Chapter 3 - Customer Trade Confirmations (FINRA RULE 2232)

Question 1

FINRA Rule 2232 requires its members to give or send a confirmation to customers by ?

Answer 1

at or before the completion of any transaction and to be in compliance with SEC Rule 10b-10.

Question 2

T/F - Trade confirm must include whether the member acted as agent or principal

Answer 2

T

Question 3

T/F - Trade confirm must include whether the member acted as dual agent

Answer 3

True

Question 4

T/F - Trade confirm must include markup or markdown in a principal trade of a listed security

Answer 4

True

Question 5

T/F - Trade confirm must include payment for order flow

Answer 5

True

Question 6

T/F - Trade confirm must include If the member is a market maker in the security

Answer 6

True

Question 7

T/F - Trade confirm must include if a control relationship exists between the issuer and the member

Answer 7

True

Question 8

The customer trade confirm of a debt security traded on the basis of a dollar price must include :

Answer 8

The dollar price at which the transaction was effected, and the yield to maturity calculated from that dollar price.

Question 9

The customer trade confirm of a debt security effected on the basis of yield , the confirmation must show :

Answer 9

The yield at which the transaction was effected, including the percentage amount and its either current yield, yield to maturity, or yield to call.

Question 10

With respect to an NMS stock, FINRA requires that the confirm include the following:

Answer 10

settlement date and, where applicable, the fact that a security is a callable equity security.

Lastly, that the customer may contact the member firm for additional information about the security must be found on the customer confirmation.

Question 11

SEC Rule 10b-10 requires that confirmations for DVP/RVP trades be delivered to customers :

Answer 11

no later that T+1.

Question 12

Confirms for CMOs must include

Answer 12

There is no requirement to disclose yield on a trade confirmation for CMOs. If the broker-dealer chooses to do so, additional information would be required. However, the nominal face amount and interest rate, the maturity date, and the settlement date along with the weighted average coupon (WAC) should be included on CMO confirms.

Question 13

Does the SEC require that a confirm include whether it was solicited or un-solicited ?

Answer 13

No