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Series 24 > Review > Flashcards

Review Flashcards

1
Q

How are markups/markdowns determined in an active competitive market?

A

Highest Bid/Lowest Ask

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2
Q

Under state law, an offer of rescission made by a broker-dealer to a customer must be accepted or rejected by the customer within how many days?

A

30 days

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3
Q

A member firm must disclose in a research report if it has received, expects to receive, or intends to seek compensation for investment backing services from the subject company during what period?

A

12 months before and 3 months after publication

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4
Q

Unless customers provide written consent to the contrary, all trades for managed accounts must be done on an (agency/principal) basis.

A

Agency

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5
Q

Under Rule 103, when must application for acting as a passive market maker be made?

A

One business day before the restricted period begins.

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6
Q

SEC rules require that customer fail to delivers be closed out by buying in the position no later than how many days after the settlement date?

A

10 business days

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7
Q

How to you calculate Long Market Value (LMV) at maintenance?

A

Divide the debit balance by 0.75

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8
Q

Simplified arbitration is available only for claims of what dollar amount?

A

$50,000 or less

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9
Q

How frequently are long term capital gains distributed by investment companies?

A

Annually

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10
Q

What is a cross-guarantee?

A

When a customer agrees to use the money or securities in one account to carry the guaranteed account if it fails to meet margin calls, minimum equity requirements, etc.

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11
Q

Under Nasdaq trading rules, Market on Close orders cannot be cancelled after…?

A

3:50pm ET

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12
Q

If a securities broker-dealer registered with FINRA wishes to merge with another member, when must FINRA be notified?

A

at least 30 days prior to the closing date

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13
Q

When is a negative consent letter acceptable to effect a bulk transfer of variable annuities?

A

Only when a member firm is experiencing financial or operational difficulties or is no longer in business.

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14
Q

When must fidelity bonds be reviewed and renewed?

A

Annually, within 60 days of the bond’s expiration date.

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15
Q

Under Rule 101 of Reg M, syndicate members may only execute (solicited/unsolicited) orders during the restricted period?

A

Unsolicited

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16
Q

Code of Procedure decisions must be appealed within how many days?

A

25 days

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17
Q

SARs must be filed with FinCen for suspicious transactions aggregating what ammount?

A

$5,000 or more.

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18
Q

The issuer’s independent accountat issuing a (Qualified/Disclaimer) opinion is an acceptable grounds to delist from Nasdaq.

A

Disclaimer

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19
Q

Can customers purchase new issues on margin?

A

No

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20
Q

How are DPPS and unlisted REITS displayed on customer’s account statements?

A

As an estimated per-share value

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21
Q

How often are OSJs inspected?

A

Annually

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22
Q

Regarding TRACE reporting:
Markeups/Markdowns are (included/excluded)
Commissions are (included/excluded)

A

Markeups/Markdowns are included.
Commissions are excluded.

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23
Q

Investment advisers muse be federally registered if the amount of assets under management is what amount?

A

At least $110 million

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24
Q

Confirmations on DVP trades must be delivered no later than when?

A

T+1

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25
Q

Under the code of arbitration, monetary awards must be paid within how many days?

A

30 days

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26
Q

Regarding limited business member firms, who is allowed to purchase an equity IPO?

A

Employees of the limited business member firm, but not the firm itself.

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27
Q

When must SARs be filed?

A

Within 30 calendar days of suspicious activity.

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28
Q

Investment Companies only need to register if they have a capital of at least what amount?

A

$100,000

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29
Q

What action will Nasdaq take if a market maker receives a preferenced order and the firm is not at the inside market?

A

Nasdaq will return the order to the entering party.

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30
Q

Under Regulation M, securities with an ADTC of at least $100,000 and a public float value of at least $25 million are subject to a restricted period of how long?

A

One day (the business day before the effective date)

The managing underwriter must notify FINRA in writing wheter the restricted period is 1 or 5 days and state reasoning per Reg M.

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31
Q

Drafts of subordinated loan agreements should be filed with FINRA when?

A

at least 10 business days prior to the effective date of cash loans.

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32
Q

What is the minimum equity for prime brokerage accounts?

A

$500,000

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33
Q

Who determines if a circut breaker has been triggered?

A

The primary market or exchange

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34
Q

When must Registered Representatives and Principals recieve an annual compliance review?

A

Annually

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35
Q

Once a market maker’s bid or offer is decremented to zero, how long do they have to update their quote?

A

30 seconds

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36
Q

Confirmations must be sent or received no later than when?

A

The completion of the transaction.

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37
Q

Executing brokers in prime brokerage relationships have a minimum net capital of what amount?

A

$1 million

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38
Q

A buy-in may only be executed after giving the contra broker how much written notice of intent to buy-in?

A

Two business days

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39
Q

Securities in which a market maker is the sole market maker are (allowable/nonallowable) assets for capital computation purposes.

A

Nonallowable

There is no one else to purchase the inventory.

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40
Q

When must CTRs be filed?

A

Within 15 calendar days of currency receipt.

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41
Q

The minimum net capital for an established carrying firm is…

A

$250,000 or 1/15 of AI, whichever is greater

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42
Q

Under SOX, what is the statute of limitations for allegations of fraud in comnnection with the offering of securities?

A

Five Years

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43
Q

Purchase and sale of securities must be posted to the broker-dealer’s blotter no later than what date?

A

the business day following the trade date

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44
Q

For an additional issue offering where the subject security is quoted by the OTC Markets Group, what is the prospectus delivery requirement period?

A

40 days

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45
Q

Do “blind” help wanted ads need to be prefiled for established firms?

A

No

THey are subject to spot-checking.

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46
Q

Under Reg SHO, the market maker must close out the position by purchasing the security if a fail to deliver has been on the threshold securities list for how long?

A

More than 13 consecutive settlement days

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47
Q

Do blotters (records of original entry) reflect dividends and interest received?

A

No

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48
Q

In their first year, when must new members prefile all retail communications with FINRA?

A

10 business days before first use

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49
Q

A modification or cancellation of a member firm’s fidelity bond requires that notification be made to FINRA within how long?

A

10 business days

50
Q

How often are nonsupervisory branch offices inspected?

A

Every three years

51
Q

Which rule allows trades in unregistered securities between QIBs without concern for holding periods or volume restrictions?

A

Rule 144

52
Q

For a Nasdaq-listed IPO, when must the syndicate manager notify Nasdaq as to what the POP (public offering price) will be?

A

by 6:45pm ET on the night before the issue is to be released for trading

53
Q

If a Regulated Investment Company (RIC) accumulates greater than 5% interest in an issuer, it must file short Form 13G within how many days of the end of the calendar year in which it exceeded the threshold?

A

45 days

54
Q

If discretion as to time or price is used, how is this indicated on the order ticket?

A

It is marked “not held”

55
Q

How often must CAT reports be transmitted to FINRA?

A

Daily

56
Q

Repurchase agreements are (allowed/not allowed) for exempt securities?

A

Allowed

Repurchase agreements are prohibited for nonexempt securities.

57
Q

What is needed to approve the termination of 12b-1 fees of a mutual fund?

A

A majority vote of the outside directors.

58
Q

If retail communication is already filed/cleared by a registered stock exchange, is filing with FINRA required?

A

No

59
Q

Can securities in a discretionary account be rehypothicated?

A

No

60
Q

A prospectus in use for more than 9 months cannot contain information older than how many months?

A

16 months

61
Q

How are markups/markdowns determined in an inactive competitive market?

A

Contemporaneous sales/purchases

62
Q

Are cross-guarantees allowed on regular or day-trading accounts?

A

Regular accounts only

They are prohibited on day trading accounts

63
Q

How are markups/markdowns determined in a dominated and controlled market?

A

Contemporaneous cost.

64
Q

Appeals of written determinations by Nasdaq regarding clearly erroneous trades must be made within how many minutes?

A

30 minutes

65
Q

If the value of any single nonexempt securitiey exceeds what amount of tentative net capital, a firm must take an additional haircut on the amount by which the position exceeds the threshold?

A

10%

66
Q

What is the statute of limitations for arbitration?

A

6 years

67
Q

A member firm is exempt from the penny stock disclosure rules if its revenue from penny stock transactions is how much of its total revenue?

A

5% or less

68
Q

Under SEC rules, how often must customers be notified of their free credit balances?

A

At least quarterly

69
Q

Which class of mutual fund shares are eligible for breakpoints?

A

Class A Shares

70
Q

What is the minimum net capital of a Prime Broker?

A

$1.5 Million

71
Q

A report must be made to FINRA immediately whenever an associated person becomes a respondent in any securities- or commodities-related litigation settled for an amount greater than…?

A

$15,000

72
Q

Under NMS Rule 606, how often must market makers report information on their routing of nondirected orders?

A

Quarterly

73
Q

Under SOX, the officers signing the financial statements of a reporting company must certify that they have evaluated their internal controls within the previous how many days?

A

90 days

74
Q

Bonds subject to a (partial/in-whole) call are subject to reclaimation.

A

Partial

Bonds subject to in-whole calls are never subject to reclaimation.

75
Q

Appeals of written determinations by Nasdaq regarding clearly erroneous trades are made to what organization?

A

MORC

Market Operations Review Committee

76
Q

When the number of shares in a stock dividend or stock split represent a 25% or more increase, when is the ex-date?

A

One business day after the payable/distribution date.

77
Q

Who can act as principal in selling stock subject to Rule 144?

A

Market Makers in the subject security

They can purchase for their trading account inventory.

78
Q

All disputes over what period must be addressed in a firms notice to FINRA and the SEC regarding termination of its independent accountant?

A

24 months prior to termination

79
Q

Form 8K, used to report newsworthy events, must be filed with the SEC within how many days?

A

4 business days

80
Q

Any concessions earned must be forfeited by the member if a customer redeems a variable annuity contract within how many days of acceptance by the insurance company?

A

7 days

81
Q

After receiving a complaint from the Department of Enforcement, a respondent has how many days to file a response?

A

25 days

82
Q

Unless an exception is available, carrying firms must perform a reserve computation how often?

A

Weekly

83
Q

Research analysts are (prohibited/allowed) to participate in road shows relating to investment banking transactions.

A

Prohibited

84
Q

Summary information on customer complaints and certain criminal/civil actions must be filed with FINRA when?

A

By the 15th day of the month following the calendar quarter in which the complaints/actions are made.

85
Q

Are cross-guarantees allowed on regular or day-trading accounts?

A

Regular accounts only

They are prohibited on day trading accounts

86
Q

Member firms are permitted no more than how many temporary subordinated loans per year?

A

Three

87
Q

All SEC registered broker-dealers must file audited financial statements (audited FOCUS II or IIa) within how many days of the fiscal year-end?

A

60 days

88
Q

Repurchase agreements are (allowed/not allowed) for exempt securities?

A

Allowed

Repurchase agreements are prohibited for nonexempt securities.

89
Q

How long are shelf registrations valid for?

A

2 Years

3 Years for WKSIs

90
Q

Clearing firms have a minimum net capital of what amount?

A

$250,000

91
Q

When do individuals investing in master limited partnerships (MLPs) not recieve a Schedule K1 (Partners’ share of income, deductions, etc.)?

A

When they invest indirectly. (i.e. through mutual funds or other investment companies)

92
Q

Trades not reported within 10 seconds of execution are considered late and must use which modifier?

A

.Z

93
Q

A passive market maker’s bid is limited to…?

A

the highest current independent bid.

94
Q

How often must carrying firms reduce to posession or controll all fully paid-for customer securities and excess margin securities?

A

Daily

95
Q

12b-1 fees must be reviewed by the board of directors how frequently?

A

Quarterly

96
Q

SEC Rule 15c3-3 is also known as…?

A

The Customer Protection Rule

97
Q

Othen than bar or expulsion, when are sanctions imposed under the Code of Procedure effective?

A

On a date specified by the hearing officer, but no earlier than 30 days after the written decision is handed down.

98
Q

How to you calculate Short Market Value (SMV) at maintenance?

A

Divide the credit balance by 1.3

CR / 1.3 = minimum maintenance.

99
Q

Under Regulation A, how far in advance must an offering circular be provided to purchasers in advance of sales?

A

48 hours

100
Q

What is the margin buying power for pattern day traders?

A

4x Maintenance Margin Excess

Regular buying power is 2x SMA

101
Q

Regarding Regulation A, is general solicitation permitted on television?

A

Yes

102
Q

Under Regulation M, securities with an ADTC of at least $100,000 and a public float value of at least $25 million are subject to a restricted period of how long?

A

One day (the business day before the effective date)

The managing underwriter must notify FINRA in writing wheter the restricted period is 1 or 5 days and state reasoning per Reg M.

103
Q

Under the Cheap Stock Rule, what is the minimum margin required for stock trading under $5 per share?

A

100% Market Value or $2.50–whichever is greater.

104
Q

Regarding penny stocks, established customers are exempt from the (suitability statement/disclosure) requirements.

A

Suitability Statement

105
Q

What is the haircut on limited market (only one or two market makers) non-Nasdaq stock?

A

40%

106
Q

Regarding the sale of unregistered or control stock, when must Form 144 be filed with the SEC?

A

Concurently with or before the sale.

107
Q

Does the 5% policy apply to exempt securities?

A

No

108
Q

Under FINRA rules, how often must discretionary accounts be reviewed?

A

Frequently

109
Q

Investors can purchase securities on a secured website (Before/After) the investors have been qualified?

A

After

110
Q

If a member has a reserve requirement, when must the deposit be made to the reserve account?

A

Within one hour of the bank opening on the second business day following computation.

111
Q

When securities are discovered missing and criminal activity is suspected, when must a report be made to the SIC?

A

Within 1 business day of discovery.

112
Q

How is the final payout for equity linked notes (ELNs) distributed?

A

In cash

113
Q

SEC 17a-5 requires broker-dealers to prepare trial balances how frequently?

A

Monthly

114
Q

A firm that has customer credits of more than $1 million is required to calculate its reserve requirement and make deposits into the special reserve account how often?

A

Weekly

115
Q

Which act defines the determination of financial failure of a firm?

A

The Securities Investor Protection Act of 1970

116
Q

Regarding margin accounts, what is included in SIPC coverage?

A

Only the equity in the account.

117
Q

FINRA rules prohibit analysts and members of their households from investing in a company’s securities for how long before/after research report issuance?

A

30 days before and 5 days after issuance.

118
Q

During the offering period, when is a syndicate member permitted to sell below the POP?

A

Only if released to do so by a manager. (The issue isn’t moving/selling)

119
Q

SEC Rule 503 requires that issuers of unregistered securities file Form D (Notice of Sales Made) with the SEC within how many days of first sale?

A

15 days

120
Q

Retail communications regarding DPPS must be (pre-/post-) filed?

A

post-filed, within 10 days of first use

121
Q

Securities in which a market maker is the sole market maker are (allowable/nonallowable) assets for capital computation purposes.

A

Nonallowable

There is no one else to purchase the inventory.

Series 24 (5 decks)

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