Chapter 3 Part 3

Question 1

there are two situations in which agents may conduct business with n existing client without being registered in the state

Answer 1

A client is temporarily in a state (e.g., as a student or on vacation), If an agent’s application for registration is pending in a state, the agent may engage in transactions for up to 60 days with an existing client who has moved to that state, provided the Administrator does not deny his application during this period and the following conditions are met: The agent must be eligible to register in the state, The agent’s broker-dealer must be registered in the state, The agent must be registered with a national securities association (e.g., FINRA), The agent must be registered in at least one other state

Question 2

All partners, officers, and directors of a broker-dealer, who are involved in effecting securities transactions, are

Answer 2

automatically registered as agents when the broker-dealer initially registers with the state

Question 3

Canadian broker-dealers and their agents

Answer 3

This section of the law allows broker-dealers and agents that are properly registered in Canada, and that have no place of business in a state, to be exempt from certain provisions of the Uniform Securities Act. However, the antifraud provisions of the USA always apply regardless of a person’s registration status

Question 4

A Canadian broker-dealer may effect transactions with a person from Canada

Answer 4

who is temporarily in a state if there was an existing broker-dealer/client relationship before the person entered the United Slates. The firms arc also permitted to effect transactions with or for a person present in a state whose transactions are in a Canadian, self-directed, tax-advantaged retirement account of which the person is the holder or contributor.

Question 5

NAFTA

Answer 5

eliminated most of the barriers to free trade and investment among the United States, Canada, and Mexico. l lowever, NAfTA did not expand the limited broker-dealer registration to include broker-dealers and agents of Mexico

Question 6

custody

Answer 6

Hold customer cash and/or securities, Inadvertently receive customer cash and/or securities and hold for more than three business days, Accept third-party checks and hold for more than 24 hours

Question 7

Written discretion is required when the broker-dealer determines

Answer 7

Whether to buy or sell, The amount to be bought or sold, What asset is being bought or sold

Question 8

Written discretion is not required when the broker-dealer only determines

Answer 8

the price and/or time of the transaction

Question 9

BD 3 years record keeping

Answer 9

Advertising, Customer Complaints, Order Tickets, Confirmations

Question 10

BD 6 years record keeping

Answer 10

Blotters, General Ledgers, Customer Statements

Question 11

BD life time record keeping

Answer 11

Articles of Incorporation, Partnership Agreements, Stock Certificates Books, Minutes from Board Meetings