A registered representative is moving to a new broker-dealer. If her customers have filled out the transfer request forms, the following is true: correct answers The carrying firm is permitted to contact the customer
If a customer is required to take a RMD from his IRA, what are the requirements...
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A registered representative is moving to a new broker-dealer. If her customers have filled out the
transfer request forms, the following is true: correct answers The carrying firm is permitted to
contact the customer
If a customer is required to take a RMD from his IRA, what are the requirements surrounding
this client's distribution obligation? correct answers The distribution must be made by April 1 in
the year AFTER the client turns 72 and the customer is permitted to remove cash or securities. If
securities are moved, cost basis is stepped up to reflect as if securities were sold, new cost basis
is established.
A transaction in a TRACE-eligible security is executed at 6:10 a.m. The trade must be reported
to FINRA: correct answers No later than 15 minutes after the TRACE system opens.
A broker-dealer intends to hire a salesperson who has never worked for a member firm. During
the interview, the candidate discloses that he was arrested and charged with a misdemeanor for
forgery. correct answers This must be disclosed on the person's Form U4.
What type of offering will permit a US public company to quickly raise an unlimited amount of
capital from an unlimited number of both retail and institutional investors without registering the
securities with the SEC? correct answers A Regulation S offering. A regulation A offering limits
the dollar amount of securities that may be raised by the issuer to $75 million.
SIPC protection is NOT provided in this instance: correct answers Securities registered in the
name of the customer when they are held by the customer
What types of transactions would NOT be reported on the Consolidated Tape? correct answers A
private placement in a stock listed on the NYSE
Who is permitted to be the emergency contact for a member firm that has only one associated
person? correct answers The associated person and an employee of another firm who has
knowledge of the member firm's operations (typically the firm's attorney, accountant, or a
clearing firm contact). FINRA employees cannot serve as a member firm's emergency contact.
An investor who is a registered investment adviser wants to place a limit order to sell 5,000
shares of a Nasdaq stock at 26.75. The broker-dealer has disclosed to the client that it will accept
the order but may trade ahead of it. The following is true: correct answers If the client accepts
the conditions, the order does not need to be protected under the Manning Rule because the value
of the trade is greater than $100,000
Your firm is advising Industrial Paper in a proposed acquisition of Corrugated Box. The
company intends to issue debt to finance the purchase, and is filing Form 8-K to announce the
proposed acquisition. The following is NOT true regarding the disclosure documents filed in
conjunction with the deal: correct answers If your firm renders a fairness opinion regarding the
terms of the acquisition, it may not undermine the new debt offering of Industrial Paper
, A broker-dealer that sells mutual funds is required to submit payments received from customers
to the investment company no later than: correct answers 3 business days after the receipt of the
customer's order
What is the day-trading buying power of an account that has a long market value of $170,000
and a debit balance of $90,000? correct answers $150,000. Day-trading buying power is limited
to 4x the trader's maintenance margin excess, as of close of previous day. The SRO maintenance
requirement is 25% of the long market value ($42,500). Therefore, the excess maintenance
requirement is $80,000 less $42,500 or $37,500. The day-trading buying power is 4 x $37,500
which equals $150,000.
Who may suspend or expel a member firm from FINRA membership? correct answers Both a
hearing panel and the National Adjudicatory Council may suspend or expel a FINRA member
firm.
The term deficiency letter is associated with a: correct answers Registration statement for an
offering that will be registered with the SEC
According to FINRA's Corporate Financing Rule, underwriting agreements need not be filed in
what type of offering? correct answers Restricted securities sold under Regulation D
What is an appropriate account title for a custodial account? correct answers [Custodian Name]
C/F [Minor Name] under [appropriate state]
When a customer sells securities through a broker-dealer, a mandatory buy-in is required if the
broker-dealer does not receive securities from the customer by the: correct answers Tenth
business day after the settlement date
A Suspicious Activity Report (SAR) is also called FinCEN Form 101. correct answers It is filed
by a financial institution if a transaction involves at least $5,000, and the member firm knows or
has reason to believe the funds are derived from an illegal activity, designed to avoid filing of
other forms, or has no legitimate lawful purpose.
The financial reporting responsibility of an introducing broker is limited to: correct answers
Filing FOCUS Report Part IIA quarterly
A broker-dealer may NOT use a negative consent letter to transfer a customer's account to
another member firm under the following circumstance: correct answers The client wants to use
a new broker-dealer since his RR has moved to a new member firm. A negative consent letter is
a notification alerting customers that there has been some underlying change in the business
entity. If the client does not respond within a specific time frame, the client is deemed to have
consented to the change and does not need to provide a direct response.
An underwriter who will be engaging in stabilization must maintain files containing the
following information: correct answers The percentage participation of each member of the
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