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Series 53 > chapter 3 deck two > Flashcards

chapter 3 deck two Flashcards

1
Q

annual review items

A
  1. muni activities 2. supervisory system 3. written supervisory procedures Must determine if they are adequate, up to date and reasonably designed to detect and prevent violations
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2
Q

Principal Designation records retention

A

6 years

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3
Q

Discipline Firm

A

Any firm expelled from membership in an SRO or sec revoked registration

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4
Q

Taping

A

Employees of a disciplined firm hired by another firm may need to be taped

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5
Q

Sec rule 17f-2

A

Fingerprinting

Fingerprints must be sent within 30 days of registration or it will be deemed ineffective.

* books and records

* Supervisors

*handles funds and securities

* sales

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6
Q

Finger printing card

A

black inc

fingers must be rolled

signed by person doing it

FBI can request up to 3 times

Retention is 3 years

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7
Q

u4/u5 retention

A

3 years

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8
Q

associated persons

One off

A

even outside directors or partners who only contribute capital are still associated persons

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9
Q

U5

A

Termination form

IF hired by a new form they are required to review the U5 from the previous firm within 60 days.

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10
Q

Amending U5 after termination

due to new material facts

A

must be updated in 30 days and sent to new employer

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11
Q

series 24

Books and records

A

can supervise books and records maintenance

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12
Q

repurchase agreement

A

loan made to a customer collateralized by an equal value of bonds and the member repurchases the bonds from the customer typically at a fixed higher price.

The difference is considered interest

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13
Q

Repurchase agreement

Securities type

A

must be exempt securities such as US government or municipal bonds

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14
Q

Required for repurchase agreement

A
  1. in writing
  2. exempt securities
  3. specify time and price of repurchase
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15
Q

Sharing in a family members account

approval

A

Still needs approved by a principal.

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16
Q

Form Letter

A

any written or email message sent to 25 or more people in a 90 day period.

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17
Q

Approving Advertising

A

A sales principal or FINOP can’t approved advertising must be approved by a 24 or 53

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18
Q

Exclusions from definition of advertising

A

official statements

Preliminary official statements

A list of bonds for sale.

Summaries or abstracts of official statements are advertising.

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19
Q

Advertising Yields for secondary market securities

A

can’t include current yield unless it has either YTM or YTC also displayed.
If YTM is displayed then the call date and call price must be shown.

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20
Q

Advertising bonds not in inventory

A

Must then state “subject to availability”.

Must also state bonds are subject to change in yield or price.

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21
Q

Publishing initial reoffering prices or yieds

A

Even if price or yield has changed they can advertis these if the date the syndicate bought the securities is included.

In the event prices or yields differ from the initial reoffering the advertisement must sho the price or yields at the time the advertisement is submitted for publication.

A statement that they may not be available or available at a different price or yield must be included.

22
Q

4 main disclosures in all advertisements

A
  1. consider investments objective, risks and charges and expenses
  2. more information is available in the official statement

3Explains broker is an underwriter.

  1. read the official statement before investing
23
Q

Any advertisement that refers to the security or issuer by name must include

A
  1. where to obtain teh official statement unless exempt
  2. for 529 to consider if beneficiaries home state offers any stat tax or olther benefits for only that states funds.
  3. If held out as having MMF characteristics. must say not FDIC insured.
24
Q

Performance data in an advertisement

(disclosure)

A

LEgend disclosing the data represents past performance and does not guarantee futur results.

If the advertiesement includes total return quotation to the most recent month end 7 days before publishing then it must include a phnoe # or website to obtain total return quotations.

25
Q

advertising and sale loads

A

maximum amount of the load or fee must be disclosed. If the load or fee is not reflected in the performance data a statement is included indicating that and data would be lower if a load or fee was included.

26
Q

If the advertisement describes the nature of specific benefits

A

It must also name factors that may materially limit the availability of the benefit. and they must in close proximity to and not less prominent

27
Q

Mail to associated persons

A

A delar has the legal capacity to insist mail to its offices be deemed related to it’s business even if marked to the attention of a particular associated person and can restrict receipt of personal corresponece at the firm.

28
Q

MSRB RUles availability

due to activities

A
  1. Underwriting Trading or selling
  2. financial advisory or consultant services for issuers
  3. Research or investment advice regarding municipals
  4. activities that involve direct or indirect communication with public investors
29
Q

Satisfying rule availability

A

can provide

Soft cover edition

Loose-leaf edition

the website www.msrb.org

Software that contains teh MSRB Rules

30
Q

telemarketing time phrames

A

8.00 am to 9.00 pm local time of the party being called.

31
Q

Business relationship exceptions to telemarketing time frame

A
  1. Person has made a transaction, has positions or had activity in the last 18 months.
  2. The person contacted the broker inquiring about product or services within the last 3 months
  3. borker dealer is the BD of record within the last 18 months.
32
Q

FTC Do not call list

A

Congress requires BD’s to update against the national call list no longer than 31 days.

33
Q

Telemarketing procedures

A

Written policy for do not call list

Training of personell and use of DNC list

Recording and disclosure of Do not Call request, I.e. maintain a list. and must be no later than 30 days.

Identification of sellers and telemarketrs -name of caller, name of BD an address or phone #to contact bd and state the purpose of the call.

Must maintain the number on the DNC list for five years after requested.

34
Q

AML Designated individual

A

Must designate and identify to FINRA throught the FINRA Contact System (FCS) the compliance officer chaged with the firms oversight.

Must notify finra within 30 days of any changes and verify the names annually 17 business days after the end of each calander year

35
Q

Approving an AML program

A

The firms senior management must approve the firms anti-money laundering program and that program must be reviewed annualy by an outside examiner knowledgable in the Bank SEcrece Act and regulatiosn

36
Q

FinCen

A

Financial Crimes Enforcement Network of the department of the treasure

37
Q

FINCEN Form 112

A

Currency Transaction Report CTR

any cash deposits in one day exceeding 10K.

Failure to report can result in 500K fine and up to 20 years in prison.

Filed within 15 calendar days

38
Q

stages of money laundering

A

Placement

Layering

Integration

39
Q

Interdealer Transactions

A

Must report trades with other dealerst to the NSCC. Must include the names of the two executing firms and the amount of accrued interest if known.

if clearing/introducing broker arrangements are used the executign broker (normally the introducing BD) must make the report.

Time of trade is always required

40
Q

For interdealer trades

Reporting parties

A

both sides report

41
Q

assessments

exempt

A

Trades that have a stated final maturity of nine months or less

and

Bonds that at time of trade may be tendered at the option of the holder (put option) for redemption at par at least as frequently as every nine months until maturity.

42
Q

529 issuers

A
43
Q

529 suitability

A
44
Q

529 Contribution types

A

must be in cash

45
Q

Reporting Customer Transaction exceptions

A

no cusip

is a municipal fund security

46
Q

Trade report rules

A

15 minutes of execution

  1. Cusip
  2. Date
  3. Time
  4. executing broker symbol
  5. Buyer or seller
  6. par value
  7. Dollar price excluding commissions
  8. Yield
  9. If the firm acted as Agent or principal
  10. Settlement (if KNown)
  11. capacity

12 commission if any

47
Q

msrb examination is every

A

4 years for finra members

2 years for everyone else

48
Q

Arbitration

A

MSRB no longer administers arbitration. Claims for Arbitration now go thru FINRA.

49
Q

Retail order period

submission requirements

A
  1. If customer meets issuers eligibility criteria for a retail order.
  2. If customer is already conditionally committed
  3. Whether the BD received more than on order that security (matching cusip) i.e. to different maturities for the same serial issue wouldn’t constitute two orders.
  4. Any identifying information required by the issure.
  5. Par amount of the order.
50
Q

Brokers Broker acts on behalf of

A

the Seller unless the seller and buy agreed prior to the transaction in writing

51
Q

ATS

A

automated trade system and must be registered with the SEC. like a brokers broker they can’t maintain accounts.

52
Q

Brokers Broker

commission disclosure

A

must have policies and procedures in place and must prominently post them on it’s webside and provide them in writing annually to sellers and bidders.

Series 53 (19 decks)

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