Sales and Supervision Flashcards
All FINRA applicants must have a least two officers qualified to become…
Registered as Principals (except sole proprietorships)
Firms that transact business in NONexempt securities must…
Register with FINRA & the SEC
If an associated person is denied registration, suspended, or expelled by another SRO, ____________ must be notified promptly. There is no requirement to notify the ___________.
A firm that has been expelled by any SRO and wants to become a member of FINRA will be…
- FINRA
- SEC
- statutorily denied membership to FINRA.
When must a firm notify FINRA that it has had a material change (i.e. plans to merge with another member firm)?
30 days prior to the merger
Small events that occur at member firms (such as branch openings and changes of address) require what type of notice?
notification within 30 days
A firms membership may be revoked by FINRA if fees are not paid within…
15 days written notice from FINRA
A LIMITED representative (series 6) may only sell products accompanied by a prospectus. For example, they may only sell closed-ended funds as a new issue, once the funds trade in the secondary market and are no longer accompanied by a prospects, one must have…
a series 7 or 62 and be considered a General Securities Representative.
Original signatures on the U4 are needed… When?
With initial submission and with any change to any of the DRPs (disclosure reporting pages).
When changes are made that require disclosure on your U4, the changes must be filed with the Central Registration Depository (CRD) when?
within 30 days
If an amendment to the U4 involves a statutory disqualification, suspension, violation, or fine in excess of $2,500 it must be reported…
within 10 business days.
A member will automatically be statutorily disqualified if they have been convicted of a securities misdemeanor or any felony within…
the last 10 years
From U5 must be filed within how many days of termination?
30
When an employee leaves a member firm, the firm has 30 days to file the employee’s U5 with FINRA and to provide a copy to the ex-employee. The employee’s new firm must get a copy of the U5 from whom?
FINRA or the new employee, NOT the old employer.
A newly hired employee must provide a copy of their U5 to the new employer… when?
within two business days of the request.
If a person is no longer associated with a firm, they may still be subject to a complaint filled against them as long as the complaint is filed…
W/in 2 years of the associated person leaving the firm.
When must the CE Firm Element be completed?
annually
When must the CE Regulatory element be competed?
Within 120 days of the second registration anniversary and every three years after.
FINRA Rule 4370: Business Continuity Plans must be provided to customers… (3)
upon account opening, posted on the website and emailed upon request.
FINRA Rule 4370: With the BCP the firm must designate how many emergency contacts?
If this info changes, it must be updated…
2
promptly
What are the industry’s SROs? (4)
Self Regulatory Organization:
- FINRA
- MSRB
- Exchanges
- Clearing Agencies
What 6 rules apply to an RR on military leave?
- Inactive Status
- 2 year clock paused
- CE Requirement Suspended
- May not be RR
- Can only receive commissions already on the books
- re-register within 90 day of return then clock starts again.
- If tape recording is needed at a branch office, the procedures and equipment must be in place…
- If the firm does not wish to be subject to the taping rule it has 30 days to…
within 60 days.
Fire people to get below thethreshold
What do the “Taping Rule” thresholds look like?
5-9 employees = 40% from disciplined firms
10-19 employees = 4 from disciplined firms
> 20 employees = 20% from disciplined firms
When must a firms CEO certify that the firm has a CCO and proper supervisory procedures in place?
Annually
Under FINRA rule 9522, the Dep. Of Member Regulation may decide (without a hearing) to allow a SD (stat. disc.) individual to remain associated by ________________. If the Dep. Of Member Regulation does not do this, the sponsoring firm has the right to take the matter to _______________.
- Becoming clerical only
2. NAC (National Adjudicatory Council) = a FINRA committee
The request to employ a SD (stat disc) person is made on form __________ and filed with _____________.
- Form MC400
2. Dep. Of Reg & Disc (RAD)
Any member party to a transaction with securities of another member firm must, upon written request, provide that member with a copy of its most recently prepared _________________.
Balance sheet.
Commodity Futures are not considered securities, and so are not regulated by FINRA, they are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). What type of registration is needed to offer commodities to the public?
3 or 31
As the result of an SEC report which concluded that some NASDAQ market makers were manipulating the market, they created which series registration?
Series 55 - OTC equity trader
An individual who took on principal duties at a member firm has __________ days to take and pass a principal exam or be subject to FINRA sanctions.
90 days