Ch 4 Deck 3

Question 1

Events that prevent a person from being registered or losing membership (I think both)

Answer 1

Statutory Disqualification

Question 2

One reason for Statutory Disqualification is having been barred, suspended or expelled from

Answer 2

membership in an SRO, including FINRA

Question 3

One reason for Statutory Disqualification is if the SEC has

Answer 3

denied, suspended or revoked the application

Question 4

One reason for Statutory Disqualification is Associating with a person who has been

Answer 4

1. Barred, suspended, or expelled from membership in an SRO, including FINRA
2. SEC has denied, suspended or revoked the application

Question 5

One reason for Statutory Disqualification is filing

Answer 5

false or misleading facts on an application

Question 6

One reason for Statutory Disqualification is within the last 10 years, having

Answer 6

prior felony convictions or securities-related

misdemeanors

Question 7

One reason for Statutory Disqualification is Receiving prior

Answer 7

disciplinary orders of the Administrator

Question 8

One reason for Statutory Disqualification is having willfully

Answer 8

violated securities laws

Question 9

One reason for Statutory Disqualification is a failure to supervise

Answer 9

others who violated securities law

Question 10

Once the firm becomes aware of a statutory disqualifying event, the firm must report it

Answer 10

to FINRA within 30 days of learning of the action.

Question 11

If a person is subject to statutory disqualification, The firm must either

Answer 11

terminate the representative
or
Allow the person to continue working

Question 12

If a person is subject to statutory disqualification, and the firm wishes to Allow the person to continue working, they must

Answer 12

file a MC-400

AND an amended U-4

Question 13

If a person is subject to statutory disqualification, In most cases, if the firm and FINRA agree, the person can continue to work

Answer 13

in a ministerial or clerical position.

Question 14

If a person is subject to statutory disqualification, and the firm wishes to Allow the person to continue working the MC-400 form and amended U-4 must be filed within

Answer 14

10 days of learning of the action.

Question 15

Each member firm must set up a supervisory system that is

Answer 15

capable of managing reps’ activities.

Question 16

Firm supervisory system must include written procedures in place to

Answer 16

achieve compliance and detect rule violations

Question 17

Firm supervisory system must designate registered principals who will

Answer 17

enforce the written supervisory procedures

Question 18

Firm supervisory system must identify which

Answer 18

principal is responsible for which procedure in a designation record

Question 19

Firm supervisory system must report to FINRA

Answer 19

who the principals in the designation record are

Question 20

Firm supervisory system must keep

Answer 20

The designation record for at least 6 years.

Question 21

Firm supervisory system must Designate certain offices as

Answer 21

offices of supervisory jurisdiction (OSJ)

Question 22

Firm supervisory system Assign to each representative

Answer 22

a principal for supervision

Question 23

OSJ Activities include order

Answer 23

execution and market making

Question 24

OSJ Activities include structuring of

Answer 24

public offerings or private placements

Question 25

OSJ Activities include Final approval, review and endorsement of

Answer 25

customer orders

Question 26

OSJ Activities include Final approval of new

Answer 26

accounts

Question 27

OSJ Activities include Final approval of literature for

Answer 27

advertising or sales (recently changed to retail communications)

Question 28

OSJ Activities include supervision of

Answer 28

persons at branch offices

Question 29

The main office is always considered

Answer 29

an OSJ

Question 30

For each non-OSJ branch office, There must be at least one

Answer 30

registered representative or principal

Question 31

For each OSJ, There must be at least one

Answer 31

registered principal that is responsible for it

Question 32

Do all misdemeanors count for statutory disqualification?

Answer 32

No just securities related misdemeanors

Question 33

Any location where associated employees are soliciting or effecting (but not executing) purchases or sales of securities

Answer 33

branch office

Question 34

Office responsible for supervising the activities of employees at one or more non-branch locations of the member firm

Answer 34

branch office

Question 35

A branch office is not the primary

Answer 35

residence of the RR

Question 36

The residence of the RR is a branch office if meetings

Answer 36

with customers take place there

Question 37

the residence of the RR is a branch office if non-

Answer 37

family members work there

Question 38

A branch office is not a location other than the primary residence that is used less than

Answer 38

30 business days annually (vacation home)

Question 39

A branch office is not an office location established solely for customer

Answer 39

service with no sales activities

Question 40

A branch office is not a location established for back

Answer 40

office functions where no sales are begin conducted

Question 41

Each RR and Principal must participate in an annual

Answer 41

compliance meeting

Question 42

Group size for annual compliance meeting

Answer 42

individually or as a group

Question 43

purpose of annual compliance meeting

Answer 43

keep RR's and principals up to date

Question 44

annual compliance meeting must cover

Answer 44

compliance matters

Question 45

annual compliance meeting documentation includes

Answer 45

who must attend | who attended