Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

STC Cards > Chapter 4 - Documentation > Flashcards

Chapter 4 - Documentation Flashcards

1
Q

True or False: Clients need not sign the account form for a cash account.

A

True, but signature would be required for an option or a margin account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

True or False: Only one person must provide information to open a joint account.

A

False.

Each owner must provide information to option a joint account.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Who may enter orders in a joint account?

A

Any owner named on the account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

For a joint account, how many account numbers and SSNs are used for tax reporting?

A

One

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a TOD account?

A

Transfer on Death.

An account in one person’s name that allows a beneficiary to gain control upon the account holder’s death.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

True or False: Money may be withdrawn from a joint account in one owner’s name.

A

False.

Any checks should be in both parties’ names

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What happens to the deceased’s portion in a joint account with tenants-in-common?

A

The deceased’s portion goes to his estate for tax purposes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What happens to the deceased’s portion in a join account with right of survivorship?

A

Her portion passes to the survivor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Only ______ custodian is allowed per minor’s account.

A

Only one custodian is allowed per minor’s account.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

True or False: Custodial accounts are solely carried in the name of the minor.

A

False. The account is in the custodian’s name for the benefit of the minor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

The ______ is responsible for taxes on income in a custodial account.

A

The minor is responsible for taxes on income in a custodial account.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

When do gifts become the property of the minor in a custodial account?

A

When gifted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

True or False: Gifts made to minors are irrevocable.

A

True.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Is margin permitted in a minor’s account?

A

No, securities must be fully paid.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Custodians have a ________ duty to do what is best for the minor.

A

Custodians have a fiduciary duty to do what is best for the minor.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

May a custodian make speculative investements in a minor’s account.

A

Yes, provided they are suitable based on the objectives.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What age must be attained for the minor to gain control over his account?

A

Age of Majority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

RRs must examine what document to open any corporate account?

A

Corporate Resolution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

True or False: All corporate officers may effect transactions for the corporation.

A

False

Only those named in the Corporate Resolution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Both the _______ and the _______ are required for a corporation to open an options or margin account.

A

Both the Corporate Resolution and the Corporate Charter are required for a corporation to open an options or margin account.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is needed to exercise discretion over a client’s account?

A

Written Power of Attorney

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What three items must be specified on a not held order?

A
  • Action (buy/sell)
  • Amount (quantity)
  • Asset (security)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

True or False: Principals must approve discretionary orders prior to entry.

A

False.

The orders must be approved promptly afterward.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What may an RR do with full discretion, but not with limited discretion?

A

Withdraw money from the account

25
Q

A _______ is required to open an account for a partnership.

A

A Partnership Agreement is required to open an account for a partnership.

26
Q

May a wife enter trades in a husband’s account?

A

Yes, with written third-party authorization.

27
Q

Name some of the different items found on a customer confirmation

A
  • Description
  • Amount
  • Purchase/Sale
  • Execution Price
  • Trade/Settlement Date
  • BD capacity
  • Commission (on agency)
28
Q

__________ protects customers from BD bankruptcy.

A

Securities Investor Protection Corporation (SIPC) protects customers from BD bankruptcy.

29
Q

Does SIPC protect separate customers or separate accounts?

A

Separate customers. A customer with both a cash and margin account with a BD would be covered once.

30
Q

True or False: Jim’s joint account with his wife is considered a separate customer by SIPC

A

True.

E.g. Jim’s cash and margin account are combined for coverage, but Jim’s joint account with his spouse is separate.

31
Q

Customers become _______ if their cash or securities positions exceed SIPC coverage.

A

Customers become general creditors if their cash or securities positions exceed SIPC coverage.

32
Q

If a broker-dealer goes bankrupt, what happens to securities registered in the customer’s name?

A

They are returned to the customer without regard to SIPC limitations

33
Q

Who notifies customers of Broker-Dealer bankruptcy?

A

The trustee handling the liquidation

34
Q

True or False: SIPC provides coverage for both commodities and futures accounts.

A

False

35
Q

What steps are taken if a customer dies?

A

Mark the account “deceased”, cancel open orders, and await instructions.

36
Q

Account statements must be sent to customers at least _______.

A

Account statements must be sent to customers at least quarterly.

37
Q

For active accounts, account statements must be sent ________.

A

For active accounts, account statements must be sent monthly.

38
Q

What triggers a BD’s filing of a Currency Transaction Report (CTR)?

A

Any cash transaction executed by a customer during one day that exceeds $10,000

39
Q

What triggers a BD’s filing of a Suspicious Activity Report (SAR)?

A

Any suspicious transactions of $5,000 or more

40
Q

What triggers a BD’s filing of a Currency and Monetary Instrument Report (CMIR)?

A

When anyone physically transports or receives cash (or equivalents) exceeding $10,000 into, or out of, the U.S.

41
Q

What items are acceptable as proof of identity under the Customer Identification Program (CIP)?

A

Passport or driver’s license (both have a picture)

42
Q

What steps should be taken when an RR executes a trade but uses the wrong account number?

A

Do a cancel and re-bill.

Transfer the trade to the correct account number with permission of a supervising principal

43
Q

Custodial accounts are opened under whose Social Security number?

A

The minor’s

44
Q

True or False: Not held orders may only be executed in a discretionary account.

A

False. Discretionary power of attorney is not required.

45
Q

What program must be established by BDs to verify the identity of each customer opening an account?

A

Customer Identification Program (CIP)

46
Q

What list must be checked to identify suspected terrorists and criminals?

A

OFAC List (Treasury Department’s Office of Foreign Assets Control)

47
Q

True or False: Names appearing on the OFAC List are customers who had a previous business relationship with the firm.

A

False.

The list shows the names of suspected terrorists and criminals.

48
Q

What regulation protects the non-public personal information of customers?

A

Regulation S-P

49
Q

Regulation S-P requires clients be provided with a _________ detailing how BDs handle personal client information.

A

Regulation S-P requires clients be provided with a Privacy Notice detailing how BDs handle personal client information.

50
Q

What will SIPC cover in a customer’s margin account?

A

Only the customer’s equity (securities clear of any outstanding loan)

51
Q

Identify the acronym: CTR

A

Currency Transaction Report

52
Q

SIPC provides coverage of $___ of which no more than $____ can be cash.

A

SIPC provides coverage of $500,000 of which no more than $250,000 can be cash.

53
Q

The _______ must sign the account form

A

The supervising principal must sign the account form.

(clients are not requried to sign)

54
Q

Based on written request, what is the maximum period that a BD may hold customer correspondence?

A

Three months.

To exceed three months, the customer must provide the B/D with a valid reason for the request.

55
Q

Based on written instructions, a B/D may hold customer correspondence for __ months

A

Based on written instructions, a B/D may hold customer correspondence for three months

56
Q

Describe a wrap account.

A

An account that charges the client a single fee that covers transaction execution and account management.

57
Q

Is discretionary authorization required to enter a not held order?

A

No, since descrestion is limited to time and/or price for not held orders

58
Q

For how long may a not held order be maintained?

A

A not held order is considered a day order.

59
Q
A

STC Cards (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions