S-79 Packet 1 Flashcards
(81 cards)
To appeal a decision of the National Adjudicatory Council against membership of a firm, a written request for review must be filed within
25 days
What three fees are paid by the issuer?
- Blue sky fees 2. Printing fees 3. Issuer expenses
What fees are considered compensation to the underwriter?
Marketing expenses
How much stock does a “mini-tender” seek to acquire?
Less than 5% of the outstanding shares
Under the Securities Act of 1933, who is held liable for untrue or omitted information in a registration statement
- ) professionals preparing and certifying reports
2. ) Officers and directors
What does the SEC Act of 1933 regulate and what does it require?
- ) regulates the new issue market
2. ) requires registration of securities
What does the Securities Exchange Act of 1934 regulate, what did it create, what does it require?
- ) secondary market
- ) Created the SEC
- ) requires Broker-Dealers register with the SEC
What are 3 types of covenants in the Trust Indenture Act of 1939?
- ) Affirmative
- ) Negative
- ) Financial
What is an affirmative (“positive”) covenant?
require issuer perform certain actions (sustain a business, pay taxes etc.)
What is a negative covenant?
Restricts issuer from doing something (paying a special dividend)
What are financial covenants
requires issuer maintain a certain credit profile
What is the SIPC?
Securities Investor Protection Corp - non profit org. that protects customers from a B/D default
- provides insurance up to the $500K per account, but no more than $250K in cash
- each individual account gets coverage
What does the Insider Trading and Securities Fraud Enforcement Act of 1988 prohibit?
Prohibits trading on insider information
What are the penalties for insider trading?
- ) Civil - 3X the profits made or losses avoided
2. ) Criminal - Fine up to $5 million and/or 20 years in prison
What is misappropriation of information?
someone uses non-public info to trade on a company other than their employer
What does a statutory disqualification result in?
Person can not be associated with a member firm in any capacity unless he/she has a FINRA waiver
When is an amended U-4 required and when must it be filed? What is filing deadline for conviction of a crime?
- ) anytime information on a U-4 changes
- ) Must be filed within 30 days
- ) Conviction of a crime: 10 days
What is a rep who has lapsed on his/her Regulatory Element training? What is the consequence?
CE Inactive / can not function or be paid as a registered rep
OSJ must have what type of registered person in place?
S-24 registered person
What does selling securities outside of the jurisdiction of their firm require?
- ) Notification
- ) Supervision
- ) Permission if compensation is received
When do transactions for personal accounts at another B/D require notification?
must be done before the initial transaction in the account
What are three requirements for sharing in personal accounts?
- ) require permission from the firm
- ) permission from the account
- ) gains and losses must be in proportion to each contribution
When are loans to registered reps from customers permitted?
- ) If firm has supervisory procedures in place
- ) Loans from family members, banks and individuals whom broker has business/personal relationship outside of any business relationship
What two actions must happen if a customer has a written complaint?
- ) Must be forwarded to a principal/supervisor
2. ) Must receive a written response via an investor brochure
