Ch 4 - Overview of Regulatory Framework Flashcards
A municipal finance professional (MFP) is…
an employee of a FINRA member engaged in municipal security representative activities such as underwriting and trading. As per the Municipal Securities Rulemaking Board (MSRB), a municipal finance professional (MFP) is an associated person of a member firm who is primarily engaged in municipal securities representative activities, including underwriting, sales and trading, or any other activity that involves communications with the public regarding municipals.
Those persons employed by a FINRA-registered broker-dealer to do nothing other than provide training for its associated persons must be registered as a….
Principal. Those who manage any part of a member’s securities activities must be registered as a principal with FINRA, including those involved solely in training associated persons.
When is the electronic filing of all information on customer complaints by broker-dealers with FINRA due?
Broker-dealer firms must electronically report information on all customer complaints to FINRA within 15 days of the end of each calendar quarter. Both these filings and the complaints must be retained by the firm for 4 years.
Describe the four sets of rules and codes in FINRA’s manual.
Conduct Rules: sets out fair and ethical trade practices that member firms and their representatives must follow with dealing with the public. Included are events that must be reported.
Uniform Practice Code (UPC): The UPC establishes the uniform trade practices including settlement, good delivery, ex-dates, confirmations, don’t know (DK) procedures, and other guidelines for BDs to follow when they do business with other members.
Code of Procedure (COP): The COP describes how member violations of the Conduct Rules will be handled.
Code of Arbitration (COA) Procedure: The COA Procedure governs the resolution of disagreements and cliams between members, RRs and the public, it addresses monetary claims.
What are the two components of the Continuing Education requirement?
Firm Element: requires member firms to prepare an annual training plan that must be given to all registered persons who have direct contact with the public.
Regulatory Element: requires all registered persons complete a computer-based training session within 120 days of the person’s second registration anniversary and every 3 years thereafter. If a person fails to complete the regulatory element within timeframe, FINRA will deactivate that person’s registration until the requirements of the program are met.
