Crunch numbers Flashcards
Typically, investment companies are allowed no more than ____ days from request to complete a redemption.
7 days
Mutual funds are required to provide a ___________ report to their shareholders.
semiannual report
When buying securities in a restricted margin account, clients must deposit ___% of the trade within ____ business days.
50%
within 3 business days
What exception allows an underwriting manager to immediately publish research on a company due to a significant event?
Hot News exception
When is a non-branch office inspected?
Periodically
When is settlement for a transaction that’s using a seller’s option settlement?
On a date that’s agreed on by both parties, but not earlier than two business days after the trade date.
If a client’s equity falls below 25%, the maintenance call must be met ____.
Promptly
If securities are in transit and are identified as such, the buy-in will be delayed for ______ calendar days.
seven calendar days.
For SEC purposes, if an insider purchases or sells his stock, what form is filed and when is it filed?
Form 4 must be filed with the SEC within two business days of the trade.
Within what period must any required adjustment be made to a firm’s fidelity bond?
Within 60 days of the anniversary of posting the bond
BDs are required to monitor the status of all fully paid and excess margin securities on a _______ basis.
daily basis
What is a Private Investment in Public Equity (PIPE)?
When a BD acts as a placement agent for restricted securities of an issuer whose securities are already publicly traded.
A net capital adjustment is required for short securities differences remaining unresolved after _______ business days.
seven business days
If a written complaint relates to general securities activities, for how long are the records required to be maintained?
Four years
To be considered a threshold security, excessive fails-to-deliver must occur for ____ consecutive settlement days.
5 consecutive settlement days
When must a BD buy in the securities if a selling client fails to deliver securities?
S+10
What days may telemarketers place calls to prospective clients
Any day of the year!
What type of transaction is being executed when a client purchases securities with payment made by a third party?
Delivery versus payment (DVP) or collect on delivery (COD)
What type of office must approve or reject a variable contract application, by when and by who?
OSJ, principal within 7 bdays
For how long must a prospectus be provided in the after-market for the IPO of a stock to be listed on an exchange?
25 days
For how long must a prospectus be provided in the after-market for a non-exchange IPO?
90 days
Under the TCPA (Telephone Customer Protection Act), an existing relationship exists if a client has engaged in transactions with a firm within ___ months.
18 months.
An RR discovers securities are lost/missing, when must she report this fact to the SIC and transfer agent?
within 3 days - 2 days to search for it and 1 day to report
A trial balance used to calculate net capital is prepared ______.
monthly
If an auditor for a member firm finds a deficiency, when must the BD notify the regulators?
A procedural deficiency is reported within 24 hours of discovery, and a corrective action plan is sent within 48 hours.
FOCUS Report Part I filed by when?
FOCUS Report Part II filed by when?
FOCUS Report Part IIA filed by when?
Carrying BD within 10 bdays of month end - NOT required for Introducing BD
Carrying BD within 17 bdays of qrter end
Introducing BD within 17 bdays of qrter end
A record of all customers’ securities positions, along with profits and losses, must be maintained for _____ years.
6 years
A satisfactory subordinated loan has a minimum maturity of ________.
1 year
What step is required if a fail-to-deliver position has been open for 13 consecutive settlement (business) days?
Mandatory close-out on the morning of the 14th bday
A QIU is a firm that has acted as _______ or __________ in at least _____ similar offerings within the last _____ years.
A QIU is a firm that has acted as manager or comanager in at least three similar offerings within the last three years.
What is considered regular and continuous quoting as defined by the Piggyback Exception?
Over the last 30 days, no more than four business days elapsed without a quote. (regular and continuous quoting)
If a non-transferable asset is sold, the carrying BD has _____ business days to pay the client
5 business days
According to the HSR Act, an M&A deal may not be completed until ____ days after notification.
30 days
Upon making changes to or cancellation of a fidelity bond, the BD must notify FINRA ________.
promptly
Annual Report of Financial Condition is filed with SEC no later than _______ from the date of the financial statement.
60 days
When must the board of directors of the company, subject to a tender offer, advise its shareholders regarding the offer?
Within 10 days from the date the tender is made
Once notified by a Code of Procedure hearing panel, the hearing must be held within ____ days.
28 days
What is the SIC?
Securities Information Center; created to identify and intercept stolen, forged or missing securities
If a transaction is reported at a clearly erroneous price, when will review and action be taken by FINRA?
within 30 minutes
How often must BDs publish reports summarizing their order routing practices?
Quarterly
What time limit exists for issuers/affiliates of actively-traded securities that are repurchasing their own security?
They may not purchase their security within the last 10 minutes of the trading day
The SEC may suspend trading for up to ____ business days for an individual issue.
10 business days
For their customers with free credit balances, BDs must provide notification at least ___________.
quarterly w/ statements
monthly if monthly statements
f a BD’s equity is below ____% or exceeds ___% of its debt-equity total, a violation will occur if not corrected within ____ days.
below 30%
exceeds 70%
90 days
When must a BD notify the authorities if securities are discovered missing due to a quarterly securities count?
Within 10 business days
The SEC may suspend trading on an exchange for up to ____ days.
90 days
To begin using a form of electronic storage (other than CD-ROM), the BD’s DEA requires a ___-days advance notice.
90 days
Letters of Intent may be back-dated for _____ days.
90 days.
If a client requests a copy of the predispute arbitration agreement, when must it be provided?
Within 10 business days of the request
customer must acknowledge receipt on a separate document
Within ___ days of signing the client must receive a copy of the predispute arbitration agreement?
30 days
customer must acknowledge receipt on separate document
When must insiders report their transactions?
Within 2 business days of the trade via form 4
When do CAT reports need to be submitted to FINRA?
On the trading day after the data is recorded
True or False: For a seasoned issuer, a shelf registration becomes effective immediately.
False. A seasoned issuer may use a shelf registration, but it will be subject to SEC staff review.
What uses the ADF?
ECNs use it to display orders rather than the Nasdaq Market Center Execution System
Though acting in good faith, a customer sells securities, but does not deliver. When must the BD close out the trade?
35 days
For restricted stock sold under 144 or
a convertible security that has tendered for conversion, but the underlying security cannot be physically delivered by the settlement date
Letters of Intent are valid for ____ months.
13 months
If a security is recovered after having been reported as lost/missing, when must the SIC be notified?
Within one business day of recovery
BDs are not required to take action if a margin deficiency is less than $______.
$1,000
Who publishes a list of all threshold securities?
SRO (FINRA)
What is the OFAC List?
The Office of Foreign Assets Control of the U.S. Treasury List; it identifies suspected terrorists and criminals
Under portfolio margin rules, margin requests must be satisfied within ______ business days of request.
3 business days
By what date must a _____firm send to the _____firm the list of all reports that it can generate?
clearing firm send to the introducing firm
July 1
For underwriting purposes, a BD is allowed up to _______ temporary subordinated loans over ____ months.
For underwriting purposes, a BD is allowed up to three temporary subordinated loans over 12 months.
Complete this statement: An ad referring to a 6-year-old fund’s ranking based on total return must refer to …
the total return for the one- and five-year periods by the same ranking entity.
What does UTP mean?
Unlisted Trading Privileges, which allows an exchange to trade securities not listed on that exchange.
If an associate requests a copy of his U5, how long does the member firm have to respond?
Response must be made within 2 business days of request.
Generally, how often will a BD calculate the required deposit in its Special Reserve Bank Account?
Weekly
Monthly if 8:1 ratio
To cover a short sale, investors may not use a new stock issue if the short sale occurred within ___ days of the offer.
within 5 days
If a customer changes his address, where and when must notification of the change be sent?
the customer’s old address within 30 days of the change.
According to the Equity IPO Rule, firms must update the eligibility of purchasers ___________ .
annually (called precondition of sale)
How many business days prior to presentation must evidence of incumbency be dated?
60 days
When must clients of a BD receive the firm’s most recent balance sheet?
on request
When is a BD required to report operational difficulties?
within 24 hrs
Notice of a buy-in may not be delivered to the seller sooner than ____ business day after settlement.
one business day
CAT reviews all trading activity in the US for ?
equity and option markets
An issuer with $700 million outstanding voting shares OR issued 1 billion of non-convertible debt within the last
3 yrs would be placed in what category?
WKSI
no bankruptcy
12 months reporting company
When is a firm’s business continuity plan made available to FINRA?
Promptly on request
Short securities differences will have a 100% haircut (reduction) after how many days have elapsed?
28 days
Under the Code of Procedure, a sanction becomes effective ____ days after the firm has received final notice.
30 days
Regulation A requires an issuer to file ____ years of financial statements that may be __________.
2 years
unaudited
How many days advance notice is provided to clients if a BD changes loan terms (e.g., interest rate)?
30 days
Rule 147 offerings may not be sold to an out-of-state investor for ____ months following the last sale of a new issue.
6 months
Illustrations showing returns for variable products must be for a minimum time of ____ year.
one year
How frequently do BDs conduct physical counts of securities in their possession?
Quarterly
FINRA must be notified ____ days prior to the effective date of a satisfactory subordinated loan.
The SEC must be notified ____ days prior to the effective date of a satisfactory subordinated loan.
30 days prior
10 days prior
What happens if a variable contract is sold to a client who then cancels the contract within seven business days?
The selling BD must return its portion of the sales charge.
True or False: Form 211 must be filed by all market makers in Nasdaq securities.
False. Form 211 is required for those initiating quotes in non-exchange (OTC) securities
The ______ is the office providing final approval of retail communication.
OSJ
written complaints and any correspondence connected to the complaint must be reviewed by a ______ and filed at _____ office
principal and an OSJ
In order to engage in passive market making, the managing underwriter must send notice to FINRA by no later than ___ prior to the start of the restricted period.
one day prior to the start
Reg S requires any security offered overseas be sold to _____ purchasers.
Non-US purchasers
Tendering of securities is permitted if an individual is:
Long a convertible security that has NOT been tendered for conversion
Long the stock or long equivalent security
rights, warrants, convertibles
Don’t confuse with marking an order LONG!!
According to industry rules, the maximum sales charge on a separate account variable annuity is:
Not specified, but must be reasonable
What is the exception for a customer’s name being on the order ticket?
Order is entered by an investment adviser or EE of an investment advisory service firm.
A customer is considered a pattern day trader if
four or more DAY TRADES within any five-business-day period (can be less than 5 bdays)
If an associated person is subject to statutory disqualification, his employer is required to update Form U4
within 10 days
A research analyst may not participate in investment banking pitches because:
There is a conflict of interest that could lead to biased communications
If a registered representative is terminated by a firm and then hired by another firm, the new firm has how many days to review the individual’s Form U5?
60 days
Under Regulation SHO, if a broker-dealer has a fail-to-deliver position at a clearing firm in a threshold security that was sold under a Rule 144 exemption, it’s required to close out the position in:
35 consecutive settlement days
Don’t confuse with a customer bringing in Rule 144 securities to his broker-dealer to execute a long sale. In this case, if the restrictions have not been removed in 35 calendar days, the broker-dealer will be required to close out the position.
When do equity trades in a COD account typically settle?
T+1
Broker-dealers that transfer or transmit funds (wire transfers) must collect information about a transfer of ____ or more
$3,000
confirm names and identity of transmitter and recipient
Minimum net capital under the ALTERNATIVE computation is $_____.
$250,000
What does Nasdaq Market Velocity measure?
order activity: quotes, orders, updates, and cancellations.
Forward-looking information or statements may be released ______, including the period during the offering of securities.
at any time
The LOI is typically signed prior to the _______ being filed and is ______. The underwriting agreement is ______ and is signed just before the ________.
registration statement and is non-binding
binding and signed just before the effective date
A member firm may, but is not required to, accept ___ orders and ____ orders for NMS stocks.
stop orders and stop limit orders
What pricing criteria are used when marking-to-the market?
comparison of the contract price to the market price
Reg. A issuers may use what prior to the filing of an offering statement with the SEC?
general solicitation and advertising
History of residency must be reported on Form U4. Employment history must be documented for. Felony convictions are reported ____.
A minimum five-year
a minimum of 10 years
Indefinitely
If a temporary hold has been placed on a customer’s account, the firm must provide notice to the account owner and the trusted contact person within
two business days
A notice sent no later than July 1 each year concerning carrying agreement reports is required to be sent to:
Both the chief executive officer and the chief compliance officer
Reports of a sales on Form D of unregistered securities under Reg D must be made to the SEC within how many days of the first sale?
15 days
BD files a report within _____ of completing an internal investigation for security laws violation.
5 business days
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 _______.
six months (180 days)
25 days
Reg SHO: A broker-dealer that sells an equity security short must deliver the security by _____ or
A BD must purchase or borrow the security by no later than ____ (a long sale allows two additional days, or T+4).
T+1
T + 2
On Nasdaq, MOC orders CANNOT be entered, cancelled, or changed after _____. However, LOC orders may be entered until _____.
3:55 p.m
3:58 p.m
NYSE has the times you already know!
Trial balances that are used to calculate net capital are created _____ by carrying firms.
monthly
A short security difference that’s discovered as the result of a box count is subject to a net capital adjustment in ______.
seven business days
