Chapter 13 - Settlement and Corporate Actions Flashcards
Order ticket details regarding how a trade is to be executed.
Order entry
Occurrence of a trade in the market center.
Execution
Executing firms agree to the details of a trade: any unrecognized trades may result in a DK notice
Clearing
The day on which the customer’s name is placed on or taken off the issuer’s books.
Settlement
Safeguarding of client and firm assets.
Custody
A member firm’s _____ makes the final determination as to whether a security is in good deliverable form and may be transferred to the new owner.
transfer agent
(True or False) Book entry requires physical delivery of securities.
False
(True or False) A stock power can be used in lieu of a signed certificate.
True
(True or False) Stock transactions must be delivered in multiples of 100.
True
(True or False) Restricted securities can be used for good delivery.
False
A company’s attempt to improve marketability of a stock.
Stock split or stock dividend
An intent to purchase shares of another owner:
tender offer
Shareholders receive new shares of a business unit of a company.
Spin-off
Provides securities settlement and clearing services in the US.
The Depository Trust and Clearing Corporation
For good delivery, what unit value is required for bonds?
$1,000
When do companies issue proxy statements?
Whenever there is a voting issue for their shareholders.
Name changes, mergers, reverse splits, liquidations, bond redemptions, and partial or full calls are:
common mandatory corporate actions
A stockholder who allows a broker-dealer to disclose his name as the owner of record is a:
nonobjecting beneficial owner
In a cash account, the payment date for all securities purchases is _____ business days after the _____ date.
two; settlement
Necessary for the transfer agent to remove the legend from a stock if transfer from a stock if transfer is restricted.
Opinion letter
Who has the authority to remove the restriction or legend on a security.
The transfer agent
What form is used to file year-end audited financial statements with the SEC?
Form 10-K
Account that allows clients to take advantage of leverage through borrowing either cash or securities.
Margin account
A broker-dealer may charge customers for services such as safekeeping of securities and transfer of securities:
as long as the charge is reasonable and does not unfairly discriminate between customers.
An investor purchases a US Treasury bond in the secondary market. When is settlement?
The next business day
