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Series 52 Group Share > FC CH 7 > Flashcards

FC CH 7 Flashcards

1
Q

What is the consequence of an MFP making an excessive contribution to an issuer official?

A

A two-year ban on negotiated municipal securities business with the issuer

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2
Q

Records of municipal complaints must reflect any actions that have been taken and must be maintained for ___ years.

A

Records of municipal complaints must reflect any actions that have been taken and must be maintained for six years.

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3
Q

True or False: In a principal trade, a municipal dealer must disclose the mark-up on the confirmation.

A

False. A customer’s confirmation is not required to disclose a municipal bond’s mark-up.

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4
Q

What is created when a BD employee has influence over the debt service of an issuer (e.g., an employee is a mayor)?

A

Control relationship

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5
Q

A non-MFP officer has made a political contribution. May the firm engage in municipal business with the issuer?

A

Yes. Business is only prohibited if the contribution is made by the firm, its MFPs, or any PAC controlled by the firm.

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6
Q

A party that fails to complete a trade by settlement is subject to _________ procedures.

A

A party that fails to complete a trade by settlement is subject to close out procedures.

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7
Q

Are duplicate confirms required to be sent for trades executed in accounts of spouses of other member firm employees?

A

Yes, but only if the firm maintaining the account is aware of the spouse’s employment.

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8
Q

True or False: A municipal bond advertisement should disclose whether the bond’s yield is taxable.

A

True. The advertisement should disclose whether it is a net (after-tax) yield.

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9
Q

True or False: An alternative trading system (ATS) which limits access to SMMPs is not required to evaluate each transaction.

A

True

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10
Q

True or False: A MSRB member firm is able to disclose the existence of a control relationship through e-mail.

A

True. Since the MSRB requires the written disclosure of a control relationship, e-mail is an acceptable method.

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11
Q

When must RRs complete the Regulatory Element of Continuing Education?

A

On the 2-year anniversary of their registration and every 3 years thereafter.

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12
Q

Underwriting assessments are charged at a rate of ____% of par value (or $___ per $1,000).

A

Underwriting assessments are charged at a rate of .00275% of par value or ($.0275 per $1,000).

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13
Q

True or False: Only outgoing correspondence is subject to review by a municipal principal.

A

False. Both incoming and outgoing correspondence are subject to review by a municipal principal.

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14
Q

What step must be taken if a municipal advertisement is updated to reflect a bond’s current market price?

A

It must be reapproved by a principal.

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15
Q

When must a syndicate manager provide its members with both a statement of expenses and a summary statement?

A

They must be sent at or prior to final settlement of the syndicate account

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16
Q

True or False: MSRB political contribution rules only address contributions made by MFPs.

A

False. The rules include payments made by BDs, non-MFP executives, and political action committees controlled by BDs.

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17
Q

For municipal registered bonds, what factors determine good delivery?

A

Proper assignment and the bonds denominated from $1,000 to $100,000 in $1,000 increments

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18
Q

True or False: A broker’s broker generally acts on behalf of sellers.

A

True

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19
Q

When must a syndicate member notify the manager of the allocations due from designated orders?

A

Within two business days of delivery of the securities to the syndicate

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20
Q

Is the identity of a customer submitting a group order required to be disclosed?

A

YES

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21
Q

May a firm compensate a consultant for soliciting municipal securities business?

A

No. Nonaffiliated persons may not be compensated for soliciting municipal securities business.

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22
Q

If the high bid is below the trade parameters, when may a broker’s broker effect a transaction?

A

Only when the broker’s broker notifies the seller and receives oral or written permission to effect the transaction

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23
Q

Define a customer complaint.

A

Any written statement (e.g., an email) that alleges a grievance against a municipal dealer or representative

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24
Q

If a member firm’s employee has an outside account, is the employer allowed to restrict trades?

A

Yes. Employers may place restrictions on the trading in outside accounts of their employees.

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25
Q

Written disclosure of a control relationship is normally found on a client’s ____________.

A

Written disclosure of a control relationship is normally found on a client’s confirmation.

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26
Q

When a yield is shown on a municipal advertisement, what must be disclosed?

A

The manner in which it was calculated (i.e., current yield, yield-to-call, or yield-to-maturity)

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27
Q

A form letter is defined as any written or email message distributed to ___ or more persons within a ___-day period.

A

A form letter is defined as any written or email message distributed to 25 or more persons within a 90-day period.

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28
Q

True or False: Disclosure is not needed if a control relationship exists and bonds are placed in discretionary accounts.

A

False. To place those bonds in the client’s account, specific written customer authorization is required.

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29
Q

What is the reporting requirement for trades that are effected at the listed offering price on the first day of trading?

A

They must be reported by the end of the day

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30
Q

List some of the information to be included on a municipal customer confirmation.

A

Description, price and yield (lower of YTM or YTC), BD capacity (commission for agency), trade and settlement dates

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31
Q

Validating or protesting an account transfer request is the responsibility of the ________ firm.

A

Validating or protesting an account transfer request is the responsibility of the carrying firm

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32
Q

Are new CUSIP numbers required if an outstanding bond is purchased, insured, and resold?

A

Yes. The bonds must be distinguishable from the uninsured bonds.

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33
Q

A form letter is considered advertising if it sent to ___ or more persons within a ___-day period.

A

A form letter is considered advertising if it sent to 25 or more persons within a 90-day period.

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34
Q

What is the penalty for political contributions that violate the rule?

A

A two-year ban on obtaining negotiated underwriting business from the issuer

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35
Q

True or False: Political contributions made to defray inaugural expenses may be deemed a violation of the rules.

A

True

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36
Q

Political contribution rules allow MFPs NOT able to vote for a candidate to contribute a max. of $___ (per election).

A

Political contribution rules allow MFPs NOT able to vote for a candidate to contribute a max. of $0 (per election).

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37
Q

For agency transactions, what must be fair and reasonable?

A

The commissions or service charges

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38
Q

The commissions or service charges

A

The temporary holding account for securities pending deposit into an investment trust

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39
Q

On what may an investment company base its decision to execute its trades through a specific member firm?

A

The quality of execution and research services and the availability of securities

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40
Q

For a municipal firm to take action on a complaint, it must be in _______ form.

A

For a municipal firm to take action on a complaint, it must be in written form.

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41
Q

True or False: Suitability rules do not apply when clients makes their own investment decisions.

A

True

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42
Q

A quote given by a B/D that is prepared to immediately effect a trade of a specific quantity is a _________ quote.

A

A quote given by a B/D that is prepared to immediately effect a trade of a specific quantity is a bona fide quote.

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43
Q

True or False: Customers who purchase municipal fund securities must receive an official statement on each purchase.

A

False. If the securities are being periodically purchased under a plan, the B/D may send supplements or amendments.

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44
Q

Who is required to send continuing disclosures for municipal securities?

A

The issuer or other obligated person

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45
Q

If a trade occurs after RTRS closes, it must be reported within ___ minutes of RTRS opening on the next business day.

A

If a trade occurs after RTRS closes, it must be reported within 15 minutes of RTRS opening on the next business day.

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46
Q

For its clients, a municipal securities firm must make every effort to obtain prices that are ____ and ________.

A

For its clients, a municipal securities firm must make every effort to obtain prices that are fair and reasonable.

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47
Q

True or False: All participants in a joint municipal account must publish the same quote.

A

True. Each participant may separately publish a quote, but the quote must be the same for all.

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48
Q

True or False: A payment made by an MFP to offset transition or inaugural expenses is deemed a political contribution.

A

True

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49
Q

True or False: An account for an employee of another firm may not be opened.

A

False. If written notice is provided to the employing firm, the account may be opened.

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50
Q

True or False: Account transfers must be in whole.

A

False. Both full and partial transfers are acceptable.

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51
Q

If a potential conflict of interest exists between an underwriter and an issuer, should it be disclosed?

A

Yes. Disclosure is required at the time the relationship between the underwriter and the issuer originates

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52
Q

True or False: Political contributions made by non-MFP executive officers may trigger a ban.

A

False. Although the contributions will not trigger a ban, they must be reported to the MSRB

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53
Q

Who is the associated person who primarily engages in or supervises municipal securities business?

A

Municipal Finance Professional (MFP)

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54
Q

True or False: Attempting to get a client to stay with the firm is a valid reason to reject an account transfer request.

A

False. A Transfer Initiation Form may not be rejected because the firm wants to keep the client.

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55
Q

True or False: Municipal fund securities are required to have CUSIP numbers.

A

False. Municipal fund securities are exempt from the CUSIP number requirement.

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56
Q

The new issue disclosure period ends ___ days after final delivery of the bonds by the issuer.

A

The new issue disclosure period ends 25 days after final delivery of the bonds by the issuer.

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57
Q

Who is required to notify the MSRB that continuing disclosures will be sent?

A

The underwriter will notify the MSRB and also identify the party that is responsible for sending the disclosures.

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58
Q

Political contribution rules allow MFPs who may vote for a candidate to contribute a maximum of $_____ (per election).

A

Political contribution rules allow MFPs who may vote for a candidate to contribute a maximum of $250 (per election).

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59
Q

When must customer confirmations be sent?

A

By the completion of the transaction (usually the settlement date)

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60
Q

True or False: If two firms form a joint account to sell bonds, they may maintain separate prices.

A

False. The firms must maintain the same price.

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61
Q

An MFP gives an excessive campaign contribution and as a result is fired. Does this eliminate the u/w ban to the firm?

A

No, dismissing employees for violating the political contribution rule does NOT eliminate the 2 year ban on the firm.

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62
Q

What system is used for the submission and/or modification of inter-dealer municipal transactions?

A

The Real-Time Trade Matching (RTTM) system

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63
Q

An account transfer request must be validated or protested within ____ business days.

A

An account transfer request must be validated or protested within one business days.

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64
Q

Is it acceptable for an RR to agree to repurchase a security at its original price if it has fallen in value?

A

No. Since this is considered a guarantee against loss, it is prohibited

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65
Q

Any quote qualified by the terms “subject”, “workout,” or “nominal” is not considered a ______ quote.

A

Any quote qualified by the terms “subject”, “workout” or “nominal: is not considered a firm quote.

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66
Q

RTRS requires firms to report municipal trades within ____ minutes

A

RTRS requires firms to report municipal trades within 15 minutes.

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67
Q

An MFP contributes $100 to a candidate for whom she may vote. Does the contribution violate Rule G-37?

A

No. Only contributions exceeding $250 violate Rule G-37 (the political contribution rule).

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68
Q

May an MSRB firm share in the profits and losses in a client’s account?

A

No. Firms are not permitted to share in client’s accounts.

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69
Q

If a financial advisor prepares the official statement, when must it be made available to the managing underwriter

A

Promptly

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70
Q

Official statements must be sent to customers for no less than ___ days from the end of the underwriting period.

A

Official statements must be sent to customers for no less than 25 days from the end of the underwriting period.

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71
Q

When determining the suitability of a municipal investment, what is the most important factor?

A

The customer’s financial profile

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72
Q

An underwriter must submit the official statement to EMMA within ___ business day of receipt from the issuer.

A

An underwriter must submit the official statement to EMMA within one business day of receipt from the issuer.

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73
Q

When does the new issue disclosure period begin?

A

When the first order is submitted to an underwriter or when the securities are purchased from the issuer

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74
Q

May customers be provided with official statements in electronic form?

A

Yes

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75
Q

True or False: Certain bidders are permitted to receive a “last look” from the broker’s broker to improve their bid.

A

False. “Last looks” or suggestions that a bid should be changed are prohibited.

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76
Q

Advance refunding documents must be submitted to EMMA within ____ business days of securities delivery from the issuer.

A

Advance refunding documents must be submitted to EMMA within five business days of securities delivery from the issuer.

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77
Q

A B/D has a financial advisory relationship with an issuer. May it underwrite the issuer’s bonds on a competitive basis?

A

No. Rule G-23 bans an advisor from acting as an underwriter for the same issuer on a negotiated or competitive basis.

78
Q

Who initiates an account transfer request from a customer?

A

The receiving firm

79
Q

A B/D has a financial advisory relationship with an issuer. May it underwrite the issuer’s bonds on a negotiated basis?

A

No. Rule G-23 bans an advisor from acting as an underwriter for the same issuer on a negotiated or competitive basis.

80
Q

May an investment company select which firm to use to execute its trades based on the number of shares sold by the firm?

A

No. This is a violation of MSRB rules on reciprocal dealings with investment companies.

81
Q

Each business day, the Real-Time Transaction Reporting System (RTRS) is open from ____ a.m. to ____ p.m. ET.

A

Each business day, the Real-Time Transaction Reporting System (RTRS) is open from 7:30 a.m. to 6:30 p.m. ET.

82
Q

True or False: An operations department employee should reject a transfer request if instructed to do so by a manager.

A

False. Transfers may only be rejected for valid reasons such as a mismatched account or invalid signature.

83
Q

True or False: A repurchase agreement is considered a guarantee against loss.

A

False. If the terms are stated in writing or on the confirmation, it is not considered a guarantee against loss.

84
Q

True or False: The dated date must be disclosed on all municipal confirmations.

A

False. The dated date must only be shown for trades effected before the first interest payment date.

85
Q

When must sales credits on orders designated by a customer be paid?

A

Within 10 calendar days following the date the issuer delivers the bonds to the syndicate

86
Q

How often is a G-37 report filed detailing political contributions?

A

If applicable, the report is filed quarterly.

87
Q

Principal transactions are evaluated based on their ________ price.

A

Principal transactions are evaluated based on their aggregate price.

88
Q

For pricing purposes, may the expenses incurred for executing an order for a customer be taken into account?

A

Yes

89
Q

On receipt from the issuer, when must the official statement be submitted to EMMA?

A

Within one business day

90
Q

For a municipal bond to be considered good delivery, is a Legal Opinion mandatory?

A

Yes. A Legal Opinion must be imprinted or attached (unless identified as ex-legal).

91
Q

True or False: Material information is only required to be disclosed when a firm executes a solicited trade.

A

False. Material information must always be disclosed, regardless of whether a trade is solicited or unsolicited.

92
Q

What should be disclosed on an advertisement for a bond with a 4% coupon that is priced to yield 5.5%?

A

That the bond is trading at a discount, that it may be taxable, and that the 5.5% yield is a gross yield-to-maturity

93
Q

True or False: Advertising requires approval from a supervisor.

A

True. However, material that is considered correspondence does not require approval.

94
Q

What information must be obtained by an MSRB member before opening an account for a noninstitutional customer?

A

The client’s financial status, tax status, investment objectives, and any other relevant information

95
Q

Is an official statement or preliminary official statement considered retail communication?

A

No. However, a summary or abstract of an official statement is considered retail communication.

96
Q

When will a cash trade for a municipal bond settle?

A

Same day

97
Q

True or False: E-mail that is sent to 24 persons is considered advertising.

A

False. Communication that is sent to fewer than 25 persons is considered correspondence, not advertising.

98
Q

Who applies for the CUSIP number?

A

If there is a syndicate, the managing underwriter; however, if there is no syndicate, each dealer underwriting the new issue.

99
Q

True or False: A B/D that is subject to a two-year ban on negotiated deals may still bid for a competitive underwriting.

A

True. A firm that violates the political contribution limit is still able to submit bids for competitive underwritings.

100
Q

RTRS transmits data from ____ a.m. to ____ p.m. ET.

A

RTRS transmits data from 7:00 a.m. to 8:00 p.m. ET.

101
Q

True or False: Transaction fees may be collected when one firm reports trades for another firm.

A

True

102
Q

True or False: Accrued interest is reported to RTTM.

A

True. Trade information such as accrued interest, concessions, dollar amount, and yield must be reported to RTTM.

103
Q

During the retail order period, the determination of what constitutes a retail order is made by the ______.

A

the issuer.

104
Q

______________ is the return of municipal bonds that were originally accepted for delivery.

A

Reclamation is the return of municipal bonds that were originally accepted for delivery.

105
Q

For what types of investors are zero coupon municipal securities considered to be most suitable?

A

For investors interested in receiving a fixed amount in the future, but not anticipating a current stream of income

106
Q

True or False: A notice must be provided to EMMA if an official statement is not being prepared.

A

True

107
Q

Regarding outgoing correspondence, whose names must be recorded?

A

The name of the person who prepared the correspondence and the name of the person who reviewed it

108
Q

True or False: Regarding prices and commissions, MSRB rules apply to both principal and agency trades.

A

True. Though different factors may apply, the pricing for principal and agency trades must be fair and reasonable.

109
Q

List some acceptable reasons for protesting an account transfer.

A

The account is flat with no assets, invalid signature or account number, additional documentation required, no SS number

110
Q

What is considered the most significant benefit of investing in municipal bonds?

A

Tax exempt interest

111
Q

True or False: A municipal registered representative who solicits underwriting business is considered an MFP.

A

True

112
Q

Where and when does a broker’s broker disclose the deadlines and parameters for bid-wanteds?

A

Details are displayed on the website of the broker’s broker and disclosed annually to sellers and bidders

113
Q

True or False: A broker’s broker may provide the winning bidder with information on all of the bids obtained.

A

False. The winning bidder may only be notified that its bid was the winning bid.

114
Q

When must information be submitted to the SHORT system?

A

No later than 6:30 p.m. ET on the business day of the auction (for ARSs) or the date the rate is reset (for VRDOs)

115
Q

Delivery versus payment (DVP) is normally used when a client _________ securities using a bank as the intermediary.

A

Delivery versus payment (DVP) is normally used when a client purchases securities using a bank as the intermediary.

116
Q

True or False: A municipal registered representative who sells bonds to retail clients is considered an MFP.

A

False

117
Q

With respect to the same issuer, may a financial advisor also act as a successor remarketing agent?

A

Yes, but only if the advisory relationship is terminated at least one year prior to being selected as remarketing agent.

118
Q

If no final official statement is being prepared, what must be sent to a customer?

A

A notice that no official statement has been prepared as well as a copy of the preliminary official statement

119
Q

When are B/Ds required to send customers a final official statement or a notice that one will not be sent?

A

No later than the settlement date of the transaction

120
Q

To whom should a broker’s broker send bid-wanteds?

A

To the issuer of the security and any prior known bidders

121
Q

True or False: A valid reason for rejecting a transfer request includes the fact that the account is the firm’s largest.

A

False. The account being the firm’s largest is not a valid reason for protesting.

122
Q

Define a form letter.

A

A written letter or e-mail distributed to 25 or more persons within a 90-day period

123
Q

For trades executed in the accounts of employees of other member firms, to whom will confirmations be sent?

A

To both the employee and the employing firm

124
Q

If a BD wants to sell municipal bonds and have significant exposure to different bids, who should it contact?

A

A Broker’s Broker

125
Q

True or False: Official statements may only be delivered in physical form (i.e., not in electronic form).

A

False. Official statements may be delivered in either physical or electronic form, or through a hyperlink to EMMA.

126
Q

True or False: Employers may place restrictions on employee accounts opened to purchase only municipal fund securities.

A

False. These accounts are exempt from the restrictions identified in MSRB Rule G-28.

127
Q

How does G-37 treat a check signed by an MFP from a joint account and submitted as a contribution to an issuer official?

A

G-37 considers the full contribution to have been made by the MFP.

128
Q

Through what system are official statements and continuing disclosures normally submitted?

A

Through the Electronic Municipal Market Access (EMMA) system

129
Q

After a transfer request has been validated, the MSRB requires the transfer to be completed within ____ business days.

A

After a transfer request has been validated, the MSRB requires the transfer to be completed within three business days.

130
Q

If an MFP makes the maximum contribution to a losing candidate, may she make a contribution to defray expenses?

A

Yes. MFPs are NOT subject to contribution limits to defray expenses.

131
Q

True or False: BDs may open accounts for employees of another BD if the employer’s prior written permission is received.

A

False. The BD opening the account must notify the employing firm in writing. Written permission is not required.

132
Q

If an outstanding bond changes its debt service payments, are new CUSIP numbers required?

A

Yes, because it is no longer identical to the original issue.

133
Q

When will a repurchase agreement not be considered a guarantee against a loss?

A

When the agreement is in written form on or with the confirmation of the transaction

134
Q

If a quote is given solely for informational purposes, it is referred to as a _________ quote.

A

If a quote given solely for informational purposes, it is referred to as a nominal quote.

135
Q

For municipal bearer bonds, what factors determine good delivery?

A

All unpaid coupons attached and the bonds denominated in $1,000 or $5,000 increments

136
Q

If a BD hires a person in an MFP capacity, what is the look-back period for identifying prior political contributions?

A

Two years

137
Q

If a control relationship exists between a B/D and issuer, may the bonds be placed in a client’s discretionary account?

A

Only if the client provides specific written consent

138
Q

Are BDs who violate the political contribution rule banned from obtaining competitive underwriting deals from issuers?

A

No, since the deal is obtained on the merits of the bid.

139
Q

If erroneous information is reported through RTTM, when must it be changed or amended?

A

Promptly by the participants who report the data

140
Q

True or False: An RR may not enter into a joint account with a customer.

A

False. A joint account is permitted if the client and firm provide approval and the sharing is proportionate.

141
Q

True or False: Transactions in municipal fund securities must be reported to RTRS.

A

False. Transactions in municipal fund securities are exempt from RTRS reporting.

142
Q

____________ is the buyer’s refusal to accept the delivery of municipal bonds.

A

Rejection is the buyer’s refusal to accept the delivery of municipal bonds.

143
Q

True or False: According to MSRB rules, obtaining information regarding the beneficiary of a 529 plan is required.

A

True. Obtaining the beneficiary’s age and the number of years until the funds are needed are considered relevant.

144
Q

Define CUSIP number.

A

The identifying number assigned to each maturity of an issue

145
Q

A municipal firm considering hiring an MFP would look at contributions he had given in the last ___ years .

A

A municipal firm considering hiring an MFP would look at contributions they had given in the last 2 years.

146
Q

If an MFP of an MSRB member firm makes an excess political contribution, what is the consequence?

A

The employing firm is prohibited from participating in negotiated underwritings with the issuer for two years.

147
Q

Without approval from the seller, when may a broker’s broker contact the bidder to see if the bid was submitted in error?

A

If the high bid is above or below the trade parameters

148
Q

Define related portfolio.

A

An account that is controlled by a municipal securities dealer

149
Q

If a firm uses another firm to report transactions to RTRS, which firm is responsible for timely and accurate reporting?

A

The firm that executed the order

150
Q

True or False: RTRS transmits data only during the hours that it is open.

A

False. RTRS sends data from 7:00 a.m. until 8:00 p.m. (i.e., 30 minutes before it opens, and 90 minutes after it closes).

151
Q

How many bids are required to be obtained by broker’s brokers?

A

There is no provision that exists requiring a broker’s broker to obtain a fixed number of bids.

152
Q

True or False: The fact that a municipal bond is subject to the AMT is not required to be disclosed on a confirmation.

A

False. Confirmations must disclose whether a bond is subject to the AMT.

153
Q

True or False: A seller may receive information on all the bids that have been received by a broker’s broker.

A

True

154
Q

With respect to the same issuer, may a financial advisor also act as a remarketing agent?

A

No. Rule G-23 generally prohibits this activity.

155
Q

If three customers who purchase municipal bonds share the same address, how many official statements must be sent?

A

If the customers provide consent or if they are members of the same family, only one is required.

156
Q

Is it a violation for a dealer to publish quotes for a municipal bond that it does not own?

A

No. A quote may be published provided the dealer is prepared to honor the quoted price and quantity.

157
Q

May an MFP solicit political contributions from the associates of his firm?

A

No. Solicitations of any amount, even those less than $250, are considered a violation.

158
Q

If an official statement is not sent to the MSRB, it must be made available to customers for not less than ___ days.

A

If an official statement is not sent to the MSRB, it must be made available to customers for not less than 90 days.

159
Q

The transaction assessment charged by the MSRB is equal to ____% of par (or $___ per $1,000).

A

The transaction assessment charged by the MSRB is equal to .001% of par (or $.01 per $1,000).

160
Q

What is required for an RR and a client to share in the client’s account?

A

The firm must provide approval and the sharing in gains and losses must be proportionate to the investment of each party

161
Q

In what form must official statements and advance refunding documents be submitted to EMMA?

A

In electronic form

162
Q

Once a transfer request is received, may the carrying BD continue to effect transactions in the account?

A

No. Once a transfer request is received, the account is frozen.

163
Q

Who is responsible for the transaction fee when one dealer is reporting trades for another dealer?

A

The reporting dealer is responsible for the fee.

164
Q

If a BD has a control relationship with an issuer, what’s needed to place the bonds in a client’s discretionary account?

A

The client’s specific consent must be obtained before the bonds may be placed in the account.

165
Q

If a control relationship exists, how may the relationship be disclosed?

A

Orally, before a trade, and then in writing, at or before settlement

166
Q

For an agency transaction involving a bond, what is disclosed on a customer confirmation?

A

The total commission amount and the yield on the bond after commission is paid

167
Q

What is an MFP?

A

Municipal Finance Professional (those subject to political contribution rules)

168
Q

When quoting a security, may a dealer consider the anticipated direction of the market?

A

Yes. The dealer may also consider the availability of the security and its overall inventory position.

169
Q

A political contribution is made by the spouse of an MFP of a municipal securities BD. Is this covered under Rule G-37?

A

No. Provided the contribution was not directed by the MFP, it is not covered under Rule G-37

170
Q

The Short-Term Obligation Rate Transparency (SHORT) system receives information for what types of securities?

A

Variable rate demand obligations (VRDOs) and auction rate securities (ARSs)

171
Q

What must a firm do if it publishes an advertisement for a 529 plan?

A

The firm must identify itself as an underwriter for the plan and provide official statements to purchasers.

172
Q

As it relates to an underwriting agreement, define: retail order period.

A

The stipulated time during which retail orders for new issues will be accepted.

173
Q

What type of customer may a dealer assume is capable of making its own municipal decisions?

A

A sophisticated municipal market professional (SMMP)

174
Q

The purchase confirmation for a zero coupon bond must show an interest rate of _____.

A

The purchase confirmation for a zero coupon bond must show an interest rate of zero.

175
Q

Is a municipal securities BD allowed to use an issuer’s confidential information obtained in a fiduciary capacity?

A

Only with the consent of the issuer

176
Q

What is a remarketing agent?

A

A firm that is responsible for reselling municipal securities being offered by their owners to new customers

177
Q

Material facts must be disclosed to clients either ______ or __________ at or prior to the trade.

A

Material facts must be disclosed to clients either orally or in writing or prior to the trade.

178
Q

True or False: Bonds delivered without a legal opinion are acceptable if they are identified as ex-legal.

A

True

179
Q

If an issuer applies for a CUSIP number, is an underwriter also required to apply?

A

No

180
Q

If a customer requests a print copy of the official statement, how and when must it be sent?

A

It must be sent by first class mail within one business day of request

181
Q

Underwriting assessments must be paid to the MSRB within ___________ days of receiving the invoice.

A

Underwriting assessments must be paid to the MSRB within 30 calendar days of receiving the invoice.

182
Q

True or False: Customer correspondence is subject to approval by a principal.

A

False. Although correspondence is not required to be approved, it is subject to review.

183
Q

Is a financial advisor permitted to deliver an official statement to the managing underwriter in electronic form?

A

Yes

184
Q

How often is Form G37 filed with the MSRB?

A

Quarterly to list all political contributions

185
Q

True or False: A bid-wanted must have a deadline.

A

True. It may be precise or be an “around time” deadline.

186
Q

True or False: Transaction assessments are charged on both inter-dealer and customer sales.

A

True

187
Q

True or False: A municipal security that has no CUSIP number must be reported to RTRS.

A

False. Securities without CUSIP numbers are not required to be reported to RTRS.

188
Q

When merely acting as an order taker, is a dealer required to disclose material information?

A

Yes. The MSRB’s Fair Dealing Rule states that dealers should disclose material information in all cases.

189
Q

In order to qualify as an SMMP, the customer must be _____________.

A

In order to qualify as an SMMP, the customer must be institutional.

190
Q

When is an MSRB member firm required to disclose the existence of a control relationship?

A

The relationship must be disclosed in writing at or before the completion of a transaction.

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