How often must a BD’s Firm Element Continuing Education program be reevaluated?
Annually
What is the CRD system?
A system that pools information concerning the employment and disciplinary histories of registered persons
If an employee is qualified with a Series 57, what can he do?
He can run a broker-dealer’s proprietary trading (e.g., a broker-dealer making a market on Nasdaq or the OTC markets).
What is the CRD?
The Central Registration Depository (CRD). CRD is FINRA’s database for member registrations.
What licenses are required for an agent to sell variable annuities or variable life?
Both a life insurance license and FINRA Series 6 or 7 license is required
Who meets FINRA’s definition of associated person?
Officers, directors, partners, branch managers, and employees who are engaged in sales or investment banking
What is an RR’s concern if her client moves to a new state?
Ensuring that the RR is properly registered in the new state (Uniform Securities Act)
Describe a registered representative.
Sales personnel who are engaged in securities business activities
