review chapters Flashcards
A qualified independent underwriter is a member firm that has been actively engaged in the investment banking or securities business for the preceding:
36 months
3 years
Industry regulations provide guidelines for the sale of a member’s own securities in a public distribution. Pricing is based on
The price of the securities may not be higher than that determined by a qualified independent underwriter.
Non covertible debt is also called
straight debt
what is holding period for a Reg A issue..
There is no holding period for purchasers of a Regulation A
Rule 144. If a stock is listed on an exchange, the maximum that may be sold is
the greater of 1% of the total shares outstanding or the average weekly trading volume of the past four weeks.
A manager of a syndicate may publish a research report for a follow-on offering after
3 days
No independent market maker is quoting the stock on Nasdaq
No independent market maker is quoting the stock on Nasdaq
A trader has just been told that her firm will be participating in a follow-on offering of an OTC equity security. As a market maker in the security, the firm should:
A member firm participating in a distribution of an OTC equity security is required to withdraw its quotations during the Regulation M restricted period. Passive market making, and filing for excused withdrawal status, would only be applicable for a registered Nasdaq market maker.
SEC Rule 13e-3
applies to going private transactions by certain issuers or affiliates. Since the issuer will be delisting its shares from the NYSE, it is required to file Schedule 13E-3 with the SEC. The issuer is also required to file a 14A proxy statement with the SEC, since shareholders will need to receive information on the transaction
Form 8-K is filed:
As needed
All companies that are registered with the Securities and Exchange Commission are required to promptly file Form 8-K for current reporting, upon the occurrence of any material event that would affect its financial condition or the value of its shares, and that would be deemed of significant interest to the public.
Notification to the SEC regarding sales under Rule 144 need NOT be filed if the amount of securities sold does not exceed:
5,000 shares and the dollar amount does not exceed $50,000
Series 26 registration permits
a person to supervise the purchase and/or sale of open-end investment company shares, variable contracts, and newly issued closed-end investment company shares. The representative who is selling the shares may have either a Series 6 or Series 7 registration
FINRA defines institutional investors as any of the following entities.
Banks, savings and loans, insurance companies, registered investment companies, and registered investment advisers
Government entities and their subdivisions
Employee benefit plans, such as 403(b) and 457 plans, and other qualified plans with at least 100 participants
Broker-dealers and their registered representatives
Individuals or any other entities with total assets of at least $50 million
Persons acting solely on behalf of institutional investors
In a net basis transaction, a dealer holding a customer order to buy, acquires the stock
on a principal basis, and executes the customer order at a different price than the dealer’s acquisition price. Since the two legs of a net basis transaction are at different prices, the market maker will report both sides of the transaction as principal
Unless an exception is available, a broker-dealer wishing to initiate or resume quotations for a non-exchange-listed security must have in its possession one of the following five sources of information about the security to be quoted.
A prospectus filed with the SEC under the Securities Act of 1933, which has been in effect for less than 90 days
A Regulation A+ offering circular, effective within the preceding 40 days
The issuer’s latest Form 10-K and all subsequent Form 10-Qs and Form 8-Ks (and the issuer must be current in its filings)
For foreign securities, financial information filed with the SEC during the issuer’s last fiscal year under Rule 12g3-2(b) or
16 specified items of information about the issuer, which must be reasonably current in relation to the day the quotation is published
DTCC clear’s and settles transactions in Nasdaq securities through the:
CNS System
A continuous net settlement system.
Market makers must clear and settle transactions through a clearing agency that uses a Continuous Net Settlement (CNS) System.
A client has been notified that her long margin account is restricted. The current status of this account is one where the:
Equity is below the initial requirement but in excess of maintenance
The process of returning securities that have previously been accepted is known as:
Reclamation
The following securities are DTC-eligible.
Corporate equities
Corporate bonds
Municipal bonds
Money-market instruments
Mortgage-backed bonds
U.S. Treasuries and agency securitiesThe Federal Reserve Board rules that govern the extension of credit for the purchase of securities include:
Regulation T, which governs broker-dealers
Regulation U, which governs nonbroker-dealer lenders (e.g., banks)
Regulation X, which governs borrowers who buy securities
A firm to firm buy-in may be executed as early as:
3 business days after settlement
Confirmations on regular-way transactions must be sent to customers no later than the:
The completion of the transaction
Which of the following protect clients against theft of a physical certificate?
A fidelity bond
The Special Reserve Bank Account calculation must be performed how frequently?
weekly
SEC Rule 17a-13 requires broker-dealers to perform box counts:
Quarterly
A Financial and Operational Combined Uniform Single (FOCUS) report, Part IIA is filed:
Quarterly, by introducing firms
Buying power in a pattern day trader’s margin account is equal to:
Four times excess margin maintenance
A Suspicious Activity Report (SAR) must be filed within what time period?
30 days
In a give-up relationship:
A broker-dealer who previously reported a trade allocates part of the trade to another broker-dealer
