Ch. 3 Flashcards
Identify the acronym: CRD
Central Registration Depository
Is there a limit to the amount of net capital the Administrator may require of a BD?
Yes. The Administrator may not set a requirement that exceeds the federal (SEC) requirement.
What is a consent to service of process?
A document that appoints the Administrator as attorney for any non criminal legal complaints issued against a registrant
May the Administrator set net capital requirements for BDs?
Yes
If an agent has applied for registration, but has not yet heard back from the Administrator, what may she sell?
The agent is not permitted to sell securities. If she is properly licensed, she may sell life insurance or fixed annuities
May an agent whose client is visiting another state sell securities to the client without wing registered in that state?
Yes, provided the client is in the state temporarily
In state law, individuals who represent BDs in effecting securities transactions are referred to as ________.
Agents
What is the purpose of a consent to service of process?
To appoint the Administrator as the applicants attorney to receive and process any non criminal legal complaints.
T/F: In state law, individuals representing issuers in effecting securities trades are ALWAYS deemed agents.
F; individuals are not deemed agents if representing issuers of exempt securities or effecting exempt transactions
An individual who represents an issuer in selling registered, non exempt securities for compensation is an ________.
Agent
T/F: The USA requires all employees of a BD to register.
F; only those representing a BD in effecting transactions (as an agent) must register
T/F: An employee who is hired to assist in selling IPO shares is required to be registered.
T
If a BD or an IA ceases operations, how long must it maintain a surety bond?
Surety bonds must be maintained for three years after the firm ceased operations
A client of a Canadian BD is visiting the US. May the agent do business with her without registering in the state?
Yes. Since she is an existing client of the Canadian BD, business may continue in the state
A BD in New York gets an order from a client who is on vacation in Florida. Does the firm need to register in Florida?
No. Registration is not required since the client is an existing client who is temporarily in Florida
To apply for a securities license, a person must file Form ____ with FINRA.
U4
T/F: An agent may sell fixed annuities if she is not yet registered with the Administrator.
T; since fixed annuities are not securities, registration with the Administrator is not required
T/F: A consent to Service of Process must be filed by BDs, but not their agents.
F; a consent to service of process is required of all registrants
May the Administrator set minimum net capital requirements for BDs?
Yes, but the requirement on BDs may not exceed the federal (SEC) requirement.
Is an individual who represents a BD in the sale of Treasury bonds considered an agent?
Yes, since anyone representing a BD in the same of securities is an agent
Is an individual who represents a BD in the sale of a private placement considered an agent?
Yes, since anyone representing a BD in the sale of securities is an agent
T/F: On Form U4, a person must disclose any aliases or previously used names.
T; any Alia’s or previously used name could simply include a persons maiden name
T/F: Canadian agents cannot effect trades with existing Canadian clients who are temporarily in the US.
F; provided the relationship with the client existed prior to entering the US, trades may be effected
Is an individual who represents an issuer in the sale of registered stock considered an agent?
Yes. An individual who represents an issuer of securities being offered publicly must register as an agent
Who must sign a Consent to Service of Process?
Any issuer, BD, IAR, or agent initially registering to engage in business within a state
If a person works for a federally chartered bank, is her required to register with the SEC or a state Administrator?
No. Only non clerical employees of broker dealers and investment advisers are required to register
T/F: A partner, officer, or director of a BD is always considered an agent of a BD.
F; a partner, officer, or director is deemed an agent of a BD if she is involved in the purchase/sale of securites
Is an individual who represents an issuer in the sale of the issuers stock to its underwriter considered an agent ?
No, since the individual is involved in an exempt transaction
List some of the exclusions from the definition of a BD.
Agent, issuer, bank, or a BD with no office in the state that only deals with institutions or its existing clients