Chapter 5 - Section 2 - Other Regulations Flashcards
The ______________________ is a bureau within the U.S. Department of the Treasury. Its primary role is to combat financial crimes, such as money laundering and terrorist financing. FinCEN collects and analyzes financial transaction data, supports law enforcement investigations, and collaborates with international organizations to enhance global financial security.
Financial Crimes Enforcement Network (FinCEN)
______ _______________ is the acceptance of large amounts of cash from individuals or businesses where the money is suspected of being used for illegal purposes.
Money Laundering
What are the three stages of money laundering?
- placement
- layering
- integration
Financial firms must file a Currency Transaction Report (CTR) for transactions involving currency (cash) over $_____________ for one person in the aggregate in a single business day.
$10,000
If a person has a financial account in a foreign country that person must report the relationship if the aggregate value of the account exceeds $_____________.
$10,000
Financial firm who transfers funds, including wire fund transfers of $__________ or more, must collect, retain, and record certain information.
$3,000
The money laundering abatement act imposes additional customer identification requirements on financial firms including:
- Verification of Customer Identity within 5 business days
- maintain customer identity records
- check that the customer does not appear on any terrorist list or list of embargoed countries.
Any transaction conducted through a financial firm involving funds or assets of $______ or more is required to file a __________. It must be filed within ___ days.
$5,000, Suspicious Activity Report, 30
Correspondence includes any written (including electronic) communications to ____ or fewer retail investors within any ____ day calendar period.
25; 30
Appropriate qualified principal approval is not required, but all correspondence is subject to supervision and review by the member firm.
True
The term __________ investor includes both prospective and existing clients.
retail
Retail communications include any written (including electronic) communications to more than ____ retail investors within any ____ day calendar day period. This category includes advertisements, sales literature, and most independently prepared reprints.
25; 30
True or False: Appropriately qualified registered principal approval is required before the earlier of its use or filing with FINRA.
True
A ______ ____ is a type of investment company that sells shares of its own stock to investors and then pools those funds together for the purpose of investing those funds in different securities in the pool or portfolio that it will manage.
mutual fund
A _____ ____, often simply called a ____, is a fee or commission charged to an investor when buying or selling shares in a mutual fund.
sales load, load
Paid when you purchase shares, reducing your initial investment.
Font-end load
__ - ____ means that an investor can buy and then later redeem mutual fund shares without having to pay a sales load.
no-load funds. Generally, have an expense ratio of approximately 50 basis points and are allowed to charge 12b-1 fees.
A ___-_ fee is an annual fee charged by some mutual funds to cover marketing and distribution expenses. Named after a section of the Investment Company Act of 1940, this fee is considered an operational expense and is included in the fund’s expense ratio.
12b-1
A ____ _______ requires you to pay for securities in full with the cash available in your account.
cash account
A ______ _______ allows you to borrow money from your broker to buy securities, using the securities in your account as collateral.
margin account
In a margin account, an investor is generally required to deposit ____% of the purchase price when buying stock.
50% (Regulation T)
According to a NASAA Statement of Policy, the margin account documents that require a signature must be signed by a customer promptly _____ the first transaction.
after
What are the 3 agreements required for a margin account?
- the credit agreement
- the hypothecation agreement
- the loan consent agreement
A ____ option gives the buyer the right to purchase 100 shares of the underlying stock at a set exercise prices for a limited period of time.
Call. Call it away from the seller.