Crunch Time : Chapter 3 Flashcards
What must happen before unregistered employees of a broker-dealer can accept customer orders?
Their registration must become effective.
Who must confirm a customer order written down by an unregistered employee?
A registered agent.
Who must register as an agent when representing a broker-dealer?
An individual who effects or attempts to effect transactions in securities.
When is an individual not required to register as an agent?
If representing an issuer in exempt transactions or with existing employees, partners, or directors without commission.
Is an agent’s assistant who takes phone messages to buy or sell securities considered an agent?
No.
Is a person who provides quotes required to be registered as an agent?
No.
In how many states must a broker-dealer register if it has an office?
In every state where it has an office.
What must a broker-dealer maintain for three years after ceasing operations?
A surety bond.
What must a broker-dealer that sponsors a wrap program register as?
An investment adviser.
What does custody include?
Holding third-party checks for more than three business days.
Is limited registration granted to broker-dealers and agents from Canada?
Yes.
Is limited registration granted to broker-dealers and agents from Mexico?
No.
What does the Securities Investor Protection Corporation (SIPC) protect customers from?
Insolvency of a broker-dealer.
What must be given to all retail customers who open a new brokerage account?
The Customer Relationship Summary (Form CRS).
For how long must broker-dealer books and records be kept?
For a total of three years.
How long must broker-dealer books and records be kept in an easily accessible location?
For the first two years.
Who files a Consent to Service of Process?
Broker-dealers, agents, investment advisers (IAs), and investment adviser representatives (IARs).
Can agents split commissions with other agents of the same broker-dealer?
Yes, if registered in the same state.
When do state registrations for broker-dealers and their agents expire?
On December 31 each year.
Can an agent transact business with existing clients in another state without being registered?
Yes, temporarily.
What must electronic communication created by a broker-dealer include?
Additional disclosures not included in written communication.
Are advertisements promoting exempt securities required to be filed with the Administrator?
No.
