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Series 79 > Regulations > Flashcards

Regulations Flashcards

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Series 79 Top-Off Exam flashcards
1
Q

OCC

A

Office of the Comptroller of the Currency

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2
Q

Who did the Securities Act of 1934 grant authority to extend credit in the securities industry?

A

The Securities Act of 1934 gave the authority to the Federal Reserve Board (FRB) to regulate the extension of credit by broker dealers for the purchase of securities by their customers. The following is a list of the regulations of the different lenders and the regulation that gave the FRB the authority to govern their activities: Regulation T broker dealers Regulation U banks Regulation G All other financial institutions

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3
Q

OTC Bulletin Board

A

quotes need to be firm, OTCBB quoted companies need to file financials with SEC and must have at least one market maker.

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4
Q

Regulation A

A

offering exemption for $ 5 million or less during a 12 months period. no more than 1.5 million can represent sales by affiliates

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5
Q

new issue securities purchased in a standby arrangement are restricted from resale for

A

3 months, i.e. 90 days

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6
Q

FINRA Corporate Finance Dept

A

rates the “fairness” of the underwriters compensation. Issues requiring filing include equities, convertible debt, DPP’s, REIT’s Regulation A offerings, Rule 147 and non convertible debt rated BB or lower

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7
Q

Term Maturity Bond

A

Bonds from the same issue that share the same maturity dates. Term bonds that have a call feature can be redeemed at an earlier date than the other issued bonds. A call feature, or call provision, is an agreement that bond issuers make with buyers. This agreement is called an “indenture”, which is the schedule and the price of redemptions, plus the maturity dates. A term bond is the opposite of a serial bond, which has various maturity schedules at regular intervals until the issue is retired.

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8
Q

Currency impact of foreign investment

A

The gain or loss on foreign investments due to changes in the relative value of assets denominated in a currency other than the principal currency with which a company normally conducts business. A rising domestic currency means foreign investments will result in lower returns when converted back to the domestic currency. The opposite is true for a declining domestic currency.

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9
Q

Who declares dividends

A

BOD Board of Directors

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10
Q

Z tranche

A

A special type of bond class in a sequential pay collateralized mortgage obligation. This class of bond does not receive any interest or principal payments until all other tranches have been completely paid off. In a Z-tranche, the interest that is not paid is accrued and added to the principal for future interest calculation purposes.

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11
Q

Companion tranche

A

Definition of ‘Companion Tranche’ A class of tranche found in planned amortization class (PAC) and targeted amortization class (TAC) collateralized mortgage obligations (CMOs) that absorbs variable prepayment rates. The companion trache is so named because it is designed to provide support to the main PAC tranche, which has priority in receiving principal and interest payments so as to give its investors steadier and more predictable cash flows. If the actual rate of prepayments differs from the assumptions made at the time the CMO was issued, the difference is absorbed by the companion tranche.

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12
Q

after receiving notice, how long do you have to complete your regulatory element

A

120 days

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13
Q

One step merger

A

Once the SEC approves the preliminary proxy, the company can than send the definitive proxy to the shareholders and the SEC this is known as the one step merger

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14
Q

OCC

A

Options Clearing Corp

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15
Q

Cost method of accounting for investments

A

Cost method accounting is appropriate for most investors who purchase less than 20 percent of the shares in a given company.

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16
Q

Duration

A

according to positive convexity, as durations lengthen when rates fall

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17
Q

Which Mortgage is Fully Backed by the US Government

A

GNMA

18
Q

a client buys an IPO, they get a prospectus and a confirmation in the mail. Which document does the investment bank keep and how long are they required to keep it?

A

Confirmation for 3 years

19
Q

Definition of ‘Regulation T - Reg T’

A

The Federal Reserve Board regulation that governs customer cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities.

20
Q

Cumulative Voting

A

The procedure of voting for a company’s directors; each shareholder is entitled one vote per share times the number of directors to be elected.

21
Q

MC 400

A

Form MC-400 application if a member wishes to sponsor the association of a disqualified person. The member should file any MC-400 application when it amends the Form U4 and it must amend the Form U4 within 10 days of learning of a statutory disqualifying event

22
Q

Definition of ‘Schedule 14D-9’

A

This schedule must be filed with the SEC when an interested party such as an issuer, a beneficial owner of securities or a representative of either, makes a solicitation or recommendation statement to the shareholders with respect to a tender offer which is pursuant to Section 14(d)(4) of the 1934 Securities Exchange Act.

23
Q

statute of limitations for arbitration

A

6 years

24
Q

CIP

A

Customer Identification Program

25
Q

Definition of ‘Over-The-Counter Bulletin Board - OTCBB’

A

A regulated electronic trading service offered by the National Association of Securities Dealers (NASD) that shows real-time quotes, last-sale prices and volume information for over-the-counter (OTC) equity securities. Companies listed on this exchange are required to file current financial statements with the SEC or a banking or insurance regulator. There are no listing requirements, such as those found on the Nasdaq and New York Stock Exchange, for a company to start trading on the OTCBB. OTCBB is a quotation facility Stocks that trade on the OTCBB, will have the suffix “.OB”.

26
Q

Notice to Finra re div distribution

A

no less than 10 days before record date

27
Q

‘Stock Appreciation Right - SAR’

A

A right, usually granted to an employee, to receive a bonus equal to the appreciation in the company’s stock over a specified period. Like employee stock options, SARs benefit the holder with an increase in stock price; the difference is that the employee is not required to pay the exercise price (as with an employee stock option), but rather just receives the amount of the increase in cash or stock.

28
Q

Undetachable Stock Warrant’

A

A warrant is a type of certificate issued with a preferred stock. A preferred stock gives its holder claim to earnings and assets prior to common stockholders. The warrant enables the holder of the certificate to buy a certain amount of stock at a specific date at a specific price. Most often, this price is higher than the market price when the warrant or convertible bond is issued.

29
Q

leading indicator

A
  1. bond yields
  2. building permits (new private housing)
  3. money supply
  4. S&P 500
  5. average of weekly unemployment insurance claims
  6. changes in business inventories
30
Q

lagging indicators

A
  1. interest rates, esp prime rate
  2. unemployment rate
  3. corporate profits
  4. labor cost per unit of output
  5. comercial and industrial loans outstanding
31
Q

coincident indicators

A
  1. GDP
  2. employees on non agricultural payrolls (e.g. non farm payrolls)
  3. personal income
  4. consumer spending
  5. inventory/sales ratio
  6. retail sales manufacturing sales
32
Q

exceptions for banks from 34 Act?

A

Credit unions that make securities available through “networking arrangements”

33
Q

Form 147

A

must b filed with SEC at least 10 business days prior to sal

34
Q

FINRA filing of underwriters compensation

A

no later than1 business day sfter registration is filed with SEC

35
Q

daily net purchase limit for a passive market maker

A

30% of the passive market makers ADTV in the stock

36
Q

Seasoned Issuer

A

requird to pay filing fes at the time a registration is filed. can only distribute free writing prospectus after registration is filed

37
Q

limit on non-accountable underwirting expenses for DPP

A

limit on non itimized expenses is 3 %

38
Q

Rule 2810

A

DPP’s must file info withFINRA and receive a clean bill of health from FINRA before offering

39
Q

Selected dealer

A

non underwriter distributor. In distributions involving exempt securities selling group memebers can b banks or other firms that may not be FINRA members

40
Q

S 3

A

short form registration for seasoned issuers, if they have NOT sold more than one third of public floatover the 12 months preceding the registration

Series 79 (5 decks)

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