FINRA Registration

Question 1

The SRO for the issuance and trading of municipal securities, but not enforcement

Answer 1

Municipal Securities Rulemaking Board (MSRB)

Question 2

The two components that comprise FINRA CE requirements

Answer 2

Regulatory Element and Firm Element

Question 3

Form filed that must be filed to apply for FINRA registration

Answer 3

U-4

Question 4

Form that terminates FINRA registration, filed with FINRA within 30 days of termination

Answer 4

U-5

Question 5

Number of days a firm has to provide written notification of the termination of a representative to FINRA

Answer 5

30 days

Question 6

Maintains registration information and disciplinary history of all registered persons

Answer 6

Central Registration Depository (CRD)

Question 7

Officers, management and supervisory personnel of member firms

Answer 7

Registered Principals

Question 8

Waiting period required before a second attempt on a FINRA qualifications examination

Answer 8

30 days

Question 9

Waiting period required after three unsuccessful attempts on a FINRA qualifications examination

Answer 9

6 months

Question 10

Period of time in which updates, such as change of address, must be filed with CRD

Answer 10

30 days

Question 11

Where the public may check background information of registered representatives and broker-dealers

Answer 11

FINRA Broker Check

Question 12

When a registered representative must complete Regulatory Element Training for the first time

Answer 12

Within 120 days of the 2nd anniversary of registration

Question 13

Required frequency for completion of Regulatory Element Training on an ongoing basis

Answer 13

Every three years

Question 14

Status of persons who have not completed Regulatory Element Training as required

Answer 14

CE Inactive

Question 15

Frequency with which a member firm must complete a needs analysis and develop a written training plan for its firm element training program

Answer 15

Annually

Question 16

Loss or prevention of registration resulting from prohibited activities

Answer 16

Statutory disqualification

Question 17

Sanctions that may be imposed by FINRA when member firms or associated persons violate FINRA rules

Answer 17

Censures, fines, suspensions, expulsions, bars from activity or association with member firms, cease and desist orders (no jail sentences)

Question 18

Persons exempt from fingerprinting requirements

Answer 18

Persons not involved in securities sales, persons who do not handle cash or have access to books

Question 19

blue sky laws

Answer 19

A state’s securities laws.

Question 20

BrokerCheck

Answer 20

An online tool that makes background information on broker-dealers and registered representatives publicly available. This includes information on registration, employment, and disciplinary history.

Question 21

CE inactive

Answer 21

Occurs when a registered individual fails to complete his Regulatory Element continuing education training. At this point, the individual cannot conduct any activity that requires registration until he completes the proper training.

Question 22

Central Registration Depository (CRD)

Answer 22

An online database maintained by FINRA containing information about registered representatives, including employment information and disciplinary history.

Question 23

continuing education

Answer 23

Consists of two mandatory programs, Regulatory Element and Firm Element, that must be completed by securities professionals on an ongoing basis.

Question 24

covered persons

Answer 24

Associated persons of a broker-dealer that are required to complete Firm Element continuing education on an annual basis. This includes all registered persons of the firm as well as any other individuals that have direct contact with public customers.

Question 25

Firm Element

Answer 25

A form of continuing education that must be administered by a broker-dealer and completed by all covered persons on an annual basis. Covered persons include all registered individuals of the firm as well as any other person that has direct contact with public customers.

Question 26

FINRA

Answer 26

A self-regulatory organization that is empowered by and accountable to the SEC. Its main responsibility is to regulate US securities firms and their employees in order to protect investors and maintain fairness in the industry.

Question 27

Form U5

Answer 27

A document filed by a firm to notify its self-regulatory organization that an individual’s registration has been terminated and why. Generally, it must be filed within 30 days of termination, though termination with cause requires filing within 10 days.

Question 28

Form U4

Answer 28

A form that is used by an employee of a firm to register with the appropriate regulator. Candidates for registration must include all pertinent background information, such as their educational background, employment history, residential history, and any disciplinary record. Once an individual becomes registered, this information must be maintained and kept current by the individual.

Question 29

Investment Advisers Act of 1940

Answer 29

A federal legislation that defines and regulates investment advisers.

Question 30

investment adviser representative (IAR)

Answer 30

An employee of an investment advisory firm that

1. provides advice,
2. manages client accounts,
3. solicits new business, or
4. supervises other investment adviser reps.

Question 31

investment adviser (IA)

Answer 31

Any person or firm that provides securities-related advice on a regular basis for compensation. The compensation the investment adviser receives is the management fee, which is typically the largest single expense of any management company.

Question 32

MSRB

Answer 32

A self-regulatory organization that is empowered by and accountable to the SEC. Its main responsibility is to regulate the securities firms and professionals that deal in municipal securities. It’s important to note that the MSRB does not regulate the issuers.

Question 33

parking a registration

Answer 33

A prohibited activity in which a firm sponsors and maintains the registration of an individual who is not employed by the firm

Question 34

registered principal

Answer 34

An associated person of a firm that is involved in the day-to-day management and supervision of the firm’s investment banking or securities business. Most firms require two principals, and in order to become a principal, an employee must have passed the appropriate qualifica-tion exams.

Question 35

Regulatory Element

Answer 35

A form of continuing education that must be completed by registered individ-uals within 120 days of their second anniversary of being registered and every three years thereafter. The program focuses on regulatory and compliance issues and any individuals who fail to complete the training become continuing education inactive, meaning they cannot engage in any business that requires registration.

Question 36

Securities and Exchange Commission (SEC)

Answer 36

A government agency that holds primary responsibility for enforcing federal securities laws and for regulating the securities industry, including the various exchanges. The SEC was created by Congress as part of the Securities Exchange Act of 1934 legislation.

Question 37

self-regulatory organization (SRO)

Answer 37

A regulatory body, such as FINRA or the MSRB, that is empowered by and accountable to the SEC for regulating certain aspects of the securities industry.

Question 38

statutory disqualification

Answer 38

Occurs when an individual has been convicted of a felony or a securities-related misdemeanor in the past 10 years. This prevents that person from associating with a firm unless she receives a waiver from FINRA.

Question 39

wrap account

Answer 39

A special type of account offered by broker-dealers, where a customer pays a single fee for a combination of brokerage services and investment advice. Broker-dealers that offer wrap accounts are required to also be dually registered as investment advisers