Unknowns 5 Flashcards
Typically, investment companies are allowed no more than ____ days from request to complete a redemption.
7 days
Regulation M-A relaxes communication restrictions between broker-dealers and investors prior to the filing of statements in the case of ________________.
-cross-border mergers
-tender offers
-rights offerings
-other similar transactions
Generic advertising is not considered an offer to sell, provided it provides
-info on invest co.
securities
investment objectives
various products and services that do not constitute a security subject to registration
-An invitation to inquire for further information
-contains the name and address of the BD or other person sponsoring the communication.
A broker-dealer’s client has posted positive comments on the personal social networking page of a registered representative. What is that considered and not considered?
Posts made by customers, or any other third-parties, are third-party posts.
These are not considered advertising unless the firm becomes entangled or has adopted the third-party content. Since the post is not considered adverting, the positive comments (testimonial) are permitted.
Members who have failed to pay required fees and assessments may have their memberships suspended or cancelled upon _____ from FINRA.
15 days’ written notice from FINRA
When must a broker-dealer receive the signed acknowledgement of the portfolio margin disclosure from a client?
At or prior to the client’s initial transaction
A limited broker-dealer restricts its business to ___________________.
investment company/variable contract securities or direct participation programs
When may a broker-dealer perform the locate when effecting a short sale for its own account?
Prior to executing a short sale order
A broker-dealer executing a short sale in an equity security for a client must perform a locate
Prior to accepting a short sale order
Members are not permitted to execute (either directly or indirectly) any transactions in a security that’s the subject of an IPO until the security has _____________.
begun trading on its primary exchange
BD that receives and holds customer assets is a _____ with a _____ net capital.
carrying broker (general securities firm)
$250,000 net cap
What is considered MOST important for a dealer when determining the markup it may charge to a client on a transaction involving a debt security?
The dealer’s contemporaneous cost in the same security
If the dealer executes the transaction at the same price and charges the customer a markup, the capacity is disclosed as __________.
riskless principal.
A resulting statutory disqualification would only occur if the person is ultimately _____of any felony or misdemeanor involving false reports, fraud, bribery, perjury, crimes related to funds or securities. If just charged with misdemeanor or felony, the RR ________.
convicted
updates their U4
What are the time frames for a BD to receive membership from FINRA?
-FINRA must review and process a BD’s membership application within 180 calendar days.
-If the application is found to be deficient after preliminary review, the applicant is given 5 days to correct the deficiency.
-If the application is deemed substantially complete, FINRA staff is allotted 30 days to complete its review and determine whether more information is needed.
-If additional information is required, the FINRA staff must issue a written request within this time frame.
-The applicant will then have 60 calendar days to fully respond to FINRA’s initial request for additional information.
Who is responsible for sending issuer communications to objecting beneficial owners for stock held in street name?
The broker-dealer
The broker-dealer is not permitted to release confidential, personal information of objecting beneficial owners to issuers. As a result, the broker-dealer would receive the information and forward it to the beneficial owners.
Pattern day trader
-4 or more trades in 5-day period
-minimum equity requirement: $25,000
-minimum must be maintained always
-margin call must be met w/in 5 bdays
-call not met, client restricted to cash-available basis for 90-days until call met
-closing transaction is cash-available basis
If an order is filled, which time stamps must appear on the order ticket?
time entered
time executed
Regulation X
U.S. person who’s acquiring credit from a non-U.S. lender to purchase U.S. securities
SEC Rule 605, market centers must disclose execution quality statistics monthly in regard to order executions. This information includes:
-Effective spreads
-Execution comparison of market orders to public quotes
-The execution of orders:
-price improvement
-disimprovement
-fill rates
-execution speed
A stopped order is best described as:
A price guarantee for a customer’s order
order that’s received from a customer (typically an institution) which will be executed at no worse than the contra-side price at the time the order was stopped, with the understanding that the order may receive a better price.
The haircut on readily marketable equity securities is _______.
If there is a limited market for the security, with only two market makers providing quotes, the haircut required would be _______.
15%
40%
A broker-dealer may close out positions in a customer’s margin account if?
The equity falls below the $2,000 requirement in a SHORT account
DVP transactions in non-exempt securities (e.g., corporate bonds) settle on ______. BD has _______ calendar days to ______ of the security
T+1
35 calendar days to complete the delivery of the security