Series 79 Day 1 Knopman Marks || with Error-free Solutions.
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Module
Series 79 Day 1 Knopman
Institution
Series 79 Day 1 Knopman
FINRA and SEC Registration correct answers A broker-dealer must register with FINRA and the SEC to lawfully conduct securities businesses. Not an endorsement, and to suggest registration is an edorsement is considered fraudulent and deceptive
Trust Indenture Act correct answers Cannot mandate th...
Series 79 Day 1 Knopman Marks || with Error-free
Solutions.
FINRA and SEC Registration correct answers A broker-dealer must register with FINRA and the
SEC to lawfully conduct securities businesses. Not an endorsement, and to suggest registration is
an edorsement is considered fraudulent and deceptive
Trust Indenture Act correct answers Cannot mandate that a trustee repay all creditors in full in an
event of default because this is not feasible
Cross-default Clause correct answers triggers a debt default if the issuer defaults on any of its
other debt obligations, its purpose is to protect lenders from a default elsewhere in the borrower's
capital structure
Insider Trading correct answers while in possession of insider information, a rep or a
broker/dealer can accept an unsolicited order from a customer to purchase that security but
cannot recommend the security himself or herself
Insider trading - individual correct answers individuals with insider information cannot trade on
that information while it remains undisclosed
Insider trading - firms correct answers Must have procedures in place to prevent insider trading.
Can avoid liability by showing effective supervisory procedures were in place and those
procedures were willingly ignored
Reg FD correct answers Aims to promote the full and fair disclosure of material information to
all investors at the same time. Requires simultaneous access to info for all investors and can be
satisfied through public filings
Reg FD (unintentional disclosure) correct answers If accidentally reveals insider info, has 24
hours or until opening of next trading day (whatever is later) to make a public disclosure
Statutory disqualification correct answers Lasts for 10 years, but a criminal conviction that
happened more than 10 years ago is not ground.
Cannot associate with the firm in any capacity unless the firm receives a waiver from FINRA
An arrest is not grounds for SD; however, banned, expelled, etc., by a foreign issuer is grounds
Form U4 Disclosures correct answers Registers an individual with a firm requires: 10 years of
employment history, firm checks latest 3
SD event - file in 10 days
Otherwise 30 days
, U5 Termination correct answers If a rep leave for terminates association with a firm, the rep has
2 years to reassociate with another member firm before needing to requalify by exams
Must be filed in 30 days of termination
CE Inactive correct answers A rep who doesn't complete regulatory element continuing
education within 120 days of 2nd anniversary, then again every 3 years later is considered
inactive
Selling Away correct answers Private securities transactions without compensation require notice
but not permission.
if future deal flow or future compensation is promised, supervision and permission is required
Private Securities Transactions Examples correct answers Direct sales of securities that are not
SEC-registered
A registered rep at one firm selling securities at another firm for compensation
a registered rep selling limited partnership units to investors on behalf of a client outside of a
firm's supervision
Outside Business Activities (OBA) correct answers A registered rep engaging in outside business
activities or outside employment unrelated to securities industry must provide full details to firm
but permission is not required
Not considered OBA correct answers Volunteering for nonprofit with no comp, etc.
Registered reps can purchase and sell limited partnership units for their own
Borrowing and Lending - No permission required correct answers lending to or borrowing from
customers who are family members or institutional banks
Borrowing and Lending - Permission required correct answers written pre-approval required
lending to or borrowing from customers for whom the loan is based on an outside business or
personal relationship and the loan is unrelated to the brokerage account
Gifts correct answers Gifts to a client or registered reps at other firms are limited to $100 per
year. Events where the reps attend are considered entertainment, not gifts
Joint Account correct answers a joint investment account between a rep and a client requires the
firm's permission and that the sharing be in proportion to each person's financial contribution to
the account
Recordkeeping correct answers Required to maintain records for 3 years from the date of last us;
for the first two years they must be kept in an easily accessible location
Exception is the prospectus
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