UNIT 30 CHECKPOINT EXAM Flashcards
Which of these is the most appropriate action for a registered representative to take after receiving a written complaint letter from a client?
A) Place a telephone call to the client to resolve the issue.
B) Forward the complaint to FINRA and maintain a copy in the representative’s records.
C) Turn the letter over to the representative’s supervisor.
D) Commence a thorough investigation and provide a report of the results to the representative’s employer.
C) Turn the letter over to the representative’s supervisor.
Explanation
Representatives receiving a written customer complaint are required to turn the complaint over to their supervisor immediately.
Five years ago, Tom, a resident of State A, was convicted of driving under the influence (DUI). At the time, the conviction was considered a misdemeanor. Last year, State A’s legislature made DUIs a felony. Which of these is true for Tom when filing his Form U4 for registration with a member firm?
I. Tom must indicate that he has been convicted of a felony.
II. Tom would not have to list the conviction.
III. Tom would be subject to statutory disqualification.
IV. Tom would not be subject to statutory disqualification.
A) II and IV
B) I and IV
C) I and III
D) II and III
A) II and IV
II. Tom would not have to list the conviction.
IV. Tom would not be subject to statutory disqualification.
Explanation
Nonsecurities-related misdemeanors do not have to be reported on the applicant’s Form U4. Even though the DUI violation is now a felony, Tom’s record shows he was convicted of a misdemeanor. If it had been a felony five years ago, it would have to be disclosed on the application and could make Tom subject to statutory disqualification.
The SEC implemented which of these requirements to lessen the possibility that a broker-dealer applicant may not disclose their criminal past during registration to potential employers?
A) filing of a fingerprint card with the SEC.
B) obtaining a credit report from at least two recognized credit reporting agencies.
C) filing of a fingerprint card with FINRA.
D) filing of a fingerprint card with the U.S. Attorney General.
D) filing of a fingerprint card with the U.S. Attorney General.
Explanation
Because certain crimes result in statutory disqualification from association with a member firm, sometimes applicants do not disclose everything on their applications. If there is a criminal record, more than likely it will appear through a fingerprint search. The card is filed with the U.S. Attorney General.
Which of these would not make Nikki subject to a statutory disqualification?
A) Eight years ago, Nikki was charged with a misdemeanor involving securities fraud.
B) Eight years ago, Nikki was convicted of felony assault in a fight.
C) Nikki made a false statement on the U4 Form.
D) Nikki was barred from the industry by the securities administrator of Wyoming.
A) Eight years ago, Nikki was charged with a misdemeanor involving securities fraud.
Explanation
A charge does not mean a conviction. A conviction of any felony is disqualifying, as is being barred by a state or federal authority. FINRA does not take well to lying on your U4.
An applicant completing Form U4 would not be required to list their
A) legal name and any aliases used.
B) date of birth.
C) employment history for the past 10 years.
D) residential history for the past 10 years.
D) residential history for the past 10 years.
Explanation
The Form U4 requires residential history for the past 5 years only. Employment history for the past 10 years, legal names and any aliases used, and the date of birth are all examples of required information on Form U4.
A FINRA member broker-dealer has a new hire with the sole responsibility of training associated persons. She will not have any dealings with the firm’s customers. In order to hold this position, the new hire
A) must register as a principal.
B) does not need to be registered as this job is strictly administrative.
C) must only register as a registered representative.
D) would only have to register as a registered representative if she dealt with customers.
A) must register as a principal.
Explanation
An individual who trains people to supervise, solicit, or conduct business in securities must be registered as a representative. However, an individual must be registered as a principal with FINRA when they are involved solely in training associated persons.
Sam has decided to change careers and become a financial services professional. While reading about the Form U-4 she discovers which of these are true?
I. Completion of Form U4 is not required for taking the SIE.
II. Completion of Form U4 is required for taking the SIE.
III. Form U4 is only required when taking a top-off exam.
IV. Form U4 must be updated promptly when required information changes.
A) I and IV
B) I and III
C) II and IV
D) II and III
A) I and IV
I. Completion of Form U4 is not required for taking the SIE.
IV. Form U4 must be updated promptly when required information changes.
Explanation
The Form U4 is not required before sitting for the SIE. The form is filed when associating with a member firm and must be updated promptly when U4 requires information changes. Note that the phrasing in option III states “only required when taking a top-off exam”, this is inaccurate because Form U4 must be kept current at all times, not just during top-off exams.
Patrick the intern, who has passed the SIE but is not yet registered, is sitting at the front desk greeting customers and answering the phone. During the course of an hour, he interacts with several customers and prospective customers. Which of these activities might be a rules violation for Patrick?
A) Providing current quote information on a stock in response to a customer’s request.
B) Directing a walk-in prospect to the information kiosk.
C) Having a customer take a seat while a representative comes out to escort the customer into a meeting.
D) Asking if a prospect would like to attend a seminar.
A) Providing current quote information on a stock in response to a customer’s request.
Explanation
Activity directly related to investment sales and solicitations, including quotes, is the activity of a registered person. The other activities are acceptable for a nonregistered person.
A broker-dealer has hired an individual for the position of a registered representative. The individual is struggling to pass the necessary qualification exam and has failed four times. After that fourth failure, the applicant faces a waiting period of
A) 30 days.
B) 90 days.
C) 60 days.
D) 180 days.
D) 180 days.
Explanation
If an individual fails the qualification exam, the waiting period before the next attempt is 30 days following the first two unsuccessful tries. Once failing a third time, each successive attempt requires a 180-day waiting period.
Which of these is not information requested on Form U4?
I. Education
II. Professional designations
III. Marital status
IV. Current residence
A) II and III
B) I and IV
C) I and III
D) I and II
C) I and III
I. Education
III. Marital status
Explanation
Form U4 does not ask about marital status or education. Current residence is a required field, as are any industry related professional designations like CFP, CPA, or CFA.
