Regulatory Entities, Agencies and Market Participants Quiz Flashcards
If a CPA also provides investment advice to his clients for a fee the CPA is considered an?
Investment adviser
Who obtains the CUSIP for a municipal bond issue?
The underwriter
All of the following are considered self regulatory organizations for the regulation of securities offerings and trading?
FINRA, MSRB, CBOE
The function of the Department of the Treasury?
Oversee the US economic and financial systems
If a customer purchases securities and does not settle the account in 4 business days the brokerage firms first order of business is to?
Cancel the trade and sell off the purchased securities
The current margin requirement under Regulation T of the Act of 1934 is
50%
In the sale of a new issue of municipal securities MSRB disclosure requirements specify that a customer must be provided with a copy of the
Official statement
When an entity makes a market in a particular security it is deemed to be acting as
A principal
Which code under FINRA by laws would relate to trade practice violations and enforcement?
The code of procedure
Who enforces MSRB rules on NYSE member firms?
FINRA
If a member resigns from an SRO when will the registration take effect?
30 days after receipt of formal registration by the SRO
Under regulation T if a customers account is frozen for 90 days the customer
May make purchases if the full purchase is in the account before the order is transacted
A customer who failed to complete payment in 4 business days applied for an extension but was denied. What action should be taken?
Close out the transaction
Government securities regular settlement is
Next day
Which of the following best fits the definition of an investment advisor?
Publisher of reports on securities
A legal entity that offers securities to investors?
An issuer
Under regulation T the 90 day restriction applies to a customer who purchases and subsequently sells
Same stock in a cash account without having first fully paid for the purchase
A customer has not paid for a stock transaction in 4 business days and has been refused an extension the member firm
Must cancel or liquidate the order by immediately selling the securities
Regulation T of the federal reserve board involved all of the following security transactions
Corporate securities
ADRs
Rights & Warrants
The MSRBs anti money laundering rules require that a municipal broker dealers procedures contain.?
An employee training program
A designated independent party to test the procedures
When broker dealers effect trades for the account of other that are acting capacity?
Agency
Your client has not paid for a stock purchase on the allotted time period. According to Regulation T this account will be frozen for
90 days
A municipal broker / dealer renters a big. This is a
Nonbinding request for a likely bid
An investor can be granted an extension of time by
FINRA and the transacting exchange
A natural person must be considered an accredited investor if in each of the past 2 years his or her income exceeded
$200,000
MSRB rules do not permit
Nominal quotes distributed as bids
Nominal quotes distributed as offers
The federal act that established procedures for the protection of customer funds and securities in the event that a broker dealer becomes insolvent is called
The securities investor protection act of 1970
Broker dealers effect transactions of securities for
For both their own account and the account of others
If a customer purchasing securities on margin does not pay for the securities in the required time period the account is frozen and no credit may be extended to them for
90 days
According to MSRB rules if a control relationship exists between an issuer and a municipal securities dealer the nature of that relationship must be disclosed under which of the following circumstances
When the transaction involves the sale of a new issue
When the transaction occurs on the secondary market
When the broker dealer is acting as agent
When the broker dealer is acting as principal
Which of the following would meet the MSRBs definition of a customer?
A bank trust officer purchasing for a trust account
An investment advisor handling account for his clients
An issue buying a security in the secondary market
When a brokerage firm is acting as a dealer it is acting in the capacity of an
Principal
Special procedures must be followed by a municipal bond dealers when opening an account for which of the following?
Principal of another firm
Under MSRB rules a broker dealers municipal activity must be supervised by
A municipal securities principal
Which of the following describes a market maker?
A broker dealer that assumed the risk of holding an inventory of shares of stock in order to facilitate the trading of that security
A customer who purchases securities in a cash or margin account must pay for the securities in
4 business days
According to MSRB rules under which of the following conditions may a municipal dealer share in the loses of a customers account?
Under no circumstances
Where do municipal trade
OTC
FINRA s main functions include all of the following
Monitoring compliance with rules of ethical practice
Writing rules enforcing broker /dealer behavior
Governing broker /dealer and registered representative trading activity
An investor an be granted an extension of time by
FINRA and the transacting exchange
A members blanket fidelity bond provides insurance against
Lost stock certificates
Employee theft of stock certificates
A registered representative embezzling cash from a customers account
