Regulations 10% Flashcards
0
Q
FINRA bylaws
A
- Uniform Practice Code (UPC) relates to dealings between member firms, covering all transactions in nonexempt securities while providing orderly completion of dealer to dealer transactions
- Conduct Rules - relate to a member firm’s dealings with the public
- Code of Procedure - outlines the procedural process in the event of violations and complaints
- Code of Arbitration - is concerned with settling disputes between dealers or brokers and the public
1
Q
SEC
A
- responsible for supervision of the capital markets
- writes laws that govern financial markets
- can enforce laws
- President appoints SEC board for term of years
2
Q
Security Exchange act of 1934
A
established to regulate the trading of securities after they have been issued (secondary market) and to regulate exchanges and B/D
3
Q
UPC
A
-addresses how b/d interact with each other and associated persons
4
Q
Which persons must be registered as principals?
A
- those who are actively engaged in the management of the member’s securities business, including supervision, solicitation of the training of persons associated with the member.
1. sole proprietors
2. officers
3. partner
4. managers of offices of supervisory jurisdiction; and
5. Directors of corporations
5
Q
Limited Principal
A
- Limited to shares of open-end investment companies, closed end investment companies during the IPO only, and variable contracts
- take the series 26 - investment company and variable products qualification exam
6
Q
When must the regulatory element be completed?
A
- on the second anniversary date of their original registration, and every 3 years thereafter.
- they have 120 days from registration date for completion
7
Q
Firm element
A
- continuing and current eduction
- at least annually
8
Q
U5
A
- Uniform termination notice of securities registration
- written notice of termination
- must be provided within 30 days of termination
- still liable for 2 years following termination
9
Q
disqualification
A
- b/d who have been suspended or expelled from a registered national securities association or national securities exchange
- b/d who have been barred or suspended for conduct inconsistent with just and equitable trade practices
- b/d enjoined by a court from engaging as investment advisers, underwriters, brokers, dealers, or in any capacity in connection with the securities business
10
Q
Correspondence
A
- written or email messages distributed to either existing customer’s or to fewer than 25 prospective customers within any 30 calendar day period
- does not need to be approved
11
Q
How long must retail communications be kept on file
A
3 years, along with the name of the preparing person and approving person
12
Q
Institutional sales material
A
- gov entity or subdivision
- employee benefit plan with at least 100 participants
- qualified plan with at least 100 participants
- FINRA member, registered associated person or person acting solely on the behalf of any such institutional investor
- must be maintained for 3 years and approved by the principal
13
Q
Private securities transaction
A
- defined as transactions effected outside the normal business of an associated person’s employment with a member firm
- prohibited
- known as selling away
- new offerings of securities that are not reg with SEC
14
Q
Private transactions
A
- must provide written notice for approval;
- the proposed transaction
- the person’s proposed role; and
- compensation conditions
