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Series 24 - More Questions > Series 24 More Questions > Flashcards

Series 24 More Questions Flashcards

1
Q

What supervision can investment bankers provide to research analysts?

A

None. They cannot supervise them nor approve research reports.

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2
Q

Who sets the exdate?

A

FINRA

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3
Q

Unit Trusts are not filed with

A

Corporate Financing Department

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4
Q

Shelf registration for WKSI is effective when and updated how often?

A

Effective immediately;updated every 2 years

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5
Q

ACT is not an execution system. It includes what 3 things?

A

1) public report on last sale info 2) equity securities traded OTC; 3) monitor and review trades

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6
Q

If the member is a market maker is required disclosure for _____ but is not required on what?

A

It is not required on order tickets but is required on confirmations

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7
Q

What is the Manning Rule related to?

A

limit order protection

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8
Q

SIPC insures up to what?

A

$500,000 per separate customer. An account for John; and account for Lynne; and an account for Lynne & John are considered three separate customers for the purposes of SIPC

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9
Q

Who does the DMM work for?

A

the member firm

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10
Q

Call loan have what kind of interest?

A

fluctuating

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11
Q

What is a booster shot?

A

A research report issued on or around the expiration date of the lock up period.

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12
Q

Subordinated loan agreements must be filed when?

A

30 days before effective date

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13
Q

For tenders, what is unique about long positions?

A

You can only tender net long positions

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14
Q

What is not reported to the consolidated tape?

A

NASDAQ

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15
Q

What is the minimum margin requirment?

A

$2,000

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16
Q

What is the benefit to the customer of a margin portfolio account?

A

less maintenance requirements

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17
Q

Who’s signature is not required on the account application?

A

The RR’s signature is not required. Only the Series 24 principal.

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18
Q

Reg S is related to what?

A

US Issuers to non US citizens

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19
Q

What is the requirement for approval of a brochure sent to 25 banking customers?

A

No approval required since it is sent to institutional customers

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20
Q

A public appearances required what kind of disclosure?

A

blanket disclosure each quarter

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21
Q

What results in statutory disqualification of an RR?

A

felontyof any kind

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22
Q

Level I on NASDAQ shows only what to the reps?

A

the best rate

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23
Q

Level II on NASDAQ is for whom?

A

traders who see all quotes

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24
Q

Level III is for whom?

A

market makers

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25
Q

Member firms can contract with a non member on what kind of underwriting

A

nonconvertible bonds

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26
Q

During a cooling off period for an IPO a member can recommend non convertible securities of the issuer. True or false

A

true

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27
Q

what is the formula for calculating interest?

A

Trade Date + Settlement = Settlement Date; Settlement Date - Last Interest Payment = M + D (Mx30)

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28
Q

Draw Chart for Prospectus Delivery Dates for Exchange listed and Non Exchange Listed IP) and APO

A

Exchange - Non Exchange
IPO 25 90
APO n/a 45

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29
Q

Exdate Determination - Anagram

A

DERP - delaration; exdate; record date; pay on date

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30
Q

How often are trial balances prepared?

A

monthly

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31
Q

What are the contribution limits for Roth IRA?

A

$6000 annually in after-tax income

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32
Q

The holding period for restricted stock under Rule 144 does not apply to what kind of stock?

A

unregistered; for private placements; stock options, etc

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33
Q

A transaction in a TRACE eligible bond is made at 6>25 p.m. When does it have to be reported?

A

By 8:15 a.m. the next day - within 15 minutes of opening on the following business day

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34
Q

What are the open hours for the TRACE reporting system?

A

8:00 a.m. to 6:30 p.m.

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35
Q

IRA rollover period is how many days?

A

60

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36
Q

Form 147 must be filed with the SEC how many business days before the effective date?

A

10

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37
Q

All shares in a Rule 147 offering must be what kind of shares?

A

primary shares

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38
Q

Which IRA allows contributions after age 70 1/2?

A

Roth

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39
Q

To be eligible to open a portfolio margin account, a customer must have been approved to write what kind of options?

A

uncovered options

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40
Q

For trades executed during normal hours, how many seconds to cancel a trade?

A

30

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41
Q

If a company wishes to delist from an exchange, who’s approval is required?

A

board of directors

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42
Q

TRACE reports corporate bond trades who quickly to the public?

A

Immediately

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43
Q

Can sales literature be used in a Reg A offering?

A

Yes

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44
Q

If your independent accountant is terminated, how far back do you go to review disputes?

A

24 months

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45
Q

Which 529 plans are not tax deductible and distributions are tax free?

A

Coverdell

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46
Q

what is a principal cross?

A

When a MM buys at 38.80 and simultaneously sells at 38.80 to another customer charging the same mark up and markdown

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47
Q

Under ACT rules if a MM executes a transaction that exceeds the single trade limit of $1 million, how much time does the clearing broker have to accept the trade?

A

15

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48
Q

A risk disclosure statement must be given to customer who are day trades if what?

A

the firm promotes a day trading strategy

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49
Q

Portfolio margin accounts provides what added benefit?

A

lower margin requirements

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50
Q

What is the dollar amount of an sanction for FINRA to report it to the public?

A

10,000

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51
Q

SARs (suspicious activity reports) must be kept for how many years?

A

5

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52
Q

Under FINRA rules, a list of borrowable securities maintained by a member must be updated how often?

A

daily

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53
Q

A SARs report is what dollar amount?

A

$5,000

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54
Q

What requires prior approval?

A

advertising, sales literature and independently prepared reprints; and correspondence to 25 ore more prospective customers in a 30 day period

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55
Q

Correspondence to less than 25 prospects or ordinary communication with customers require what type of approval?

A

Prior or post review

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56
Q

Disciplined firms: how many reps can a firm have without having to record calls?

A

if the firm has less than 4 FC; none can be from a disciplined firm; 5 to 9 = 1; 10 to 19 = 4; 20+ = 20%

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57
Q

What is NOT INCLUDED under the 5% policy?

A

registered secondary offerings

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58
Q

Stabilizing bids require what?

A

1) be in the prospectus; be in at-the market offerings; 3) best efforts underwriting

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59
Q

If there is a trading halt, what happens to market close orders?

A

They are cancelled

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60
Q

If part of an issue remains unsold, who has responsibility for the loss?

A

the underwriting firms

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61
Q

Seller’s option delivery can be no sooner than how many days?

A

4; otherwise there would be no reason since regular way is 3 days

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62
Q

If a company is making a tender offer to buy ABC stock, what kind of ABC stock can be purchased in the open market at the same time?

A

straight debt

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63
Q

A deficiency letter means what?

A

the preliminary prospectus needs to be modified

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64
Q

A Red offering, Rule 504, deals with the sale of securities not exceeding what dollar amount?

A

$ 1million

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65
Q

Reg D offerings are what kind of transactions?

A

exempt

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66
Q

Rule 504 of Reg D deals with private placements in which the dollar amount is less than what?

A

$1 million

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67
Q

Rule 505 of Reg D deals with private placements between what dollar amounts?

A

does not exceed $ 5 million

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68
Q

Rule 506 of Reg D deals with private placements of what dollar amount?

A

more than $5 million - no limit

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69
Q

A customer is long 500 shares of ABC stock in cash and short 200 shares of the same stock in a margin account. If the customer wants to sell the 500 shares in the case account, the order ticket must be markerd as what?

A

sell 300 long; sell 200 short; if the customer is long and short in the same security, they are only long to the extent of the net shares. So the customer has a net long position of 300 shares to sell long + the 200 to sell short

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70
Q

A NASDAQ market maker wasnt to make a market in another issue. How many days does the request need to be submitted to be included in the previous registration?

A

5 business days

71
Q

What two things must be included in the selling group agreement?

A

1) liability for unsold securities 2) to whom concessions will be allowed

72
Q

Do Not Call lists must be honored for a period of how many years?

A

5

73
Q

what is the .t modifier?

A

effected outside the normal market hours

74
Q

Public appearances require a blanket certification for all appearances made for what period of time?

A

quarter

75
Q

Report alleged violations to SEC or FINRA?

A

FINRA

76
Q

Contribution rules?

A

$250 per ELECTION if you are eligible to vote in that election

77
Q

Mergers must be reported to FINRA within how many days?

A

30

78
Q

What is exempt from reporting requirement of outside business activities? give an example

A

Passive investments such as owning a rental property from which the RR receives income

79
Q

IF a stock is delisted from NASDAQ, a MM in the stock can immediately become a BB MM if the MM made a continuous market in the stock during the past how many days?

A

30

80
Q

All non exempt securities including rights and warrants must be registered with who prior to the sale?

A

SEC

81
Q

Communication with the public in considered what kind of rule?

A

conduct rule

82
Q

Notification of a sale under Reg A in the form of an offering circular must be filed with the SEC how many calendar days before?

A

20

83
Q

Reports of sales made pursuant to Reg A must be filed with the SEC how often?

A

every 6 months following the original offerings

84
Q

Subordinated loan agreements must be filed with FINRA how many days prior to the effective date?

A

30

85
Q

Generally, all blotters and records are required to be held for how many years?

A

6

86
Q

How long are manuals required to be kept how many years after termination of use?

A

3

87
Q

A rescission made by a b/d must be accepted or rejected by the customer within how many days?

A

30

88
Q

Members must immediately file a notice with FINRA regarding a complaint against an RR if settled for what dollar amount?

A

$20,000

89
Q

A member must immediately file a notice to FINRA regarding a complaint against the member if settled for what dollar amount?

A

$30,000

90
Q

Manning Rule applies to what kind of orders?

A

limit orders

91
Q

SEC can suspend trading on any exchange for up to how many days?

A

90

92
Q

Issuer directed sales are permitted only if what?

A

the persons to whom the new issue is sold are not restricted?

93
Q

Standby purchases are locked up for how many months?

A

3

94
Q

At maturity, equity linked notes convert to what?

A

cash

95
Q

Simplified arbitration is available for claims of what dollar amount or less?

A

$50,000

96
Q

What is the statute of limitations according to the code of arbitration?

A

6 years

97
Q

In a Reg A offering, the SEC will integrate the current offerings with any security offering of the issuer occurring within the prior how many months?

A

12

98
Q

what orders are reduced on the ex-date for the cash dividends?

A

buy limits & sell stops

99
Q

An established member firms discovers it A:I ratio is more than 12:1. When is notice required?

A

within 24 hours

100
Q

An established firm discovers its A:I ratio is more than 12:1. How is noticed required to be delivered?

A

electronically

101
Q

Limit order protection rules are in effect during what hours?

A

normal business hours and extended trading hours

102
Q

FINRA cannot initiate a trading halt for what kind of securities?

A

listed stocks trading on an exchange

103
Q

Under Reg SHO, securities that have large open short positions at a registered clearning agency are termed what?

A

threshhold securities

104
Q

Advertisements does not have to be pre-filed for what type of securities?

A

DPPs

105
Q

A b/d from time to time enters order through a firm other than its clearing agency. what is this called?

A

a give up relationship

106
Q

Is a website considered advertising?

A

yes

107
Q

Is communication on an electronic bulletin considered advertising?

A

yes

108
Q

Is conversation in an online chat room considered advertising?

A

no

109
Q

To voluntarily withdraw from NASDAQ a firm only has to what?

A

withdraw its quotes

110
Q

Any stock listed on an exchange or NASDAQ is or is not considered a penny stock regardless of price?

A

Is not. Ex; Synovus below $5

111
Q

A firm that wishes to become a MM in a BB stock may avoid filing Form 211 by what?

A

piggybacking is the stock is deemed active

112
Q

A P modifier next to a market maker’s identifier means what?

A

primary market maker

113
Q

Three things about quotes on the OTC BB.

A

1) unpriced indications or interest are allowed 2) foreign securities may be quoted 3) quotes must be firm

114
Q

To register as a MM for the sole purpose of acquiring stock in a 144 transaction as a principal is prohibited. True or False

A

True

115
Q

Control stock is always subject to what kind of restrictions?

A

volume restrictions

116
Q

To sell restricted stock under Rule 144, what two things must be in place?

A

1) adequate information about the issuer must be available 2) the stock must be fully paid

117
Q

Mutual funds 12-b1 plans are reviewed how often?

A

quarterly

118
Q

Accrued interest is added to the buyer or the seller?

A

both

119
Q

The determination of a broker/dealer’s financial failure is made under the provisions of what?

A

Securities Investor Protection Act of 1970

120
Q

Is 10 day notice of shareholder meetings required?

A

no

121
Q

A research analyst can meet with investment banking personnel to discuss a report if what?

A

it must be in the presence of a legal or compliance officer

122
Q

What is not included on the customer credit agreement?

A

a stated rate of interest

123
Q

A form 13- D is required when?

A

when an unaffiliated entity acquires 5% or more interest in an issuer

124
Q

The use of sales literature in a Reg A offering must be accompanied by what?

A

an offering circular

125
Q

The minimum net capital requirement for a carrying firm (clearing firm) is what

A

$250,000

126
Q

Form 144 does not have to be filed by an affiliate if the amount to be sold in any 90-day period is less that what?

A

5,000 shares or less or $50,000 or less

127
Q

What is the purpose of the Corporate Financing Department?

A

to review the fairness of compensation to underwriters

128
Q

What securities are subject to CFD?

A

equities and convertible debt

129
Q

What securities are exempt from CFD?

A

non convertible preferred stock and non convertible debt

130
Q

In questions related to haircuts, If any single nonexempt security in inventory (long or short) exceeds 10% of tentative net capital, an additional haircut at what rate must be taken on the amount the position exceeds the 10% threshold. This rule does NOT apply to exempt securities.

A

15%

131
Q

Fidelity bond is 120% of what?

A

the highest net capital requirement in the previous 12 months

132
Q

When an RR opens an account at another broker dealer, the employing firm must be notified before what?

A

any transaction

133
Q

Securities purchased in a standby offer must be held for how long?

A

3 months

134
Q

Investment advisers must be federally registered if the amount of assets under management is at least

A

$110 million

135
Q

How often do you have to review supervising branches and RRs?

A

at least annually

136
Q

If a market maker’s bid or offer is decremented to zero, and the firm is not using Automatic Quote Refresh, the firm must update its quote and size within how many seconds?

A

30

137
Q

Do employee recruitment ads need approval?

A

no

138
Q

Long market value at maintenance is the market value to which the securities could fall that would put the account at minimum maintenance (25% of market value). The quickest way to make the computation is to divide the debit balance by 0.75. In this example, dividing $16,800 by 0.75 results in a maintenance market value of $22,400.

A

divide the debit balance by .75

139
Q

In an active, competitive market, markups and markdowns are computed from the inside market at what time?

A

at the time of the transaction

140
Q

If a market maker acts as an investment adviser, the Investment Advisers Act of 1940 requires that all transactions in stocks in which it makes a market be effected

A

agency

141
Q

Due to IRS regulations, a priced bid or offer for a what is never firm?

A

DPP

142
Q

The NSDQ identifier is used for what kinds of orders? attributable or non attributable

A

non attributable

143
Q

Tell me two things about the PInks in regard to the stocks that trade on it.

A

They may not meet listing requirements for Nasdaq.

They may trade very infrequently.

144
Q

What does reg FD cover?

A

Regulation FD was enacted to curb the selective disclosure of material nonpublic information by issuers to financial analysts and institutional investors.

145
Q

Under Regulation D, Rule 504 offerings deal with a sale of securities

A

not exceed $ 1 million

146
Q

Repurchase agreements negotiated with customers who have purchased nonexempt securities are

A

prohibited

147
Q

A registered representative at a limited business broker/dealer can purchase a new issue at the POP because why?

A

because a limited business b/d can only trade in mutuals, variables and DPPs

148
Q

The term offering at the market refers to a distribution in which the price to the public on the offering date is set

A

more than once per day

149
Q

Who does not have to file with the CFD?

A

unit trusts

150
Q

What is not entered into Nasdas?

A

unpreferenced orders

151
Q

Fictional names or DBA must be filed with whom?

A

FINRA and SEC

152
Q

The 5% policy does not apply to what?

A

spreads in a new issue

153
Q

partnership roll-up refers to

A

converting an illiquid partnership interest into a more marketable security

154
Q

Under ACT rules, clearing brokers must accept or decline a single trade, executed by a correspondent market maker exceeding the single trade limit, within how many minutes of execution?

A

15

155
Q

In a dispute between a member firm and an associated person over the terms of an employment contract in which the amount in controversy exceeds $100,000, the arbitration panel will consist of

A

2 public arbitrators and one nonpublic arbitrator

156
Q

An unregistered employee of a NYSE member firm has been indicted for alleged violations of the Act of 1934. As branch manager, you should

A

Report to FINRA

157
Q

A customer opens an account with XYZ Discount Securities and signs a loan consent agreement. The member firm is now permitted to

A

lend the customer’s marginable securities

158
Q

Under Rule 101 of Regulation M, securities which are not actively traded but have an ADTV of at least $100,000 and a public float of $25 million or more are subject to a restricted period of

A

1 day

159
Q

In dominated and controlled trading markets, markup is computed based on

A

contemporaneous costs

160
Q

Accrued interest is added to the buyer or seller?

A

both

161
Q

For interdealer trades that are settled ex-clearing, paper confirmations must be sent

A

no later than T+1

162
Q

Your firm is the sole market maker in WXYZ common stock. At month’s end, the stock in your firm’s trading account is valued at $300,000. For net capital purposes, the value of your inventory is

A

0

163
Q

The OTCBB will display an inside market for a stock as long as there is (are) at least

A

2 market makers displaying firm 2-sided quotes

164
Q

Payment for order flow is noted on the customer confirmation. Is it also on the order ticket?

A

no

165
Q

single offer to a nonresident would destroy the exemption provided by

A

Rule 147

166
Q

All of the following are responsibilities of Nasdaq’s StockWatch Department EXCEPT

A

hearing appeals of a Nasdaq decision regarding a clearly erroneous trade

167
Q

Under Nasdaq trading rules, a pegged order to buy

A

tracks the inside bid. and is a limit order

168
Q

Which of the following describes findings under the Code of Arbitration?

A

Binding on all parties involved in a dispute

169
Q

Under the net capital rule, which of the following are considered allowable capital?

A

Common stocka nd Subordinated loans.

170
Q

The letter of intent initiates the underwriting process and is signed by

A

the issuer and managing underwriter.

171
Q

Which of the following statements regarding the OTCBB are TRUE?

A

There are no formal listing standards for inclusion on the OTCBB. In addition, issuers must be current in their regulatory filings in order to remain on the Bulletin Board.

172
Q

If a full-service broker/dealer has been found to have violated numerous MSRB rules, a fine will be assessed by who and paid to whom

A

FINRA and paid to FINRA

173
Q

One of the representatives in your firm has prepared and wishes to send a letter to all of his clients, about 50 in all, describing a strategy he believes is appropriate given recent market turbulence. Which statement is true?

A

Approval by a principal is required in advance of first use.

174
Q

What is a secondary offering?

A

When one or more major stockholders in the corp are selling all or a major portion of their holdings.

Series 24 - More Questions (1 decks)

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