exam 6

Question 1

Generally, insiders are prohibited from selling short stock in their subject company
What is a way they can short the stock

Answer 1

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.

Question 2

Is net capital falling a trigger

Answer 2

No it’s net capital ratios or below 120%

Question 3

Prospectus Delivery

Answer 3

IPO - Exchange 25 Days
IPO - - not on exchange - 90 Days
NOt an IPO not on an exchange - 40 days

Question 4

alternative net capital requirement for monthly

Answer 4

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,

Question 5

give up agreement

Answer 5

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.

Question 6

margin minimum equity

Answer 6

2,000

Question 7

If a registered representative disagrees with information found on BrokerCheck, she should:

Answer 7

File an updated U4

Question 8

The following products are eligible for portfolio margining.

Answer 8

All margin equity securities
    Listed options
    Security futures products
    Unlisted derivatives
    Warrants
    Index warrants and related instruments 
Corporate Debt is not eligible

Question 9

LEAPS

Answer 9

LEAPS are a category of options

Question 10

Who does a BD apply to to become a market maker

Answer 10

First is FINRA

Question 11

An ADF market participant that experiences three unexcused system outages within a five-business-day period will be

Answer 11

suspended from quoting for all securities in the ADF market for 20 business days.

Question 12

trf

Answer 12

exchange listed securities

Question 13

REporting Stopped orders

Answer 13

the client must be told if an order is stopped.

Question 14

during waiting period when sending a preliminary prespectus you can also send

Answer 14

tombstone

Question 15

When a broker-dealer sends another broker-dealer a mark to the market, the amount will be based on the:

Answer 15

Relationship of the contract price to the market price

Question 16

Day trading equity below 25K

Answer 16

Cash transactions only. If call isn’t met cash for 90 day restriction. Closing transactions are cash.

Question 17

Under the JOBS Act, an emerging growth company (EGC) is defined as having annual revenue of

Answer 17

less than $1 billion during the most recently completed fiscal year
Reporting Period requirements are waived.

Question 18

statement of beneficial ownership on Schedule 13D

Answer 18

5% or more in ownership of registered securities.

Question 19

when a stock distribution, by means of a split, dividend or spinoff, is 25%
when is the ex date

Answer 19

the day after the pay date

Question 20

What form reports insider purchases

Answer 20

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.

Question 21

Threshhold security

Answer 21

35 consecutive settlement days

Question 22

Issuer Directed Sales to employees

Answer 22

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.

Question 23

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:

Answer 23

At or before the settlement date of the transaction

Question 24

Net capital at or below 250K fidelity bond coverage.

Answer 24

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

Question 25

Foreign Broker Dealer Discount exception

Answer 25

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.

Question 26

trf

Answer 26

same business dayu

Question 27

Untruthful Statements

Exception

Answer 27

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.

Question 28

(FOCUS) report, Part IIA is filed:

Answer 28

Quarterly