Securities 6 Flashcards
Fill or Kill (FOK)
execute entire order immediately or cancel entire order
Immediate or Cancel (IOC)
execute any portion available immediately
Cancel any balance remaining
All or None (AON)
Execute all if available
If entire order can not be executed hold order as good till canceled (GTC)
Markup Policy
Guide for listed and unlisted transaction charges
Applies to markups, markdowns, and commissions
Order tickets
Approved by principal promptly after execution
Changes to tickets must be approved by a principal
Order flow after execution
- ) Order department or wire room: After execution order with trade details return to order department
- ) Purchase and sales: issues confirmation with trade details to customer
- ) Margin department: calculates any margin requirement due
- ) Cashier: takes receipt and delivery of cash and securities
Regular way (Corporate and municipal)
Trade date + 3 business days (T + 3)
Regular way (Government)
Trade date + 1 business day (T + 1)
Cash
Same day; BD approval required
Receipt or delivery vs. payment RVP or DVP
Up to 35 calendar days
Seller’s option
No sooner than first day after regular way (4th business day for corporate and municipal); no later than date specified in settlement contract
Book value
Net worth - (preferred and intangibles)
Working capital
CA - CL
Current ratio
CA/CL
Total capitalization
Long term debt + net worth
Debt ratio
Long term debt/Total capitalization
PE
CMV/EPS
Dividend payout ratio
Common dividends/EPS
Securities Act of 1933
Paper act, prospectus act
regulates new issues, requires registration of securities
Securities and Exchange Act of 1934
People and places act
regulates BD and associated persons, requires registration
antifraud provision, defined inside information
Trust Indenture Act of 1939
Applicable to corporate bond offerings of greater than $5 million in 12 months
Establishes a contract between the issuer and the trustee for the benefit of the bondholder
Investment Company Act of 1940
Classified three types of ICs
Regulates ICs
Investment Advisors Act of 1940
Requires the registration of investment advisors who charge fees for investment advice
Securities Investors Protection Act of 1970
Protects customers from BD failure and insolvency up to a maximum limits for both cash and/or securities
Created the Securities Investors Protection Corporation (SIPC)
Insider Trading and Securities Fraud Enforcement Act of 1988
Specifies penalties for inside trading and securities fraud
The Employee Retirement Income Security Act of 1974 (ERISA)
Established to prevent abuse or misuse of pension funds
Applicable to private sector retirement plans
Mandates guidelines for plan; participation, funding, vesting, communication, nondiscrimination and beneficiaries
