Chapter 1 - Sales Supervision Flashcards
True or False
FINRA is responsible for overseeing the equity trading markets of the United States ONLY.
TRUE
What is the regulatory unit of the NASD and NYSE called?
FINRA
Advertisements dealing with which of the following products must be pre-filed with FINRA?
- Options
- CMOs
- Public DPPs
- Treasury securities
- Options
The following advertisements must be pre-filed with FINRA 10 days prior to first use:
Options;
Mutual fund retail communications with member-prepared performance rankings;
and
Bond mutual funds with volatility rankings.
If it is determined that damages must be paid as a result of insider trading, who is the check made payable to?
The Department of Treasury
Not the SEC - this way the SEC cannot be accused of prosecuting insider trading cases to generate revenue for itself
How long is the statute of limitations for a private party to sue a person guilty of insider trading?
5 years
True or False
All retail communications involving securities futures (options) must be filed with FINRA 10 business days after first use.
False.
All retail communications involving security futures (options) must be filed with FINRA 10 business days prior to first use.
True or False
All retail communications involving security futures (options) must be filed with FINRA 10 business days prior to first use.
True
True or False
Mutual fund retail communications with member-prepared performance rankings must be filed with FINRA 10 business days after first use.
False
Mutual fund retail communications with member-prepared performance rankings must be filed with FINRA 10 business days prior to first use.
This is also the case for bond mutual fund retail communications with volatility rankings.
True or False
Bond mutual fund retail communications with volatility rankings must be filed with FINRA 10 business days after first use.
False
Bond mutual fund retail communications with volatility rankings must be filed with FINRA 10 business days prior to first use.
Mutual fund retail communications with member-prepared performance rankings must also be filed 10 days prior to first use.
True or False
Mutual fund retail communications with member-prepared performance rankings must be filed with FINRA 10 business days prior to first use.
True
True or False
Bond mutual fund retail communications with volatility rankings must be filed with FINRA 10 business days prior to first use.
True
When must retail communications regarding CMOs be filed with FINRA?
Within 10 business after first use.
The retail communications that must be filed 10 days after first use (always) are CMO, publicly traded-structured products, DPP and other mutual fund retail communications.
When must retail communications regarding publicly traded structured products (like ETNs) be filed with FINRA?
Within 10 business after first use.
Registered structured products (such as Exchange
Traded Notes - ETNs) based on a single security,
basket of securities, an index, a commodity, a debt
issuance or a foreign currency. Note that this does
not apply to privately placed structured products -
only to registered offerings which can be traded;
When must retail communications regarding registered direct participation programs (DPPs) be filed with FINRA?
Within 10 business days after first use.
Registered direct participation program (DPP) retail communications. Filing does not apply to privately placed DPPs
When must mutual fund retail communications (that do NOT include member-prepared performance rankings or bond fund volatility ratings) be filed with FINRA?
Within 10 business days of first use
Investment Company retail communications that do not include member-prepared performance rankings and bond fund retail communications that do not include fund volatility ratings. Note, as well, that an Omitting Prospectus under SEC Rule 482 must be filed;
When must templates for written reports produced by, or concerning an investment analysis tool be filed with FINRA?
Within 10 business days after first use.
When must broadly disseminated free-writing prospectuses be filed with FINRA?
Within 10 business days after first use.
Under rule 405 (Automatic Shelf Registration)
When must tombstone ads that comply with SEC Rule 134 be filed with FINRA?
There are no filing rules for tombstone ads that comply with SEC Rule 134.
When must recruitment ads be filed with FINRA?
They don’t have to be filed
When must non-promotional change announcements, such as change of office address or phone number be filed with FINRA?
Never. No filing rules.
Yes or No
Do independently prepared reprints, press releases, institutional sales material, correspondence, and communications posted on an online interactive forum need to be filed with FINRA? If so, when must they be filed by?
No.
True or False
After a firm’s first year of operations, retail communications do not need to be filed with FINRA (but are subject to spot check). Unless the communication is regarding options, CMOs, publicly traded structured products, DPPs, mutual funds, investment analysis templates, and broadly disseminated free-writing prospectuses, limited partnerships, and government securities.
True
During a firm’s first year in operations, when must they file retail communications with FINRA?
10 business days prior to first use.
FINRA requires that __________ be kept in each branch office, available for customer inspection.
A copy of the FINRA rule manual
Web-access from a branch to the FINRA website is permitted.