study

Question 1

rule 144

Answer 1

regulates sales of restricted securities, regulates sales to QIB

Question 2

Regulation D

Answer 2

sets regulation for raising capital through private placement, regulates sales to accredited and institutional investors

Question 3

When do securities need to be paid for in cash acc?

Answer 3

Within 2 days of settlement of transaction

Question 4

What doesn’t 5% mark-up apply to?

Answer 4

trades requiring prospectus (new issues, mutual funds) or transactions with an exempt security (muni bonds)

Question 5

When do Privacy notices have to be sent?

Answer 5

sent when account is opened, and an updated version annually

Question 6

Public offering price =

Answer 6

NAV * sales charge

Question 7

Are automated book-entry changes in ownership of securities a responsibility of clearing corps?

Answer 7

No

Question 8

Who are 529 plans sponsored by? What can you pay for with them?

Answer 8

sponsored by states, administered by 3rd parties. K-12 education. plus college.

Question 9

How often do broker dealers need to send balance sheet to customers?

Answer 9

every six months, and upon request

Question 10

what is a face amount certificate company?

Answer 10

Company issue certificates of the installment type, investor receive periodic payments and receives a fixed sum at the end of the period

Question 11

What gifts to member firms need to keep a record of?

Answer 11

all of them, > $100 not allowed

Question 12

When can BDs make calls?

Answer 12

b/t 8AM-9PM

Question 13

what are probate fees?

Answer 13

cost associated with establishing validity of a will, not a disclosure item for VAs

Question 14

What happens when a VA contract holder dies during accumulation period?

Answer 14

the proceeds in excess of cost are taxable to the beneficiary as ordinary income

Question 15

Does kind of customer factor into the fairness of a firm’s markup?

Answer 15

No

Question 16

Does MSRB have enforcement poweres?

Answer 16

No

Question 17

How long can a BD hold mail without valid reason?

Answer 17

3 months

Question 18

Limit, vs buy/sell stop

Answer 18

Limit - buy at price or lower, Buy stop - buy at price or higher, becomes a market order when price hits that point

Question 19

How does a payment check for a joint account (husband wife) need to be addressed?

Answer 19

to both husband and wife

Question 20

3 types of investment copmanies?

Answer 20

Face amount certificate companies, unit investment trusts, management companies (open-end, closed-end funs)

Question 21

what is a unit investment trust?

Answer 21

offers a fixed portfolio, as redeemable units to investors. not actively managed so fees lower, plus no board of directors or investment advisor. advised by trustee

Question 22

do Limited partnerships qualify for 403(b) investments? what is a 403(b)?

Answer 22

No, annuity plan for public workers

Question 23

Are institutional investors subject to FINRA suitability requirements?

Answer 23

Yes, but less stringent than to normal

Question 24

Are govt agency issues exempt from registration under securities act of 1933?

Answer 24

No, not general obligations of fed govt. Only Ginnie Mae is guaranteed, not freddie or fannie mac

Question 25

who distributes interests in a DPP?

Answer 25

Syndicator (Underwriter)

Question 26

What is the primary disclosure document for muni offerings?

Answer 26

the official statement

Question 27

what do board of directors have control over for stock distributions?

Answer 27

only dividends, but need shareholder approval for stock splits

Question 28

Maxi contribution to IRA?

Answer 28

less of 100% of earned income and $6k

Question 29

Requirement to be an institutional account

Answer 29

assets > $50MM