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Series 7 > Regulations - FINRA Rules > Flashcards

Regulations - FINRA Rules Flashcards

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Series 7 Top-off Exam flashcards
1
Q

Any person who solicits orders to buy or sell securities must be _______, as is anyone who makes a recommendation or performs a _______ determination

A

registered; suitability

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2
Q

If a sales assistant wishes to write an order ticket, they must take the _____ - they cannot receive commissions or comp for business production

A

Series 11

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3
Q

To be registered, you must complete a ____ form with employment history and residence history

A

U-4 form

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4
Q

A person is subject to statutory disqualification if he/she has:

A
  • been suspended or expelled from any other SRO (US or foreign)
  • is subject of an SEC order suspending or revoking registration
  • willfully filed a false or misleading application
  • willfully violated securities or commodities laws
  • has been convicted or any securities or “money” related misdemeanor or any felony within the past 10 years
  • have been temporarily or permanently enjoined from engaging in the securities business
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5
Q

Any dispute between a RR and the firm must be handled through _____

A

bind arbitration

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6
Q

For any “intra-industry” disputes, the arbitration panel must consist of ____ “non-public” arbitrators

A

3 non-public arbitrators

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7
Q

Any outside employment is shown on the employee’s _____ form

A

U-4

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8
Q

Regulatory element CE is required on the registrant’s _____ anniversary and every _____ after that

A

2nd anniversary and every 3 years after that

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9
Q

Firm element CE is required _____

A

annually

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10
Q

If you leave for active military duty, you registration becomes _____ and when you return it is reinstated

A

inactive - firm has to send a letter to the CRD

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11
Q

If a person is terminated, a ____ form must be filed with FINRA within _____ of termination. A copy of the form must be supplied to the individual

A

a U-5 form, within 30 days

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12
Q

After ____ years without being associated with a firm that person must retake the appropriate exams

A

2 years

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13
Q

You cannot _____ your licenses with a firm to keep registrations current after leaving the business

A

“hang”

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14
Q

Firms must file _____ with FINRA regarding suspicious events as they are ______

A

must file reports as the events are happening

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15
Q

If a RR has made a violation, the firm must notify FINRA no later than _____ after the event happened

A

30 days

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16
Q

RR are prohibited from giving or receiving gifts in excess of ____ per person per year related to work.

A

$100

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17
Q

The gift limit does not prohibit ________

A

customer entertainment

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18
Q

Gift records must be maintained for ____

A

3 years

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19
Q

Paying for work (work done by a customer for a RR) is permitted if there is a _____ agreement and it is approved by the _____ of the firm

A

written agreement approved by the principal of the firm – records must be kept for 3 years

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20
Q

“Correspondence” is defined as any written or electronic communication made available to _____ or fewer retail investors within any _____ period

A

25 or fewer within any 30 day period

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21
Q

Firms must retain both ____ and ____ communications if you use the same phone or email address

A

business and personal

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22
Q

An RR can open a joint account and share in P&L with a customer with express _____ approval

A

written

23
Q

For joint accounts with a customer where there is profit sharing, must share in proportional P&L to capital contributed UNLESS that customer is a _____

A

family member

24
Q

An RR cannot borrow or lend to a customer UNLESS they are a _____ or ______

A

family member or borrowing institution

25
Q

Lending/borrowing is approved (if have prior approval of the member firm) between: ____ RR at same firm; a ______; and a customer with which you have a ______

A

2 RRs at same firm; significant other; customer with whom you have a business relationship

26
Q

An RR cannot share commissions with someone who is not _______

A

registered

27
Q

“Selling away” is when an RR effects a transaction at _____

A

another firm

28
Q

FINRA only allows Cash on Delivery transactions if:

A
  • the firm has a record of the name and address of the agent and the customer’s account number at the agent
  • order ticket notes COD
  • confirmation is mailed no later than the next business day to the customer
  • firm has obtained an agreement from the customer that he has instructed the agent to pay when the securities are delivered
29
Q

Any control relationship between the firm and the issuer must be ______; typically verbally at time of recommendation and then again with a _____ disclosure on the trade confirmation

A

disclosed, verbally then with a written disclosure

30
Q

If a firm is publicly traded, then orders to buy their stock cannot be ______

A

solicited

31
Q

A RR cannot give _______

A

investment advice

32
Q

If a customer consents to arbitration, the panel consists of a majority of _____ arbitors

A

public

33
Q

For purchases of IPOs, customers must sign a statement that they are not restricted during the _____ preceding the first IPO purchase, then _____ thereafter

A

12 month; then annually thereafter

34
Q

The three types of communication as defined by FINRA are:

A
  • correspondence
  • retail communication
  • institutional communication
35
Q

Correspondence (25 or fewer retail clients within a 30 day period) is _____ subject to FINRA filing rules.

A

NOT

36
Q

Retail communication is to ____ or more retail clients within a 30 day period.

A

25 or more - must have less than $50m in assets

37
Q

Institutional communication is made available only to _____ clients

A

institutional (anyone with $50m or more in assets)

38
Q

The four types of retail communication are:

A
  • advertising (intended for mass market)
  • sales literature (directed at a specific audience)
  • independently prepared reprint (a reprint of excerpt of any article where publisher is not affiliated with a FINRA member and report was not commissioned by a FINRA member)
  • Public appearance
39
Q

In communications, you can say that the ____ is a FINRA member but no the ____

A

the firm is a FINRA member, not the RR

40
Q

Copies of communications must be kept for ______

A

3 years

41
Q

Research reports must be written or approved by a FINRA qualified _______

A

supervisory analyst

42
Q

A member firm acting as a manager or co-manager in an underwriting syndicate cannot issue a research report on that company for _____ following the effective date for an IPO and _____ following the effective date for a follow on offerin

A

10 days; 3 days

43
Q

If a recommendation is made, it must be disclosed if the member organization or an affiliate owns more than ____ of the common stock of the issuer

A

1%

44
Q

It must also be disclosed, if making a recommendation, if the member firm has performed or is expected to perform IB services within the past ____ or future ____; or if they have received compensation from equity offerings in the past _____

A

in the past 12 months or future 3 months, or if they have received comp from equity offerings in the past 12 months

45
Q

The SEC defines a research report as any report that provides enough information to make an ______ and is distributed to at least _____

A

make an investment decision and is distributed to at least 15 people

46
Q

If a RR gets a 3rd party research report to give to a client, it must be approved by the _______

A

supervisory analyst

47
Q

Research reports, along with corresponding communications and approvals, must be kept for _____

A

3 years

48
Q

Reg AC stands for _____

A

Analyst Certification

49
Q

Whenever a research analyst makes a public appearance, a record must be made within _____ of the end of that calendar quarter which includes a statement by the research analyst that the views are his own and that they aren’t compensated for their views

A

30 days

50
Q

If a complaint is filed with the District Hearing Panel, at least _____ notice must be given to both parties

A

1 month’s notice

51
Q

If either party is displeased with the District Hearing Panel’s decision, an appeal can be made to the _____, then if that is unsatisfactory they can appeal to the _____

A

National Adjudicatory Panel; then to the SEC (then to the Federal Court)

52
Q

Once a decision is final, the ______ decides the appropriate penatly

A

FINRA

53
Q

The max fine for a MINOR penalty is _____

A

$2,500

Series 7 (34 decks)

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