Series 24 - Session Five Flashcards
What is regular way settlement?
3 business days T+3
What is cash settlement?
Just means same day
What is seller’s option?
If the seller (for good reason) cannot deliver by settlement date, he must comunication his intent to delivery at least one day prior to delivery
When stock is borrowed between members what three things apply?
1) dividends are paid to the lending dealer; 2) market to the market daily 3) returnable on demand
For clearly erroneous trades, the member must notify NASDAQ market operations within what time frame?
30 minutes
For clearly erroneous trades, appeals to market operations review committee must be made within what time frame?
30 minutes
What constitutes “good delivery”?
1) at buyers office 2) accompanied by a packing slip 3) properly assigned 4) Round lots 5) partial delivery ok
Bonds subject to a partial call are considered good delivery or not good delivery?
not good delivery
Bonds subject to whole call are good delivery or not good delivery?
good delivery
Reclamation deals with inadvertently accepting delivery of non in good order. What is the standard time frame for reclamation?
15 days
What is rejectable?
1) torn, mutilated or no signature guarantee 2) if delivery is made prior to the settlement date
What is a “when-issued” contract?
A written agreement between members to buy or sell a security prior to issue
How do you calculate accrued interest?
360 day year/ 30 day month
Do you include or exclude the last interest date and the settlement date in calculating accrued interest?
1) include last payment date 2) up to but not including settlement date
Accrued interest is added with which side, the buy side or the sell side?
added to both
A buy in is when securities are not delivered to the buying member on the settlement date. When can a buying member close out the position?
1) earliest is the 3 business days after settlement 2) seller must give 2 business days written notice
Sell out occurs when the payment is not made to the selling member. When can the selling member close out the position?
Any time after the settlement date and no notice is required
For dividends, all dates are set by the issuer except what date?
the ex-date is set by the SRO
What is the ex-date?
2 business days prior to the record date. if you buy on this date or later, you will not get the dividend
What are ADRs?
American Depository Receipts
What is the purpose of ADRs?
to facilitate the trading of foreign securities in the US market
When is the first date a stock trades without a due bill attached?
the ex-date
When selling stock short on the ex-date, who gets the dividend.
the stock lender
What are the characteristics of ADRs?
1) UPC delivery rules apply 2) dividends are declared in the foreign currency but paid in US dollars 3) holder has currency risk 4) holder can demand delivery of underlying shares 5) no pre-emptive rights 6) no voting rights
For internal foreign securities what delivery rules are used?
those of the country where the security principally trades
