Regulatory Requirements Flashcards
What is arbitration?
An impartial panel hears both sides of a case, studies the evidence, and decides how the issue should be resolved
An intermediary that facilitates transactions involving sales of investments or real estate is called?
A brokerage company
What is the role of a chief compliance officer?
A corporate official in charge of overseeing and managing compliance issues within an organization, ensuring for example, that a company is copying with regulatory requirements and that the company and its employees are complying with internal policies and procedures
What is a credit union?
Similar to banks in terms of products offered, they typically have limited membership based on employee or other association
What is the criteria that must be met to register with the state or SEC?
A - must provide advice
B - must be in the business of advice
C - must recieve compensation for advice
This created the consumer financial protection bureau and the financial stability oversight council.
Changed the thresholds for registration with the SEC
- Small advisor: less than $25M AUM
- Midsize adv: btw $25M - $100M AUM
- Large adv: more than $100M AUM
Dodd-Frank Wall Street Reform and Consumer Protection Act
What are the exclusions to registration?
L - lawyers A - accountants T - teachers E - engineers B/D who don't receive compensation A bank A bona fide publication
What are the FDIC limits?
$250,000 per account type (chk & sav, IRA, mutual savings)
$250,000 per ownership (single & joint)
What does the federal bankruptcy act of 1938 do?
Provides for the liquidation of hospitality troubled firms and reorganization of trouble firms that can survive
What is the Financial Industry Regulatory Authority (FINRA)?
An industry self-regulation authority which conducts reviews of members business activities, discipline violators, and designs, operates, and regulates securities markets and service to benefit and protect the investor.
What is the firm element requirement?
Each firm must complete annual training focused on issues that the firm feels need to be addressed
What is the glass-steagall act of 1933?
Prevents financial institutions from consolidating and offering and combination of traditional commercial banking, investment banking, and insurance
What is the Gramm-Leach-Bliley Act of 1999?
Repealed the glass-stegall act of 1933. Addresses the way financial institutions manage the private information of clients. It also repealed the law that banks could not combine investments and insurance.
What law specifies what constitutes insider trading and the penalties for doing so?
Insider trading and securities fraud enforcement act of 1938
What is an investment advisor?
A person or firm who must register with the SEC and/or states they do business under the ABC rule
What is the investor advisors act of 1940?
Established the fiduciary standards for RIAs which requires acting in the best interest of the client
What is an investment bank?
A securities B/D that underwrites new issues
What is the investment company act of 1940?
Requires registration for and regulates activities of investment advisors
What is the Maloney act of 1938?
Brought the over-the-counter market under regulation
What is the McCarren-Ferguson Act of 1945?
States that insurance is to be regulated by the state
What is mediation?
An informal, voluntary, and non-binding approach to dispute resolution in which the mediator tries to guide the parties to a solution
What entity pools money from shareholders and invests the funds in various types of securities?
Mutual Fund Company
Who is the Office of the Comptroller of the Currency (OCC)?
They charter, supervise, and regulate national banks and federal branches of foreign banks in the US
What is a Registered Investment Advisor (RIA)?
An individual that advises clients on their investments and may manage portfolios
