Unit 1 Supervision of Registration of the BD and Personnel Management Activities Flashcards
Foreign associates of a member firm who are noncitizens and who conduct all business outside the US must
be registered with FINRA but are exempt from passing a qualification examination
Required information on Form U4 includes
a 5 year residency history and 10 year employment history
If an individual fails a qualification exam 3 straight times, a 4th attempt may not be made for
180 days
A member firm may grant discounts, concessions, or other allowances to
a foreign nonmember ineligible for FINRA membership but registered with its country’s SEC approved regulatory authorities
A registered person leaves the industry and, 18 months later, reassociates with another member firm. Under FINRA rules, this person’s cycle for determining the dates for the regulatory element of continuing education is based on
initial registration date
Before signing Form U4, a principal must verify the applicant’s employment history for the previous
3 years
Under FINRA rules, amendments to FORM BD must be made within
30 days of any change
Under FINRA rules, which of the following must be registered as principals?
Managers of an OSJs
An individual will be statutorily disqualified from registration with FINRA if convicted of money or sec related fraud within the previous
10 years
A Series 6 license holder is permitted to sell
- mutual funds
- closed end funds as a new issue
- unit trusts
A RR leaves the BDA to join BDB. Which are true regarding U5?
- BDA must file Form U5 and FINRA
- BDA must provide a copy to its former employee
A member firm may join with a nonmember in
underwriting exempt sec
Under FINRA rules, a RR must complete the regulatory element of continuing education within how many days of a registration anniversary date?
120 days
A member firm files Form U5 with FINRA for a former employee. 2 years later, the member learns of facts that would cause the information filed to be inaccurate. Under FINRA rules, the member must file an amended Form U5 within
30 days
Which are true regarding various forms that BD use in the sec business?
- Form MC-400 is used when employing a statutorily disqualified individual
- Form U4 is used to register an associated person
Investors wishing to investigate the registration history of the RR handling their account would do so by going to the Broker Check program at
the CRD
A RR with your firm terminated her registration for personal reasons. Now, 16 months later, she wishes to return to work. Which are true?
- She does not have to retake the exam
- She must file a new Form U4
All are true relating to a FINRA member firm’s executive representative.
- the individual must be a member of the firm’s senior management
- the individual must be registered as a principal
- changes to the executive representative must be noted in writing to FINRA
You are interviewing a potential RR. She indicates that she previously was employed by another FINRA member firm. You ask for a copy of her Form U5 and are told that she has lost it. You would be able to obtain a copy from.
the CRD
A registered principal voluntarily terminates his registration. Should a complaint surface relating to activity occurring while he was registered, FINRA would have jurisdiction for a period of
2 years
A candidate for registration with your firm fails to indicate on Form U4 that he was once arrested for embezzlement. The charges were eventually dropped when the guilty party admitted to the crime. Several months later, this matter is brought to your attention. You should
require the individual to file an amendment to Form U4
Jim, one of your RR, wishes to pursue a financial degree at a nearby community college. Your firm has expressed willingness to rehire him when he returns with his degree. He worked very hard to obtain his Series 6 license and wants to know how to keep it current while he is in school. You tell him
His license will terminate when he leaves the firm, but if he returns in 2 years or less, he need not retake the exam
You have just hired a new RR who is 21 years old. You must verify his employment record for the last how many years?
3 years
A RR who does not complete the regulatory element of continuing education within the prescribed time frame
may not perform any of the functions of a rep until the Regulatory Element is satisfied
A RR leaves the industry to accept a position as a finance professor. The rep must requalify by examination to return to the industry if he is unaffiliated with a BD for more than
2 years
The Code of Arbitration would handle
disputes involving a member and the public if brought by the public customer
If a member wishes to merge with another member, FINRA must be notified
at least 30 days prior to the closing date
Investors wishing to investigate the registration history of the RR handling their account would do so by going to the Broker Check program at
www.finra.org
You have hired a Tier 1 individual. This will involve an annual charge by FINRA of
$1500
A newly registered introducing BD refers business to another registered BD that has a line of business approve in its FINRA membership agreement. The referring BD
may share in commissions in a broker to broker split
After being expelled by the NYSE, a firm may NOT be granted membership in FINRA if it files Form BD and a Form U4 for each associated person. True or False?
True
A restriction agreement prohibiting certain activities of a member firm remains effective throughout the life of the firm. True or False?
True
Member firms are obligated to notify FINRA 30 days prior after merging with or acquiring another member firm. True or False?
True
Member firms are obligated to notify FINRA promptly, but not later than 30 calendar days if one of its associated persons is subject to a customer complaint alleging theft. True or False?
True
If a member firm fails to pay fees and assessments in a timely manner, its membership may be revoked or suspended upon 21 days’ written notice from FINRA. True or False?
True
Allows the holder to sell only corporate sec
Series 62
Allows the holder to enter unsol orders, provide quotes, fill out new acct forms, and update client information but not make recommendations or solicit business
Series 11
Allows the holder to sell general sec but not commodities
Series 7
Allows the holder to supervise the member’s options business; all members engaged in option transactions must have at least one
Series 4
Allows the holder to supervise most activities of a member firm, including trading, market making, investment banking, and sales; also may approve public communications
Series 24
Allows the holder to sell investment company products sold with a prospectus
Series 6
Allows the holder to supervise transactions in municipal sec; all member firms engaged in muni business must have at least one
Series 53
Allows the holder to supervise transactions in municipal funds sec only
Series 51
Allows the holder to act as a Compliance Official
Series 14
Allows the holder to act as a municipal sec rep and is an acceptable prerequisite test for the Municipal Securities Principal Exam
Series 52
An amendment to Form U4 involving possible statutory disqualification requires submission of an amended form
within 10 business days
If a member learns that information it filed on Form U5 is inaccurate or incomplete, it must file an amended Form U5
within 30 days
All of the the following may be SROs in the sec industry
- FINRA
- a registered stock exchange
- a registered clearing agency
A stock exchange member firm that wishes to join FINRA must submit Form BD to which of the following?
FINRA’s district office where the applying firm has its hold office
Which of the following must FINRA member firms that hold customer funds or sec supply to their customers at least once per calendar year?
- FINRA’s BrokerCheck hotline number
- FINRA’s website address
Any of the following individuals would be an associated person of a registered BD firm
- a partner
- a RR
- a principal
Not file clerks
Application for FINRA membership carries with it the firm’s agreement to do which of the following?
Comply with federal securities laws
A member firm may be suspended or barred from association with FINRA members for which of the following?
Failure to pay dues
