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Series 53 > Fixed income overview part 2 > Flashcards

Fixed income overview part 2 Flashcards

1
Q

Prepaid tuition unit plans

A

sold per unit basis owners purchase units each year that represent a fixed percentage of a years tuition. No limit on the number of units that can be purchased each year

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2
Q

Prepaid Tuition Contract Plans

A

allow a purchaser to buy a contract which covers a specified number of years of tuition. payments may be installments or lump sum and differ based on the age of the future student.

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3
Q

Prepaid tuition and inflation

A

A prepaid tuition plan provides a hedge against inflation.

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4
Q

Prepaid tuition and out of state schools

A

Typically the plan will pay to the out of state school what would have been paid to an in state school.

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5
Q

EGTRA

A

The economic growth and tax relief act of 2001. allows private colleges to issue prepaid tuition plans.

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6
Q

Prepaid tuition plan residence

A

Either the beneficiary or owner can be a state resident. doesn’t require that both be.

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7
Q

529 Plans

Holdings

A

They invest in everything including stocks

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8
Q

529 Plans

Investment risk strategies

A

Many plans offer conservative, moderate and aggressive funds. As the child ages people tend to move from aggressive to moderate. some plans shift automatically

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9
Q

College savings plans contribution limits

A

Most states limit contribution to the cost of providing seven years of post secondary education.

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10
Q

account owner

college savings plans vs. 529 plans

A

The contributor establishing the account is the owner of a 529.
The child is the owner of a college savings plan

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11
Q

529 plans

state residence

A

State residency is not a requirement

funds can be used to attend any state college regardless of the state the 529 plan was opened in.

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12
Q

529 plans

Contributions and taxation

A

some states may offer deductions of contributions.

Federally the contributions are taxed.

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13
Q

529 Plan Contribution types

A

only cash may be contributed to a 529

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14
Q

529 Plans and tuition assistance

A

College savings plans assets don’t reduce financial aid.

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15
Q

529 plan usage

A

While the funds can be used to pay for qualified education expenses they can also be used to purchase prepaid tuition units….

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16
Q

529 plan

treatment of non qualified withdrawals

A

it’s a ratio. The percentage returned as principal is non taxable. The percentage deemed not principal is subject to taxes and a 10% penalty

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17
Q

529 plan 10% penalty waivers

A
  • death
  • disability
  • receipt of a scholarship payment or allowance…..
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18
Q

529 Plan state taxes

Out of state plans

A

earnings from out of state programs are usually taxable..

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19
Q

529 plan room and board

A
  • living at home = the costs are defined as the amount determined by the institution
  • residing in student housing =standard allowance based on most of the schools residents normally charged. If the actual exceeds this calc the actual amount is allowed
  • all other students = those expenses reasonably incurred
20
Q

529 distributions reporting

A

must be sent by 1/31

21
Q

529 plan beneficiary death

A
  • distribution to the deceased bene’s estate
  • distribution to the contributor
  • a new beneficiary that is related to the decedant….
    No exemption from estate taxes if paid to the beneficiaries estate
22
Q

529 plan rollover limits

A

plan to plan rollovers are limited to one per 12 months.

rollovers changing beneficiaries have no limit.

23
Q

coverdell

A

2000 contribution limit, education from k thru secondary.

If not used by age thirty it must be distributed and is subject to penalty…

24
Q

college education tax credit

A

4000

25
Q

Underwriters and official statements

A

the SEC requires an underwriter to review an official statement for offerings of 1 million or more.

26
Q

customer affirmation of independent judgement

A

May affirm orally or in writing on a trade by trade basis.

27
Q

MSRB RULE MAKING

A

sec > FEDERAL REGISTER > DRAFT CIRCULATED > PUBLIC COMMENT > SEC APPROVAL

28
Q

Municipal securities broker annual fee

A

1000 due every october 31.

29
Q

annual municipal adviser fee

A

3,000 for each MA-i and is due april 30th.

30
Q

under writing assessment

A

.0275 per 1000 of par

commercial paper and muni funds are exempt

31
Q

Transaction assessment

A

1 cent per 1000 for sales under rule g-14.

exempts muni funds and securities that mature in less than 9 months.

32
Q

technology fee

A

1 dollar per each inter dealer transactions.

33
Q

fee due date

A

30 days of invoicing

34
Q

Rule making Board make up

A

21 members
four year terms
11 are independent
10 from the industry

35
Q

bank examinatin

A

once every two years by there DEA

36
Q

Finra registered muni securities dealer exam

A

1 every 4 years

37
Q

Requests for information from a DEA

A

15 days

38
Q

BANK DEA’s

A

FRB EXAMINES Federal Reserve banks
FDIC examines National Banks
Office of the comptroller examines= Local Chartered banks.

39
Q

SIPC Membership

A

all broker dealers registered with the SEC must be members

40
Q

SIPC

exemptions

A

banks that deal exclusively with municipal securities
firms that deal exclusively with U.S. Government securities
Firms that deal exclusively in redeemable investment company securities

41
Q

SIPC COVERAGE

A

500k per customer not account no more than 250K in cash

42
Q

SIPC Seperate customer rules

A
  • All accounts on behalf of a deceased person regardless of executor are a single account
  • Each corporate and partnership account is entitled to separate customer status from it’s directors partners and owners
  • trust accounts are separate
    Joint accounts are separate from the joint owners individual accounts
43
Q

SIPC

DOESNT COVER

A

Claims of officers or partners of the failed firm
Claims of other member firms for proprietary accounts
Claims of subordinated Lenders
Claims of Persons who own 5% or more of the equity of the failed firm
SIPC does not cover currencies or futures contracts

44
Q

SIPC LOGO

A

members must display “we are a member of SIPC” With the logo in offices and advertisements

45
Q

Official Statement

Principal approval

A

Not classified as an advertisement so it doesn’t require principal approval

Series 53 (19 decks)

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