Q&A7 Flashcards
Sell-out
If buying BD fails to pay for / accept securities that have been delivered by SD, selling BD may initiate sell-out when? Notice req’d?
immediately without advance notice - and may charge buying BD with any loss incurred; must notify buying BD same-day
Portfolio margin
Following permitted to engage:
1. ___ registered with SEC.
- Member of a ___ to extent that listed index options, unlisted derivs, ETF options, index warrants, or underlying instruments hedge member’s ___.
- Any person approved to engage in ___. If customer wants to trade unlisted derivs, customer must maintain equity of at least $__.
- Broker or dealer
- national futures exchange….index futures
- uncovered option contracts….$5mm
Step-out
Used by BDs that have previously executed a trade to ___ all/part of the trade to another BD for ___ purposes.
Executing BD may step out by submitting a ___ report to TRF.
allocate….clearing
clearing-only report
Buy-in
May not be initiated by buyer until ___.
If seller receives buy-in notice and notifies buyer that securities are in transit, buyer must wait ___ before executing buy-in.
SD+3 (TD+6)
7 calendar days
Reserve requirement
BD whose ratio of AI:NC does not exceed 800% (8x) and that carries < $1mm of customer funds may compute the reserve requirement of Rule 15c3-3 how often?
monthly
Haircut
___% on readily marketable securities.
___% on limited market securities (less than three MMs providing quotes).
15%
40%
Non-branch office
Also referred to as ____.
Effects less than ___ securities trades per year.
non-securities business office
25
Form FD
Must be filed when for:
1. Intentional disclosure of mnpi?
- Unintentional disclosure of mnpi?
- simultaneously
2. w/in 24 hours
Chat rooms / online forums
- Considered retail ___.
- Subject to principal pre-approval or FINRA filing?
- What about any scripts, slides, handouts, other written / electronic materials used in connection with appearance?
- communications
- No (considered spontaneous public appearance)
- Yes
Take private
What is required filing for public co going private?
Schedule 13E-3
Wire transfers
BDs must collect info about transfers >= $___.
Must collect / verify identity of ___ and ___.
$3k
transmitter and recipient
Securities counts
BD must make a physical examination and count of all securities in its possession at least [how often], but not less than __ months nor more than __ months following previous count.
Ex: If conducted on Jan 15, next count cannot be made before __ or after __.
May be conducted by employees who are directly responsible for handling securities IF count supervised by someone whose regular duties ___.
quarterly, but not less than 2 months or more than 4 months following previous count
not before March 15 or after May 15
do NOT involve such responsibilities
Hearing Panel
Under Code of Procedure, the hearing panel must notify the subject of a complaint at least ___ days prior to the hearing.
28 days
EGCs
An emerging growth company (EGC) is one with annual revenue of less than $__ in most recent fiscal year.
If EGC undergoes IPO, do quiet periods on research analysts apply?
Can analyst attend an IPO pitch?
$1 billion
No, analysts can begin publishing on day of the IPO.
Yes, but can’t solicit IB biz and IBD personnel must also attend
Mutual fund discounts
Apart from breakpoints, mutual fund companies may only offer a discount or reduced sales charge to ___.
Employees of the mutual fund co
Forms 3, 4, 5 vs. Sched 13D
- ___ filed by any insider who buys/sells shares of his co.
- ___ filed when person becomes insider initially.
- ___ is an annual filing by insiders.
- ___ is used to report acquisitions of > 5% of the equity of a co.
- Form 4
- Form 3
- Form 5
- Schedule 13D
ADF
Quoting alternative to ___ and not displayed there.
Open from ___ to ___.
NMCES
8am to 6:30pm
Stop orders / stop limit orders
Are BDs req’d to accept either / both for NMS stocks?
No, not req’d for either.
Ex-dividend date
Who receives dividend when trade executed:
- Before?
- On / after?
- Buyer
2. Owner (seller / lender)
Rule 147
A corporation purchasing a Rule 147 offering MUST have its ___ in the state to be considered a resident.
Also, __% or more of assets must be located in / gross revenues derived from / sales proceeds from new issue used in the state.
principal office / headquarters
80%
Events - disclosure to FINRA
All stock or cash dividends, rights offering, reverse split must be disclosed to FINRA ___ days before ___ date.
10 days before RECORD date
Syndicate settlement
Syndicate SD occurs when issuer delivers (new issue) securities to the account of the underwriting syndicate.
Syndicate manager must settle syndicate accounts no later than __ days after this SD.
90 days
Subordinated loan
May qualify as part of BD’s net capital if loan has MINIMUM duration of ___.
Loan may be in form of ___ or ___.
Must be filed with ___ at least ___ days before effective date.
1 year
cash or securities
SEC…10 days
Minor violations of FINRA rules
Max fine = $___
$2,500
Notice to SEC + DEA
Immediately required if:
- AI:NC > __
- $ amt of __ < min req
- BD’s ___ > 70% of its debt/equity total for > 90 days
Required w/in 24 hrs if:
- NC < ___% min req
- AI:NC > __
- Other ____ discovered
- 1,500% (15x)
- NC
- subordinated loans
- 120%
- 1,200% (12x)
- material inadequacies
Prospectus delivery
Required for how long following an IPO of securities:
- Listed?
- Not listed?
- 25 days
2. 90 days
Short securities deduction
Member must begin to deduct from its NC any unresolved short security difference that has existed for more than ___ days.
7 biz days
Anti-dilution
Restricted person purchasing shares in equity IPO to prevent dilution must have held interest for at least ___ prior to effective date and agree not to sell / pledge / transfer shares for ___.
1 year….3 months
