exam 6 Flashcards
Generally, insiders are prohibited from selling short stock in their subject company
What is a way they can short the stock
a short-against-the-box transaction in which the seller owns the shares but cannot make immediate delivery. In this case, the seller must make delivery within 20 days.
Is net capital falling a trigger
No it’s net capital ratios or below 120%
Prospectus Delivery
IPO - Exchange 25 Days
IPO - - not on exchange - 90 Days
NOt an IPO not on an exchange - 40 days
alternative net capital requirement for monthly
in instances where the ratio of aggregate indebtedness to net capital does not exceed 800% AND the free customer credit balances held by the firm do not exceed $1,000,000,
give up agreement
A member may, by agreement, permit another member to report and lock in trades on its behalf. This arrangement requires written documentation and is commonly known as a give-up agreement.
margin minimum equity
2,000
If a registered representative disagrees with information found on BrokerCheck, she should:
File an updated U4
The following products are eligible for portfolio margining.
All margin equity securities
Listed options
Security futures products
Unlisted derivatives
Warrants
Index warrants and related instruments
Corporate Debt is not eligibleLEAPS
LEAPS are a category of options
Who does a BD apply to to become a market maker
First is FINRA
An ADF market participant that experiences three unexcused system outages within a five-business-day period will be
suspended from quoting for all securities in the ADF market for 20 business days.
trf
exchange listed securities
REporting Stopped orders
the client must be told if an order is stopped.
during waiting period when sending a preliminary prespectus you can also send
tombstone
When a broker-dealer sends another broker-dealer a mark to the market, the amount will be based on the:
Relationship of the contract price to the market price
Day trading equity below 25K
Cash transactions only. If call isn’t met cash for 90 day restriction. Closing transactions are cash.
Under the JOBS Act, an emerging growth company (EGC) is defined as having annual revenue of
less than $1 billion during the most recently completed fiscal year
Reporting Period requirements are waived.
statement of beneficial ownership on Schedule 13D
5% or more in ownership of registered securities.
when a stock distribution, by means of a split, dividend or spinoff, is 25%
when is the ex date
the day after the pay date
What form reports insider purchases
Form 4 is filed by any insider of a corporation who buys or sells shares of his company. Form 3 is thin initial insider purchase form additional purchases are on form 4.
Threshhold security
35 consecutive settlement days
Issuer Directed Sales to employees
An exemption also exists for an employee of a member firm whose immediate family member is employed by the issuer that directs the sale of some of its offering to their employees and immediate family members.
The broker-dealer involved in an underwriting could disclose a control relationship to a customer over the telephone or in writing. If the disclosure is made over the telephone, written notice should be made to the customer:
At or before the settlement date of the transaction
Net capital at or below 250K fidelity bond coverage.
A broker-dealer that has a net capital of less than $250,000 must maintain a minimum coverage which is the greater of 120% of the members net capital requirement or $100,000
Foreign Broker Dealer Discount exception
FINRA members may grant a foreign broker-dealer an underwriting discount and this broker-dealer may resell the securities outside the U.S. at the public offering price.
trf
same business dayu
Untruthful Statements
Exception
the seller will not be held liable upon demonstrating that the seller used reasonable care and was not aware of the untruthful statement or omission.
(FOCUS) report, Part IIA is filed:
Quarterly
