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Series 65 (FIN-451) > Unit 11 > Flashcards

Unit 11 Flashcards

Registration of Broker-Dealers and Agents

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Series 65 flashcards
1
Q

Persons excluded from broker-dealer definition

A

Agents, issuers, banks, trusts

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2
Q

When one can be exempt from registration for a broker dealer

A

If you only generally advertise on the internet without giving recommendations, and don’t follow up with advice or offer securities to those in states you are not registered in

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3
Q

3 criteria that make one not a broker-dealer

A
  1. No place of business in a particular state
  2. Only have clients who are other BDs or issuers in that state
  3. Only work with snowbirds that travel to a particular state
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4
Q

What IA and IAR’s have that broker-dealers and agents don’t

A

de minimus exemption

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5
Q

Agent

A

Any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities

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6
Q

What agents are also referred to as

A

Registered representatives

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7
Q

What NASAA stands for

A

North American Securities Administrators Association

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8
Q

Definition of associated person

A
  1. Any partner, officer, or director of the broker-dealer
  2. Any person directly or indirectly controlling or controlled by the broker-dealer (including some employees)
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9
Q

Employees of a broker-dealer not included in definition of an agent

A

Clerical and administrative employees

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10
Q

If agent give clerical-admin bonuses, are they required to register?

A

No, this is allowable without registration

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11
Q

When do secretaries/sales agents have to register as agents?

A

If they accept transactions or take orders over the phone

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12
Q

Can individuals be in sales at a broker-dealer without being an agent?

A

No

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13
Q

Exempt securities

A
  1. Any security issued/guaranteed by a government
  2. Securities of foreign governments that the US has diplomatic relationships with
  3. any security guaranteed by banks
  4. commercial paper rated in top three categories of $50,000 or more for under 9 months, investment contract associated with employee’s benefit plan
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14
Q

Exempt transactions

A
  1. Unsolicited brokerage transactions
  2. Those between issuer and underwriter
  3. Those with financial institutions
  4. Private placements
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15
Q

Who broker-dealers have to register with

A

Both the SEC and state

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16
Q

Who tells employing firm that agents are “good to go” and registered

A

Administrator

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17
Q

How long records have to be preserved and maintained

A

At least 3 years, 2 years in principal broker’s office

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18
Q

Do tax returns have to be kept and filed?

A

No

19
Q

When brokers dealers must file amendments to documentation

A

Promptly!

20
Q

Can administrator establish net capital requirements

A

Yes

21
Q

Which administration most control is relinquished to in the case of broker-dealers/agents

A

SEC

22
Q

Statutory Disqualification

A

Status that prevents an individual from registering as a licensed securities professional

23
Q

What makes someone subject to statutory disqualification

A

Expulsion/suspension from membership of an SRO, Subjection to regulatory agency denying registration as a broker dealer, conviction of financial dishonesty misdemeanor in the past 10 years, subjection to injunction from a court, violation of federal securities law, Making false/misleading statements in any filing

24
Q

Do civil lawsuits subject people to statutory disqualification

A

No

25
Q

Know this

A

IAs register on the federal level (SEC) or state level, never both.
IARs only register on the state level.
BDs register on the federal level (through FINRA) and the state level.
Agents register on the federal level (through FINRA) and the state level.

26
Q

How many parties must notify Administrator if agent terminates with one broker and signs with another?

A

All 3

27
Q

Do agents need to submit fingerprints for registration?

A

No

28
Q

Surety bonds

A

Promise by one party to assume responsibility for debt obligation of a borrower if that borrower defaults

29
Q

Can a broker-dealer be an individual?

A

Yes

30
Q

What might exempt a firm from posting surety bonds

A

Maintaining of net capital in excess of minimum requirements

31
Q

What happens to agents if broker dealer’s registration is revoked by a state

A

Agent’s licenses are suspended

32
Q

Who broker-dealers must meet capital requirements of

A

SEC

33
Q

When a broker-dealer registers in a state, who all is considered registered

A

Firm, officers, directors

34
Q

Who SEC has jurisdiction over under 1934 Securities Act

A

Exchanges, SROs, broker-dealers, investment advisers, associated persons

35
Q

When representative registration expires

A

December 31st of each year

36
Q

Do applicants have to post that they are applying in a newspaper?

A

Yes, if administrator requires

37
Q

What administrator may require broker dealers to keep record of

A

Account ledgers
Correspondence
Papers and memoranda
Blotters and books

38
Q

What information is required on an application for registration as an agent?

A

Any felony convictions, citizenship information

39
Q

In what states must broker-dealers register?

A

Those where they serve individual investors

40
Q

Do Canadian broker-dealers need to register in each state a client travels to?

A

Yes

41
Q

The administrator, with proper notice, may examine the financial records of which of the following persons registered in his state?

A

Broker-dealers and investment advisers

42
Q

The document that provides the Administrator with limited power of attorney to accept documents issued in investigation of registrant

A

Consent to service of process

43
Q

When an agent registered in one state may solicit business in another state

A

When both the agent and the employing broker-dealer are properly registered in the other state

44
Q
A

Series 65 (FIN-451) (21 decks)

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