Greenlight exams Flashcards
What is the account fail to receive for the firm’s
account with no satisfactory offset.
aka: Fail to receive for the firm’s account that
has been resold. This is included in AI.
What is a satisfactory offset
If a trader sold the securities to another firm and created a fail to deliver, or if a firm borrowed shares
while waiting for the shares it had not yet received, these are considered satisfactory offsets and are
exclusions from aggregate indebtedness.
What is the NC requirement for a Municipal brokers broker and what do they do
150,000
Executes for other municipal dealers
May not engage in underwriting or proprietary trading
Acts as an intermediary
What is the NC for mergers and acquisition firms
5,000
What is the NC for mutual fund brokers that operate on a subscription basis
5,000
What is the NC for mutual fund brokers that operate through wire orders
25,000
What brokers have a 50,000 NC
Introducing broker dealer that receives customer securities for immediate delivery to a clearing firm OR
Introducing BD that acts as a selling group member in a firm commitment underwriting
What is the taping rule
Under the Taping Rule, a broker-dealer must use special written procedures and begin the taping of
conversations between its registered personnel and customers for a period of three years.
Member firms that meet the following criteria will be subject to the Taping Rule:
5-9 RR’s with at least 40% from a disciplined firm within the last 3 years
10-19 RR’s with at least 4 RR’s from a disciplined firm within the last 3 years
20 or more RR’s with at least 20% from a disciplined firm within the last 3 years
What must a firm do if it has been notified by FINRA that it’s subject to the taping rule
It has 60 days to establish procedures and begin taping
Must create procedures for reviewing, retaining, classifying records
A report must be sent to FINRA each calendar quarter
How can a firm get an exception from the taping rule
One-time opportunity to reduce its staffing levels below the thresholds and then notify FINRA
Any employees that were terminated for this reduction cannot be re-hired for 180 days
If a firm gives instruction to another firm to return borrowed shares, when must possession be obtained?
In 5 business days
What is the haircut for a best efforts all-or-none offering
Zero
This is a no-risk transaction. The funds are placed in an escrow account
What does a customer ledger itemize?
Customer activities, including purchase and sales, receipt and delivery of securities and all other debits and credits
Who should a report of supervisory procedures be submitted to
The firm’s board of directors and audit committee
