Chapter 5

Question 1

FINRA typically reviews new member (firm) applications within ________ . If rejected, the applicant may file a written request for review of the membership decision with FINRA’s National Adjudicatory Council within _________

Answer 1

within six months

Within 25 days

Question 2

Form U4 requires a ___________ of employment/bankruptcy and a______ residential history.

Answer 2

10-year record
five-year

Question 3

Being indicted or charged for a crime is not grounds for ________

Answer 3

statutory disqualification

Question 4

Form U4 requires all felony convictions to be recorded ________

Answer 4

regardless of the time that’s elapsed.

Question 5

If FINRA allows a firm to sponsor a statutorily disqualified (SD) individual, the firm is required to institute:

Answer 5

heightened supervisory procedures

Question 6

The heightened supervisory plans should be in _______, acknowledged by the RR in _________, supervised by a designated principal, and be _____ to the nature of concerns and the RR’s activities

Answer 6

writing, writing, tailored

Question 7

If a firm institutes a drug test for its RRs and an RR fails, this is ___________ to FINRA and it’s _______________. Instead, this is a matter between the employee and the firm.

Answer 7

NOT a reportable item
not grounds for statutory disqualification

Question 8

If an associated person’s fingerprint card is ineligible ________ times, the FBI will conduct a _________ based on the associated person’s name (Name Check), rather than on the fingerprints submitted. This is done to verify whether the database contains criminal history record information

Answer 8

three
name search of its database

Question 9

Hard copies of fingerprint cards must be retained for

Answer 9

three years

Question 10

All cashiering and vault personnel of a member firm must be

Answer 10

fingerprinted

Question 11

If foreign nationals or foreign residents are hired by a U.S. brokerage firm, they’re subject to the ______ requirement as U.S. residents

Answer 11

same fingerprint

Question 12

If a foreign national is hired as the CEO of a broker-dealer and this person will have no sales supervisory responsibilities, will not be involved with customers, and will not be involved with the firm’s books and records, she must be added to ________ and is required to be __________. Additionally, she may be
registered via ____________ without being required to take an exam

Answer 12

Form BD
fingerprinted
Page 2 of Form U4

Question 13

An RR who collects or receives a fee for selling variable annuities is not required to register as a

Answer 13

as an investment adviser

Question 14

To offer wrap accounts, an RR who’s qualified with a _____ registration is also required to be registered with a ______ registration

Answer 14

Series 7
Series 65 or 66 (Investment Adviser designation)

Question 15

If an RR serves on the board of directors for a non-profit organization, disclosure is _____. However, the __________ of the RR’s firm may require such disclosure

Answer 15

NOT required
in-house rules

Question 16

If an RR obtains a real estate license, it’s considered an _____________ and must be:

Answer 16

outside business activity
disclosed on Form U4

Question 17

If a current RR is discovered to have a real estate license that was not disclosed on his Form U4, the form must be__________. Additionally, the employing firm could impose

Answer 17

must be updated within 30 days

significant consequences, including heightened supervision, fines, or termination.

Question 18

Form U5 must be retained for _________ after an RR leaves the firm

Answer 18

three years

Question 19

If a registered representative was fired from one firm, but then joins another firm, the new firm must review:

Answer 19

the individual’s Form U5 within 60 days

Question 20

A firm has an ____________obligation to amend a Form U5 (no time limit).

Answer 20

ongoing

Question 21

Form U6 (Uniform Disciplinary Action Reporting Form) is used by ______ to report disciplinary actions against broker-dealers and associated persons (including Code of Procedure and/or Code of Arbitration proceedings)

Answer 21

SROs, regulators, and other jurisdictions

Question 22

Broker Check information can be __________ through a Broker Comment Request Form

Answer 22

amended by an RR

Question 23

BrokerCheck lists a person’s _________ (including outside business activities), other registrations held, and ____________

Answer 23

employment history
disciplinary actions.

Question 24

FINRA members must provide customers with an annual disclosure which contains the FINRA BrokerCheck ______ and FINRA’s _______

Answer 24

hotline
website address.

Question 25

A RR can function as a principal for up to __________ before being required to pass a principal qualification exam. However, before acting as a principal, the RR must have ________________

Answer 25

120 calendar days
18 months of experience within a five-year period

Question 26

The firm’s AML officer is NOT required to be

Answer 26

registered

Question 27

A brokerage firm’s Chief Compliance Officer supervises the sales activities of a _____________ of the firm

Answer 27

managing partner/director

Question 28

The appropriate person to supervise a producing branch manager is a

Answer 28

principal who doesn’t report to the producing manager

Question 29

An associated person of a foreign broker-dealer may visit with U.S. clients if he’s chaperoned by a:

Answer 29

registered person of a U.S. broker-dealer

Question 30

A regional manager is typically allowed to supervise

Answer 30

a branch office manager (BOM)

Question 31

A firm’s AML written procedures are _________ to be filed with a regulator.

Answer 31

NOT required

Question 32

A firm’s AML reports are _________ to be filed with the Department of the Treasury

Answer 32

required

Question 33

If a broker-dealer transmits funds through wire transfers of__________ , it must collect information on the ___________.

Answer 33

$3,000 or more
recipient and the transmitter

Question 34

A single-location firm’s Business Continuity Plan (BCP) should contain contact information for

Answer 34

clearing-firm personnel

Question 35

One of the ___ contact persons included in a firm’s BCP must be a:

Answer 35

two
registered principal (there’s no requirement for them both to be registered principals).

Question 36

___ person is permitted to oversee multiple OSJs; however, this is typically a ______ situation and the reason must be _____ in the firm’s ____

Answer 36

One
temporary
documented in the firm’s WSP

Question 37

An amended ________ must be filed within _____________________

Answer 37

Form BR
30 days of moving a branch location

Question 38

If a bank allows an RR to meet with banking clients on bank premises for one day, the bank is considered an _________. If any clients decide to open accounts with the representative, they’re required to sign a:

Answer 38

office of convenience
disclosure which indicates that investment products are not bank obligations