Memorization Flashcards by Mason Buran

Premature withdrawals of IRAs are subject to penalty of?

10%

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What age can you start taking IRAs at without incurring penalty?

59.5

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What does Rule 145 apply to?

Mergers and acquisitions (stock splits, dividends)

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When are mutual funds marginable?

30 days post purchase

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What is Regulation A? What is the restriction on amount of selling shareholders?

Exemption for small businesses (?) –> limited to issuance of $75mm in 12 month period

30%

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What is the PSA model used for?

Pricing CMOs

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What are the three NASDAQ Levels?

Highest bid, lowest offer (inside market)
Firm quotes of all market makers in a security
Market makers can change their quotations in the system

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What is Rule 144A? Who can be offered them immediately?

Exempt securities between issuer and investment bank

Can be reoffered to a QIB immediately

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What is a Qualified Institutional Buyer?

Institutional buyer with $100mm of assets

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What is Regulation D?

Exempt transaction where accredited investors can invest

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What is a Group Order?

Order allowing all members to benefit

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If an RR purchases the wrong shares, what happens?

Shares are placed in the broker-dealers error account

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If an RR has seminar with RRs of other firms, what type of communication is this?

Institutional

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When is the ex-dividend date?

1 day prior to the record date

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If you buy a muni in a secondary transaction and then sell it, what happens from a tax perspective?

Its treated as ordinary income vs. if you bought it directly, its capital gains

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When must a 529 plan participant be provided with a statement of the portfolio or fund allocation?

At or before the completion of a transaction

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What issues have a mandatory sinking fund?

Term issues

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Who controls OFAC?

Treasury Department

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If an LP lends money, what are they treated as?

Creditors

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What capacity is reported by a member firm that has conducted net basis?

Principal

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How are non-qualified variable annuities taxed?

Contributions are a return of capital

Excess is ordinary income

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If you purchase an ETF, when can you be extended credit?

Immediately

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Firm is not permitted to accept an exercise notice from a customer for a liquid equity option after?

5:30 PM Eastern Time on Date of expiration

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What is the code of procedure for complaints?

25 days (1st notice)
14 days (2nd notice after receiving copy of complaint and AWC letter)

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What is the statute of limitations for complaints?

6 years

How long does FINRA give to file information related to customer complaints?

30 days

When must a U-5 be filed? What about updates?

30 days | 30 days

How long does it take to need re-qualification?

2 years

What is the time frame for LOIs?

13 months with a 90 day backdate

What is the max 12b-1 fee?

What is the max mutual fund sales charge?

8.5%

What is the max variable annuity charge?

Reasonable

When are dividends taxed?

In the year received

Cost basis if not designated?

FIFO

Cost basis of securities if inherited?

Market value

Cost basis of gifts?

Initial cost or market value (if lower)

What is the Wash Sale?

If you buy substantially the same security, within 30 days the loss will be added to the cost basis

For debt, how is interest income taxed?

Ordinary income

What are taxes are US Government bonds subject to?

Exempt from state, subject to federal

What taxes are municipal bonds subject to?

Exempt from all, except in secondaries to non-state residents

What taxes are US Gov and Agency bonds subject to?

All taxes

What is a qualified variable annuity? What is the tax basis?

Pre-tax payments; zero cost basis which means its fully taxable

What is a non-qualified variable annuity?

Post-tax payments; tax deferred (taxation of earnings above contribution)

If you pull money out of a NQ variable annuity during accumulation period?

LIFO - earnings taxed as ordinary income then contributions on tax-free basis (after-tax)

If you pull money out of a NQ variable annuity during annuity period?

FIFO - contributions taken out first, then taxed as ordinary income for amounts above cost basis

S corp taxation?

Fully pass-through, no corporate tax

What % of limited partnership income is deductible?

20% excluded from tax

What is mutual fund diversification?

75%+ of assets invested <5% of invested assets in 1 company <10% of voting stock of any 1 company

What establishes an institutional account?

>$50mm in assets

What is the max number of non-accredited investors in a Reg D?

How long is shelf registration good for?

3 years

What are the requirements for distributing a prospectus for after-market? 1. Non Listed IPO 2. Non-Listed Follow-On 3. IPO of a security to be exchange listed 4. Exchange listed Follow-on

90 40 25 No requirement

What is a purchaser representative?

Appointed by a non-accredited investor to evaluate the risks and merits of an offering

In Rule 144, what is the max sale allowed for control persons?

1% of the outstanding shares or the average weekly trading volume over the last 4 weeks

What is the difference between Rule 144 and Rule 144A?

Rule 144 deals with control persons | Rule 144A deals with QIBs

What is Rule 147? When are re-sales permitted?

Rule 147 deals with intrastate offerings, has to meet any of the 4 requirements in 1 state: 1. 80% of assets located 2. 80% of revenue generated 3. 80% of proceeds used 4. Majority of employees After 6 months

What is Rule 145?

Deals with M&A, basically issuing equity in a transaction

What is Regulation S? When can it be resold internationally? What about in the US?

US and foreign issuers are exempt from registration in offering securities outside of US if the offer or sale is an offshore transaction Immediately if to another offshore account After 40 days if non-convertible 1 year if they are of non-reporting issuers, 6 months if they are equities of reporting issuers

When do government securities settle?

T+1

When do Municipal, Corporate, and Government Agency bonds settle?

T+2

When do options settle?

T+1

When is mutual fund settlement?

Same day settlement

What is Reg T?

S+2 = T+4

What are the par values of the following? ``` Preferred Corporate Bond Municipal Treasuries Commercial Paper Negotiable Jumbo CDs CMOs ```

``` Pref = $100 Corporate = $1000 Muni = $1000 Treasuries = Multiples of $100 Commercial Paper = $100,000 Negotiable Jumbo CDs = $100k to $1mm CMOs = $1000 ```

How are the following quoted? Corporate Bonds Treasury Notes / Bonds and Agency Securities Munisv

Corp Bonds = 1/8 Treasury Notes = 1/32, % of par Munis = Basis, YTM, % of par

When are account forms sent?

Every 36 months