Ch6 S5

Front 1

T or F

All transactions must be reveiwed and initialed by a principal or supervisory person of the b/d

Back 1

T

Front 2

Discretionary authority

Back 2

If customer wants to grant authority to their RR to make inv decisions on their behalf, they must open a discretionary account
-RR MUST OBTAIN PRIOR WRITTEN AUTHORIZATION prior to executing disctretion

Front 3

Types of discretionary accounts

Back 3

1.Full POA- allows broker to make PURCHASES AND SALES decisions for the account and WITHDRAW CASH OR SECURITIES
2.Limited POA-Broker can make inv decisions but but CANT WDRAW CASH OR SECURITIES

Front 4

Facts about discretionary accounts

Back 4

1.Terminated upon death
2.Checks must ALWAYS be paid to the OWNER
3.UPON WRITTEN REQUEST,owner may waive their right to receive confirmations and statements
4.Owner may still initiate orders
5.RR must designate each order as 'dicretionary' on order ticket
6.Good until revoked by customer IN WRITING
.Must not CHURN-make orders excessive in size or frequuency

Front 5

Time and price discretion

Back 5

RR only determines WHEN the order will entered and the PRICE.
-does not decide how many shares to buy or sell or which security
-does NOT require written consent
-good for the day of entry only;written instructions would be required for longer

Front 6

Erroneous trades

Back 6

Customer must pay the actual price at which the trade is executed

Front 7

Changes to orders

Back 7

Any change or correction to the order requires approval of the supervisor

Front 8

LOA

Back 8

Allows for transferring of a customers cash or securities

Front 9

IF a customer dies, the RR must:

Back 9

1.Cancel all open orders
2.Freeze the account
3.Await instructions from estates
4.Obtain an affidavit of domicile

Front 10

Partnership accounts

Back 10

IF one partner dies, the RR should freeze the account

Front 11

ACATS

Back 11

Facilitates the transfer of customers account from one brokerage firm to another
-transfer must be completed in 3 business days following validation of the transfer
-firm carrying the account must validate the transfer instructions within 1 business day
-trading can continue until new firm begins the transfer proces

Front 12

Transfer account to another broker with the same firm

Back 12

Receiving broker must reveiw and update the CUSTOMER ACCOUNT FORM

Front 13

Unregistered employe of a b/d would be allowed to:

Back 13

1.Adress mail invitations to a seminar
2.Talk to clients about clerical and admin issues
3.Direct walk in clients to RR

Front 14

Holding mail for clients when traveling:

Back 14

1.Domestic-2 months
2.Abroad-3 months
3.PO Box cannot be used as a forwarding address
4.Mail can't be sent to another RRs office

Front 15

T or F
RR are allowed to return a percentage of commissions earned while exeuting transactions for clients

Back 15

F