Rules & Regulations

Question 1

Regulation NMS is a ___ regulation that requires market centers to accept _____ that do not discriminate against___

Answer 1

SEC; automated executions; any class of users of their systems.

Question 2

SEC Rule 10b-18 allows issuer to buy its shares in the open market at ___

Answer 2

The highest independent bid or the last reported sale price, whichever is higher.

Question 3

Rule 415 permits ___ corporate issuers to
File a shelf registration statement for securities offerings good for up to ___

Answer 3

Seasoned; 5 years

Question 4

In the weekly T-bill auction, the amount of ___ bids are set aside from the total securities to be auctioned and are filled at the ____.
The remaining Tbills to be auctioned are filled from the ___ on up.
Once the issue is sold out, all of the other winning bidders are filled at the ___ that completed the sale (so all winning bidders get the same interest rate-this is ___).
Once the issue is sold out, the remaining higher rate bids ___

Answer 4

Non-competitive; average winning rate lowest interest rate bid
Highest interest rate bid; a Dutch auction
Are void

Question 5

In a new corporate offering, the issuer is responsible for printing ___, printing ___, and ___ with SEC & each state in which the issue will be sold.

Answer 5

Certificates; prospectus, registering with

Question 6

A password protected site maintained by a member firm is considered ___

Answer 6

Sales literature

Question 7

A fax unsolicited to a customer must include 1) ID of ___ 2) ____ of sender 3) ___ of sender

Answer 7

1) sender
2) time, place, address
3) phone #

Question 8

Under Regulation D, issuers must provide a copy of ___ or ___ to investors to obtain a private placement exemption.

Answer 8

Offering circular; private placement memorandum

Question 9

Form 1099-DIV reports ____

Answer 9

Cash dividends

Question 10

A customer is accepted into a limited partnership when ___.

Answer 10

the genera partner signs the agreement.

Question 11

Mutual funds must send ___ statements to shareholders ____.

Answer 11

Financial; semiannually

Question 12

You cannot appeal the decision of the arbitrator regarding a refund of fees because ___.

Answer 12

You already signed an arbitration agreement waiving the right to appeal.

Question 13

A hold can be placed on an account due to suspected financial exploitation of a senior for ___, then ___ if internal firm review finds reasonable suspicion, then ___ if government orders it.

Answer 13

15 business days; 10 more days’ extension; 30 more days

Question 14

____ requires BDs, investment companies, & investment advisors to adopt policies to protect customer records like 1) ___ notice of policies 2) allow ___ 3) ___ disclosure.

Answer 14

Regulation S-P
1) initial/annual
2) opt-out
3) notice of policies before

Question 15

Street name registration

Answer 15

Investors hold securities thru a brokerage firm and register those securities in the firm’s name

Question 16

Direct registration

Answer 16

Shares are held in the investor’s name in book-entry form in book of transfer agent

Question 17

Under Regulation T, an extension for payment must be requested ___

Answer 17

On settlement date +2.

Question 18

___ allow for payment of customer purchases to be made by customer’s agent at time of settlement.

Answer 18

DVP/RVP accounts

Question 19

If an RR doesn’t complete their CE on time, they 1) are deemed ___ 2) Can’t do ___ 3) Can’t ___

Answer 19

1) CE inactive
2) RR duties
3) get commissions

Question 20

A Municipal firm does not need to file ___ because they’re already available on ___.

Answer 20

Official statements; EMMA

Question 21

___ is a branch office that oversees activities of FAs & ensures compliance w/__.

Answer 21

Office of Supervisory Jurisdiction (OSJ); regulations

Question 22

In order to open a new account for a customer that wishes to buy IPOs, the customer must ___.

Answer 22

Sign a representation letter.

Question 23

Records of speaking engagements must be maintained by FINRA member firms for __.

Answer 23

3 years

Question 24

Regulation D defines an accredited investor as 1) any ___ investor like a ___ company, ___ company, __ or ___ & loan company 2) a ___ or institutional investor with at least ___ in assets & was Not formed w/the intent of ___.

Answer 24

1)Institutional; investment; insurance: bank; savings
2) non-profit organization, trust; $5 million; buying a private placement

Question 25

Internet cookies of visits to other firms’ websites is ___

Answer 25

NOT considered personal info.

Question 26

Durable power of attorney survives __

Answer 26

Incapacitation

Question 27

When purchasing penny stocks for an established customer, a B-D must ___ before effecting the transaction.

Answer 27

Provide the customer with the current market bid & offer those bids whenever they exist

Question 28

If a registered person leaves the securities industry and enrolls in the Maintaining Qualifications Program (___), they have ___ before they’re required to retake their qualification exams.

Answer 28

MQP; 5 years

Question 29

If a registered representative is managing a piece of property, 1) the RR is required to ___ that they’re managing the property 2) managing the property as a paid employee would be considered ___ 3) managing the property as a volunteer would be considered ___.

Answer 29

1)Notify his firm
2) outside business activity
3) outside business activity

Question 30

The ___ is the FINRA system under which representative violations are handled.

Answer 30

Code of Procedure

Question 31

For B-Ds, a ___ provides a new customer with a summary of information relevant to the customer relationship.

Answer 31

Form CRS

Question 32

A B-D must send ___ statements to
Customers; statements must include a ___ sheet and ___ computation

Answer 32

Finance; Balance; net capital

Question 33

Under SEC rules, ___ must be provided to customers at account opening to summarize key details of the types of services offered by the firm, their costs, conflicts of interest, & any ____the firm or its associated persons.

Answer 33

Form CRS; disciplinary actions taken against