Trading, Customer Accts, Prohibited Activities

Question 1

UGMA & UTMA

Answer 1

Uniform Gift to Minors & Uniform Transfer to Minors Act

Question 2

Under UTMA, the custodian can withhold transfer of property in the account until the the new adult reaches age

Answer 2

25 (or 21 in some states)

Question 3

The custodian has full control over minor’s account and can:

Answer 3

Buy or sell securities
exercise rights or warrants
liquidate, trade, or hold securities

Question 4

Rules of Custodian account

Answer 4

1. only one custodian
2. only an individual can be a custodian
3. a minor can be the bene of more than one account
4. the donor of securities can be custodian or appoint someone else to do it
5. unless custodians, parents have no legal control over a custodian account or securities in it.

Question 5

custodial account may be opened as

Answer 5

cash accounts only

Question 6

a custodian may not purchase securities in an account on

Answer 6

margin or pledge them as collateral for a loan

Question 7

a custodian may loan money to an account but cannot

Answer 7

borrow from it

Question 8

unacceptable IRA investments are:

Answer 8

collectibles (antiques, gems, rare coins, works of art, stamps) life insurnace

Question 9

covered call writing in an IRA is

Answer 9

permitted, because it does not increase risk.

Question 10

rollovers and transfers may be done only:

must be completed within:

Answer 10

once every 12 months. .. 60 days of withdrawl

Question 11

distributions may begin without penalty after age:

distributions before this age are subject to a:

Answer 11

59 1/2.

10% penalty

Question 12

distributions must begin by:

Answer 12

april 1 of the year after the individual turns 70 1/2

Question 13

if distribution after 70 1/2 does not begin by april 1:

Applicable to the:

Answer 13

50% insufficient distribution penalty applies.

amount that should have been withdrawn on the basis of the IRS life expectancy tables.

Question 14

roth ira’s allow

Answer 14

after-tax contributions up to a max annual allowable limit per individual a year.

Question 15

contributions to roth iras are or are not deductible on tax return?

Answer 15

NOT.

Question 16

there are no RMDS required for a:

Answer 16

roth ira

Question 17

A SIMPLE IRA is an _________ retirement plan

Answer 17

employer-based retirement plan offered by small businesses less than 100 employees,

Question 18

SIMPLE acronym

Answer 18

savings
incentive
match
for employees

Question 19

simple iras are often alternatives to:

Answer 19

401(k) plans

Question 20

contributions to a SIMPLE IRA are made..

employers are required to make …

Answer 20

Pretax.

minimum matching contributions

Question 21

403(b) plans are a type of qualified retirement plan available to employees of

Answer 21

public educational institutions.

Question 22

3 stages of money laundering

Answer 22

1. placement
2. layering
3. integration

Question 23

AML red flags

Answer 23

1. customer showing no concern for risks, commissions
2. customer frequently making large deposits of currency or cashier checks
3. large number of wires to 3rd party
4. excessive journal entries between unrelated accounts
5. withdrawals under the $10k CTR threshold, known as STRUCTURING.

Question 24

Firms must file a suspicious activity reports within _____ days of becoming aware of the suspicious trans

Answer 24

30

Question 25

OFAC acronym

Answer 25

Office of Foreign Assets Control

Question 26

For retention purposes, records are generally either

Answer 26

lifetime, 6 yr, or 3 yr records.

Question 27

The 5 six-year records:

Answer 27

1. Blotters
2. General ledger
3. Stock Record
4. Customer ledgers
5. Customer account records

Question 28

customer complaints have to be retained for

Answer 28

4 yrs

Question 29

statements show

Answer 29

all activity in the account since the previous statement
securities positions, long or short
account balances, debit or credit

Question 30

penny stocks are defined as those priced under

Answer 30

$5/share