FC CH 6 Flashcards
Those qualified as municipal RRs (Series 52) may sell, trade, or underwrite municipals, but may not ____________ sales.
Those qualified as municipal RRs (Series 52) may sell, trade, or underwrite municipals, but may not supervise sales.
Who enforces the MSRB rules for broker-dealers?
FINRA and the SEC
True or False: A general securities principal may approve the opening of a municipal securities account.
True. Approval may also be provided by a municipal securities principal and a municipal securities sales principal.
What records of a gift must be maintained
The details of the gift as well as both the name of the person making and the person receiving the gift
True or False: No fiduciary responsibility exists between an underwriter and an issuer.
True. The interests of an underwriter are different from an issuer.
Who supervises a firm’s municipal activities and provides account approval, transaction review, and complaint handling?
Municipal Securities Principal (Series 53)
True or False: The manager of a syndicate giving each of its members a gift of $250 would violate the gift rule.
True. The maximum gift is $100 per person/per year and includes gifts between member firms.
Registration status becomes __________ if the Regulatory Element of CE is not completed within the prescribed period.
Registration status becomes inactive if the Regulatory Element of CE is not completed within the prescribed period.
__________________________ expenses are not subject to the Gift Rule.
Entertainment/business expenses are not subject to the Gift Rule.
Is it acceptable for a BD to give two tickets to a Broadway show (valued at $250) to an employee of another BD?
No. It is unacceptable. However, the gift limit would not be violated if the RR attends with the recipient
An RR leaves his firm to join the military. After being discharged, his special inactive status continues for ____ days.
An RR leaves his firm to join the military. After being discharged, his special inactive status continues for 90 days.
What activities may be performed by a municipal securities representative?
Attending syndicate meetings and obtaining quotes from municipal professionals
When must the MSRB notify a municipal dealer that one of its RR needs to complete the regulatory element of CE?
30 days prior to the two-year anniversary of the RR’s initial registration. The RR then has 120 days to complete it.
How many days are representatives given to complete the Regulatory Element of Continuing Education?
120 days from the anniversary date of their initial securities registration
True or False: RRs currently serving in the military can receive a CE waiver.
True
If not registered with a firm during military service, when does an RR’s two-year expiration clock begin counting down?
90 days after military discharge
True or False: A municipal limited placement is not subject to an underwriting assessment.
True
What products may be sold by a municipal securities representative?
Municipal bonds and 529 plans, but NOT municipal bond funds
Is it acceptable for an RR of one BD to take an employee of another BD to an NFL game costing $300 per person?
Yes. If the RR attends with the recipient, it is considered a legitimate entertainment expense.
Mary has been an RR for nine years. When is she next subject to the Regulatory Element of Continuing Education?
In two years, on the 11-year anniversary of her initial registration
Is it a violation of industry rules to give a person tickets to a high school sporting event?
No. This gift is permissible since it is unlikely that the ticket cost will exceed $100.
Jim left the securities industry more than two years ago. Why may he be able to rejoin without requalification?
Jim may have been serving in the military
What relationship is created when a BD receives a fee for giving advice to a municipality regarding a new issue?
Financial Advisory relationship
A municipal limited placement may not be sold to more than ___ sophisticated investors.
A municipal limited placement may not be sold to more than 35 sophisticated investors.
The MSRB regulates ______________, but has no control over the ______________.
The MSRB regulates broker-dealers, but has no control over the municipalities.
According to MSRB rules, who must review and intialize customer complaints?
A Municipal Securities Principal or Municipal Securities Sales Principal
True or False: A copy of MSRB rules must be kept in each location where municipal activities occur.
True
In order to provide research on municipal securities, an individual must hold a Series ___ registration.
In order to provide research on municipal securities, an individual must hold a Series 52 registration.
True or False: Municipal securities representatives may sell municipal bond funds.
False. Municipal representatives may only sell individual municipal bonds.
True or False: A registered person’s Continuing Education requirement is deferred while serving in the military.
True
In order to engage in all types of municipal activities, an individual must hold a Series ___ registration.
In order to engage in all types of municipal activities, an individual must hold a Series 52 registration.
If a registered person joins the military, what is her registration status?
She falls under the special inactive status designation.
True or False: A gift in excess of $100 is permitted if it is recorded on the member firm’s books.
False. All gifts must be recorded and they may not be for more than $100.
True or False: A gift in excess of $100 is allowed if given to a family member employed by another BD.
True. Gifts to family members are excluded from the Gift Limit Rule.
While in the military, an RR has special inactive status. Must he return to the same BD to obtain registration benefits?
No, he may return to his previous BD or go to a new firm.
True or False: A registered person with no disciplinary actions for 15 years is excused from the Regulatory Element.
False. The Regulatory Element of Continuing Education is an ongoing process with no graduation from the plan.
Who must provide written authorization for a discretionary account?
Both the customer and the Municipal Securities Principal
What steps must be taken if a municipal representative receives a complaint?
Forward it to her supervisor. A municipal dealer must also keep the complaint and the firm’s response in its records.
Upon receipt of a written complaint from a client, what must a municipal BD send the client?
The MSRB Investor Brochure
True or False: An associated person may receive non-cash compensation for selling the municipal bond of a specific issuer.
False. Non-cash compensation cannot favor specific products.
True or False: An individual who holds a Series 7 registration may be involved in municipal underwritings.
False. Series 7 registrants are limited representatives and may only engage in purchases and sales with customers.
True or False: Tickets valued at $500 given to four people are considered excessive.
True. The gift limit considers both the dollar value and number of intended recipients.
What is the continuing education (CE) requirement of an RR who is currently serving in the military?
His registration is in Special Inactive Status and the CE requirement is halted.
True or False: All registered personnel of a BD must complete the Regulatory Element of Continuing Education.
True
Is it a violation of industry rules to give a person an $80 gift card?
No. However, this must be the only gift given for the year.
True or False: Taking a client to a weekly event is a violation of the gift rules.
True. Taking a client to an annual event is acceptable, but weekly events are considered too frequent.
Who enforces the MSRB rules for bank dealers?
The Comptroller of the Currency, the FRB, or the FDIC
Series ____ or Series _____ will qualify an individual to sell municipal securities.
Series 7 or Series 52 will qualify an individual to sell municipal securities.
What is the appropriate registration designation to supervise the municipal activity for a BD?
Municipal Securities Principal (Series 53)
True or False: A principal’s written approval must be obtained before the execution of any discretionary orders.
False. A principal’s written approval must be obtained on the trade date, but not in advance of the execution.
The $100 gift limit may be exceeded if the gift is given to a _______________.
The $100 gift limit may be exceeded if the gift is being given to a family member.
Is it a violation of industry rule to give a person a gift basket that is valued at $275?
Yes. However, if the basket was intended for three persons, it is acceptable.
$_____ is the MSRB gift rule limitation.
$100 is the MSRB gift rule limitation (same as FINRA).
