Series 26 Chapter 5 || Questions and 100% Verified Answers.
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Series 26 Chapter 5
Institution
Series 26 Chapter 5
A firm must give a customer----days to implement any opt-out provision in the privacy notice correct answers 30
Settlement Date correct answers the buyer delivers the cash and the seller delivers the securities.
Commissions must be disclosed on what statement? correct answers On the confirmat...
Series 26 Chapter 5 || Questions and 100% Verified Answers.
A firm must give a customer----days to implement any opt-out provision in the privacy notice
correct answers 30
Settlement Date correct answers the buyer delivers the cash and the seller delivers the securities.
Commissions must be disclosed on what statement? correct answers On the confirmation in the
case of an agency transaction
Representatives participating in chat rooms should treat such communication as correct answers
Public forum or speaking engagement
If customer fails to provide a member with suitability information , can member open account?
correct answers the member may open the account but may not make recommendations
New account customer information must be verified and updated how often? correct answers
Every 3 years
Customer account information must be updated with how many days of receipt of notice of
change correct answers 30
Who is required to sign new customer account? correct answers Principal Only
What DOES NOT have to be signed by customer? correct answers Cash account
Partnership Agreement correct answers If partnership wants to open margin account this
agreement is required to see if it is legal
Partnership Resolution correct answers If opening margin or cash; Document that says who in
the partnership can make the investment decisions in account
Prudent investor rule correct answers All the following are considered fiduciaries under this rule:
Trust account,
custodian for minor account,
guardianship account,
pension fund manager
executer.
Minor is NOT.
If registered representative executes customer transaction & notices wrong account number is
user what must he/she do? correct answers Report the mistaken to branch manager or principal
SEC RULE 17A-11 correct answers Report must be sent to The SEC in Washington DC, the
SEC regional office where the firm's home office is located, and the FINRA executive offices in
,Washington DC. For simplicity, we refer to these three as the "triumvirate. NO NEED TO
REPORT to FINRA District Office.
Net Capital violations correct answers Any time a broker/dealer's net capital either falls below
the minimum required, or the AI to NC ratio exceeds 15 to 1 (8 to 1 for a firm in its first year), a
violation has occurred. The firm must give same-day notification electronically to the
"triumvirate."
EARLY WARNING correct answers If at any time during the month a broker/dealer's NC falls
to less than 120% of its minimum or if the firm's AI-to-NC ratio exceeds 12:1 (1,200%), the
broker/dealer is considered dangerously close to a violation. At that point, the broker/dealer must
notify the "triumvirate" within 24 hours, as would be the case if their capital was deficient.
Books and records not current correct answers Any time a broker/dealer discovers that the books
and records required under 17a-3 are not current, the "triumvirate" must receive same-day
electronic notification. That must be followed up within 48 hours with a report detailing what the
firm's plans are to rectify the situation. However, business continues as normal.
The annual audited report, which must also be filed with the SEC, includes correct answers a
balance sheet and income statement, as well as a statement of changes in shareholders' equity and
sub- ordinated loans, and a computation of the firm's net capital.
Can extension on reports be filed ? if yes when? correct answers Requests for a 30-day extension
of deadline on any of these reports must be filed with the FINRA district office.
when must carrying firms file FOCUS II reports? correct answers both monthly and quarterly,
due within 17 days of the end of the calendar month or quarter being reported.
Carrying firms must also file an audited FOCUS II report when? correct answers within 60 days
of the end of the calendar year.
If a Firm's fiscal year-end date does not fall on a calendar quarter, when must it file a fifth
FOCUS II or IIA? correct answers within 17 business days of the year-end date.
If B/D terminates, gets expelled.. correct answers it must file a terminal FOCUS II or IIA report
with FINRA and the SEC within 2 business days.
Fully disclosed firms & mutual fund firms must file what type of report? correct answers less
detailed FOCUS IIA reports on a quarterly basis, due within 17 days of the end of the calendar
quarter being reported, and an audited FOCUS IIA within 60 days of the end of the calendar
year.
Cash accounts include correct answers retirement accounts(Personal and corporate-IRAs,
401ks...), custodial accounts(UGMA-UTMA)
, Margin account permitted in trust account only if correct answers provided for in underlying
documentation; legal documents authorize it.
Margin agreement must be approved by who? and when must it be approved? correct answers
principal promptly after 1st transaction, not before.
JTWROS correct answers Joint tenants with rights of survivorship- equal ownership. Upon death
assets pass to survivor. Checks drawn have to include both names(including stock certificates)
TIC correct answers tenants in common- unequal ownership, upon death, assets do not pass to
survivor.
Copy of trust agreement is not required in correct answers UGMA OR UTMA Account
UGMA/UTMA Limit correct answers 14,000 per year with one time exception of 70,000
Per custodial account, how many minors/custodians are allowed? & can custodian be
compensated? correct answers 1 minor and 1 custodian; custodian can be compensated only if
not a donor.
Limited power of attorney correct answers authority to trade only
full power of attorney correct answers authority to trade, deposit and withdraw funds
if client becomes mentally incompetent, person with ________ ________ ___ ___________ can
continue handling the account correct answers Durable Power of Attorney
When can trading authorization be revoked? correct answers upon death of either party (grantor
or grantee)
grantor correct answers gives authorization
grantee correct answers receives authorization
wrap account correct answers BD acts as an investment adviser. Charges asset based fee.
(commissions +advisory rep fee wrapped together)
DISCRETIONARY AUTHORITY INCLUDES correct answers ACTION, ASSET, AMOUNT.
What is not part of discretionary authority? correct answers Price & Time
when must all order tickets be reviewed? correct answers promptly after execution usually means
by end of trading day
who can sign on certificate in name of deceased person? correct answers executor of a deceased's
estate
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