Securities 7

Question 1

Telephone Consumer Protection Act of 1991

Answer 1

Administered by the Federal Communications Commission (FCC)
Protects consumers from unwanted telephone solicitations
Defines the requirements and limitations applied when making unsolicited calls

Question 2

Bank secrecy act

Answer 2

establishes the US treasury as the lead agency for developing anti-money laundering programs

Question 3

Sarbanes-Oxley Act of 2002

Answer 3

Established enhanced standards for US public company boards, management and accounting firms
Requires SROs in the security industry to establish research analysts conflict of interest rules for its members

Question 4

The Uniform Securities Act

Answer 4

Establishes a framework for state registration

Applies to securities, BD, registered reps, investment advisors, and IA reps

Question 5

Regulation S-P

Answer 5

Enacted by SEC to protect the privacy if customer information
Requires privacy notice describing privacy policies

Question 6

Regulation SHO

Answer 6

Mandates a locate requirement for securities to be sold short prior to the short sale

Question 7

Regulation NMS

Answer 7

Enacted to bring trading and reporting uniformity to US securities markets
Order protection rule prohibits a trade-through
Minimum increments pricing rule establishes minimum price increments allowed depending on the price of the security

Question 8

Regulation A

Answer 8

Small offerings exempt transaction allowing issuers to raise up to $5 million in a 12 month period without full registration

Question 9

Regulation D

Answer 9

Private placement exempt transaction
Up to 35 non-accredited investors
Accredited investors must meet minimum net worth or annual income criteria

Question 10

Retail

Answer 10

available to more than 25 retail investors within any 30 day calendar period

Question 11

Correspondence

Answer 11

available to 25 or fewer retail investors within any 30 calendar day period

Question 12

Institutional

Answer 12

available only to institutional investors

Question 13

.25%

Answer 13

Maximum 12b-1 fee for no load fund

Question 14

1%

Answer 14

100 basis points for bonds
Rule 144 sale volume limit
Maximum 12b-1 fee

Question 15

5%

Answer 15

Markup policy guideline

No more than 5% of a diversified investment company’s assets can be invested in any one company

Question 16

6%

Answer 16

Penalty for excess IRA contributions

Question 17

8.5%

Answer 17

Maximum sales charge for open-end (mutual fund) company

Question 18

10%

Answer 18

penalty for premature IRA distribution
affiliate or control person if owning 10% or more of outstanding shares
Maximum sales charge on public limited partnerships
Maximum amount of one company’s stock that a diversified investment company can own

Question 19

25%

Answer 19

Minimum maintenance for long stock position

Question 20

30%

Answer 20

Minimum maintenance for short stock position

Question 21

40%

Answer 21

Minimum percentage of mutual fund board members that must be non-interested members

Question 22

50%

Answer 22

Reg T
Penalty for insufficient IRA distribution after age 70 1/2
Amount of sales proceeds credited to SMA in a margin account
Required cash deposit when withdrawing stock from a margin acount

Question 23

70%

Answer 23

Corporate dividend exclusion

Question 24

75%

Answer 24

Minimum amount of IC’s assets that must be invested in securities of other issuers for IC to be classified as diversified
Amount of limited partnerships assets that must be identified to be a specific program

Question 25

90%

Answer 25

Minimum of net investment income that a mutual fund must distribute by year end under subchapter M
Minimum amount of profits that must be distributed by a REIT by year end

Question 26

100%

Answer 26

required equity when purchasing new issues, options, and mutual fund shares
amount of non required cash deposit credited to SMA in margin accounts

Question 27

300%

Answer 27

maximum penalty amount of profit made or loss avoided under the insider trading act of 1988