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Series 6 > S6: Marketing, Prospecting, & Sales Presentation > Flashcards

S6: Marketing, Prospecting, & Sales Presentation Flashcards

1
Q

Sale Literature

A

means any written communication generally available to the public, other than advertising, and must be accompanied by a prospectus

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2
Q

Selling Away

Private Securities Transaction

A

Engaging in a private securities transaction without first notifying your firm is a violation

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3
Q

Private Securities Transactions

A
  • it is a violation of any NASD/FINRA rules for any person associated with the member firm to engage in Private Securities Transactions outside the firm is regular course of business without first informing their member in writing
  • if APPROVED the transaction must be recorded on the books and records of the registered representatives firm & the firm shall supervise the persons participation as if it were executed on behalf of the member
  • if DISAPPROVED the registered representative shall not participate in the transaction email her
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4
Q

Outside Business Activities

A
  • no registered person of a member firm shall be employed by, or accept compensation from any other person as a result of any business activity, OTHER THAN PASSIVE
  • prompt WRITTEN notice is required
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5
Q

Advertising is defined as:

A

any materials designed for use in the public medium to solicit business, such as radio, TV, newspapers etc.

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6
Q

Statement of Additional Information

SAI

A

-must be given (in addition to a prospectus) to any client upon request

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7
Q

Advertising Rules

A
  • any written communication used to solicit the issues MUST be accompanied or proceed by a prospectus
  • may NEVER contain an application to invest
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8
Q

Omitting Prospectus Rule

A
  • permits material used prior to prospectus delivery
  • such advertisements may NEVER contain an application to invest and must contain information regarding how to obtain a full prospectus
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9
Q

Communication Categories

Institutional Communications

A

-includes written (including electronic) Communication that is distributed or made available only to institutional investors

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10
Q

Institutional Investors

A
  • bank
  • investment advisor registered with the SEC
  • any other entity with total assets of ate sat 50 million
  • govt entity
  • an employee benefit plan that has at least 100 participants
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11
Q

Communication Categories

Retail Communication

A
  • includes any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar day period
  • requires an appropriately qualified registered principal of the member firm to approve each retail communication before the earlier of its use or its filing
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12
Q

Communication Categories

Correspondence Communication

A

-includes any written (including electronic) communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar day period

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13
Q

Record Keeping

Communication Categories

A

-all retail and institutional communications records shall be kept in a separate file for a period beginning on the date of first use an ending 3 years from the date of last use

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14
Q

Broker/Dealers must keep records of all correspondence for _____ years

A

3

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15
Q

Hypothetical Illustrations

A
  • using assumed rates of return may be used to demonstrate the way a variable life insurance policy operates
  • an illustration may use any combination of assumed investment returns up to and including a gross rate of 12% provided that one of the returns is 0% gross rate
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16
Q

Telemarketing

A
  • requires an organization that performs telemarketing to maintain a do not call list of customers who do not want to be called and keep a customer’s name on the list and INDEFINITELY from the time the request is made
  • firms must probably identify themselves via caller ID, transmitting the telephone number, and when available by telephone carrier, the name of the member firm

-

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17
Q

Telemarketing

allowed time to call

A

8am - 9pm (local time at the called persons location)

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18
Q

Firms must follow their own Firm Specific Do Not Call List as well as the National Do Not Call List. The member firm must access the updated national do not call list a minimum every _____ days

A

31

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19
Q

Telemarketing rules do not apply to ______

A

your clients

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20
Q

The Cold Call rules do not apply to a person who has made an inquiry to the firm with in the previous ______ immediately preceding the date of the telemarketing call

A

3 months

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21
Q

Use of FINRA’s Name is ______

A

NOT allowed by allowed but FINRA

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22
Q

Sales literature that contains mutual fund performance information except for money market funds must contain total return data for _______ year periods

A

1, 5 and 10

23
Q

If a firm uses materials to train or educate registered representatives of other broker-dealers (whether affiliated or not) the material would be considered an ________ communication

A

Institutional

24
Q

The firm is required to approve prior to use all _______ communications

A

Retail

25
Q

Testimonials

A
  • If payment of more than $100 made the testimonial must disclose it is a paid testimonial
  • the testimonial may not be representative of the experience of other customers
  • the testimonial is no guarantee of future performance or success
26
Q

Generic Advertising _______ to be be accompanied by a prospects

A

does NOT need

27
Q

Shareholder Statements

(A complete financial statement must be provided ________ & _______ to mutual fund shareholders

A

semi-annually & annually

28
Q

Each OSJ must be inspected ______

A

Annually

29
Q

Each branch office that supervises one or more non-branch locations must be inspected ________

A

Annually

30
Q

Branch offices that do not supervise one or more non-branch locations must be inspected every _______

A

3 years

31
Q

OSJ
(As part of the inspection process a written report must be kept on file regarding each and every inspection for a minimum of ________

A

3 yrs

32
Q

Private Securities Transactions

A
  • new offerings of securities not registered with the SEC
  • new direct participation offerings
  • transactions among immediate family members for which the associated person receives selling compensation
33
Q

Prospectus

A
  • summary of registration statement
  • Must be distributed to investors PRIOR or DURING any solicitation for sale of issuers securities
  • on UNSOLICITED ORDERS, the prospectus must be given out no later than the TIME OF CONFIRMATION
  • updated ANNUALLY
34
Q

When soliciting mutual fund sales, you must give out a prospectus _______

A

at or prior to the time of your face to face sales presentation

35
Q

If the sale is unsolicited, the prospectus must be delivered __________

A

no later than the time of the confirmation which is the day after the trade

36
Q

Reporting Requirements

within 30 calendar days

A
  • has been found to have violated any securities, insurance, commodities, financial
  • and associated PERSON is a defendant in a civil litigation or arbitration and the judgment or award was for 15,000 or more
  • A member FIRM is a defendant in a civil litigation or arbitration and the judgment or award was for 25,000 or more
37
Q

All correspondence or retail communications must include:

A
  • prominent disclosure of the firm’s name
  • when the communication includes other names it must reflect which products and services are offered by the firm
  • disclosure of any relationship between the firm and any nonmember or individual who is also named in the communication

THE DATE THE FIRM BEGAN FINRA MEMBERSHIP IS NOT REQUIRED

38
Q

Securities Act of 1933

A
  • paper act
  • regulates new issues (primary offerings) of securities by the issuer to the general public
  • requires issuer to file REGISTRATION STATEMENT with SEC prior to issuing its securities
  • issuer must prepare a PROSPECTUS
  • the prospectus must be distributed to investors PRIOR to or during any solicitation for sale of the issuers securities
39
Q

SEC Registration Statement

A
  • filed with SEC announcing the intent of the issuer to sell the security
  • after filing, there’s a minimum 20 day cooling off period (no sales may occur)
40
Q

Cooling Off Period

A
  • the SEC will review the registration statement (20 days

- once the SEC has cleared the issue, sales can begin with a prospectus

41
Q

Unsolicited Orders

A
  • the prospectus must be given out no later than the time of confirmation
42
Q

A prospectus is a ________

A
  • summary of the registration statement
43
Q

SEC Registration Statement
(The registration statement is filed with the Securities & Exchange commission announcing the intent of the issuer to sell a security)

After filing, there is a min _______ during which no sales may occur

A

-minimum 20 day cooling off period

44
Q

During the cooling off period, the issuer & underwriting group formed to market the issue may take indications of cust interest concerning the issue.

A ______ or preliminary prospectus may be distributed to prospectus purchasers to solicit interest in the issue

A
  • red herring
45
Q

Sales of the issue are _______ until the issue has been cleared

A
  • prohibited
46
Q

Text Box

A
  • standardized performance info (1,5,10 years)
  • max sales charge
  • annual expense ratio
47
Q

Institutional communication does NOT include a firms _______

A

Internal communications

48
Q

Retail Communications requires an appropriately qualified _______ of the member firm to approve each communication before the earlier if it’s use or its filing with FINRAs advertising

A
  • registered principal
49
Q

Record Keeping Requirements
(All retail & institutional communications records shall be kept in a separate file for a period beginning on the date of first use ending ________

A
  • 3 yrs from the date of first use
50
Q

New Member Firm Filing Requirements
(Requires a firm that has not previously filed with FINRAs advertising regulation dept to file its initial communication with the advertising regulation dept _________

A

-at least 10 business days prior to use

51
Q

The 1 yr filing requirement begins __________

A
  • in the date reflected in the CRD system that the firms FINRA membership becomes effective, rather than on the date a firm first files an advertisement with FINRA
52
Q

The New Member Firm filing requirement ONLY applies to certain broadly disseminated ________ such as generally accessible websites, print media communications, & tv & radio commercials

A

-retail

53
Q

Advertising concerning govt securities ________ have to be filed with FINRA within 10 business days of first use or publication

A
  • do NOT
54
Q

Use of the FINRA logo _______ allowed by anyone but FINRA

A
  • is not

Series 6 (5 decks)

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