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27 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Blue Sky Laws |
State securities laws. |
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Uniform Securities Act |
"Model Law," not the actual law of any state but a model for all states (including U.S. territories, possesion's, the District of Columbia and Puerto Rico. |
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Series 63 |
Created by the NASAA (North American Securities Administrators Association). |
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Agents |
or Registered Represenatives (RRs) who represents or acts on behalf of a broker-dealer when buying or selling securities (effecting a securities transaction). |
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Non-Resident Customer |
A customer who is TEMPORARILY (30 days or less) in another state; RR can often continue to service that customer REGARDLESS of whether or not the RR is registered in the state in which the customer is temporarily located. RR is not considered an agent.
The following conditions must be met: RR must be elligible to register in customer's non-resident state.
RR must be registered with a registered securities association (i.e., FINRA) and at least one state.
RR's broker-dealer must be registered in customer's non-resident state.
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New Resident Customer |
A customer who moves to another state. RR is not considered an agent in that state for a period of up to 60 days. RR can continute to service customer; RR must file an application to register in the state in which the client is now a resident within 10 business days of whichever is LATER: 1) a transaction with the client in the new state, or 2) the discovery by the RR of the client's change in residence.
The following conditions must be met: RR must be elligible to register in customer's non-resident state.
RR must be registered with a registered securities association (i.e., FINRA) and at least one state.
RR's broker-dealer must be registered in customer's non-resident state.
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Issuer |
any person who issues or proposes to issue any security.
a "Depositor" or "manager" of a certificate of deposit, voting trust, certificate or collateral trust certificate is considered an issuer. |
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Exempt Securities |
RRs of issuers of
U.S. Government bonds Municipal securities Canadian government and municipal securities Securities issued by recognized foreign governments Securities issued by domestic banks, savings institutions, and trust companies Investment-grade promissory notes (commercial paper) and bankers' acceptances, if they mature in nine months or less and have minimum denominations of at least $50,000 Investment contracts issued in connection with an employee's stock purchase, savings, pension, profit-sharing, or similar benefit- plan
(exempt securities) are not agents. RRs of broker-dealers representing an issuer, are agents.
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Not considered an agent |
a person who represents an issuer selling only to qualified purchasers or in a private placement under both federal law and under the Securities Act of 1933.
a person who represents an issuer in transactions with employees of that issuer involving that issuer's securities as long as that person receives no commissions for such transactions (also includes sales to partners of the issuer or members of its BOD).
a non-resident customer's RR.
a new resident customer's RR.
a person who represents the issuers of certain exempt securities.
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Not considered an issuer |
No issuer(s) exist in certificate of interest or participation in oil, gas or mining titles or leases. |
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Administrator |
Comission, Commisioner, or Secretary refer to the person in a state who is responsible for enforcing that state's securities laws and rules.
May have the power to create certain rules and regulations under a state's blue sky law, but does not write the law; the law is created by the state legislature. |
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Agent Application |
Information required: applicant's qualiications and business history Any injunctions or administrative orders involving a security Any convictions for misdemeanors involving securities (regardless of time frame) Any felony convictions (regardless of time frame) The applicant's financial condition and history |
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Consent to Service of Process |
Once signed, legal papers meant to be served to the agent will have teh same force by being served to the Administrator instead. Does not need to be renewed; effective as long as the person is an agent. |
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Bond |
$10,000 |
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Effectiveness |
Registration becomes effective at noon on the 30th day after filing; Administrator has the authority to specify an earlier date, and may defer the effective date until the 30th day after the filing of any amendment. Administrator may also deny any application. Effective only while agen't is associated with a BD (or an issuer, if he/she is the agent of an issuer).
If an agent leaves on BD and becomes employed by another BD, all 3 parties are responsible for notifying the Administrator.
If an agent terminates his employment with a BD, both the agent and the BD must notify the Administrator. |
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Denial, Suspension, or Revocation of a Registration |
Denial must be in public's interest (same rule that applies in the denial of a security): filing an incomplete application or one that contains a false or misleading statement Willfully violating or failing to comply with any provision of the USA Being convicted of any misdemeanor involving any aspect of the securities business, or any felony, within the last 10 years Having been enjoined by a court from participating in the securities business Having been found to have violated any federal securities or commodities law or such laws in another state Engaging in dishonest or unethical practices in the securities business Not being qualified on the basis of such factors as training, experience or knowledge of the securities business Failing to pay the proper filing fee (a denial based solely on these grounds must be lifted once the fee has been paid)
Administrator may also use any of the grounds listed as a reason for suspending or revoking an agent's registration; doe's not affect BD's registration. Registration status of the BD directly affects agent's registration. |
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Annual Renewal |
Agent's registration must be renewed annually in order to remain effective; lapses on December 31; paying of fee. |
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Application to Withdraw Registration |
effective 30 days after receipt of the application to withdraw; can become effective sooner at the Administrator's discretion. |
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Broker-Dealer |
person (can mean an individual, legal entity, such as a(n): corporation, partnership, association, joint-stock company, unincorporated association, government, political subdivision of a government, certain trust) engaged in the business of effecting transactions in securities for the accounts of others (agent capacity) or for its own account (principal capacity). |
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Not a Broker-Dealer |
Bank, savings institution, or trust company Issuer Agent Person that has no place of business in the state and deals only with broker-dealers, instituional investors (such as banks, insurance companies, investment companies, pension plans, and other financial institutions), or the issuer of the security involved in the transaction. Person who has no place of business in a state (but who is licensed in a state in which it does have a place of business), and who offers and sells securities in the state only with person in the state who are existing customers and who are not residents of the state is not considered a BD. (Also applies to Canadian firms doing business with Canadians temporarily in the U.S.) |
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Registering as a BD
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Registering as a Broker-Dealer
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Required information, Applicant's:
• name and place of business • proposed method of doing business • qualifications and business history of any partner, officer, director, or other person performing a similar function • any injunction or administrative order involving the securities business • any misdemeanor involving the securities business, or any felony • financial condition and history • consent to service of process |
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Broker-Dealer Registration Effectiveness
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• Filed an incomplete application or one that contains a false or misleading statement.
• Willfully violated or failed to comply with any provision of the USA. • Was convicted, within the last 10 years, of any misdemeanor involving any aspect of the securities business or any felony. • Has been enjoined by a court from participating in the securities business. • Has been found to have violated any federal securities or commodities law or such laws in another state. • Engaged in dishonest or unethical practices in the securities business. • Is not qualified on the basis of such factors as training, experience, or knowledge of the securities business. • Failed to pay the proper filing fee (A denial based solely on these grounds must be lifted once the fee has been paid.). • Is insolvent, either because the firm's liabilities exceed its assets or because it cannot meet its obligations as they mature. • Failed to reasonably supervise its agents or employees. An Administrator must have two reasons to deny registration of broker-dealers, one of which is that the denial is in the public interest. This is the same rule that applies to an Administrator denying the registration of a security. Once the broker-dealer's registration has been granted, the Administrator may not suspend or revoke the registration solely on the basis of a final judicial or administrative order known to him prior to granting the registration, unless the proceeding is instituted within 90 days following registration. |
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Books and Records
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Most records must be retained for at least three years, and can be kept in any manner long as they can be readily copied and printer. The records must be kept in an easily accessible location for the first 2 years.
Exceptions to the 3 year rule (some records must be kept for 6 years), including: •principal designation records •records of original entry •trade blotters Records that must be retained for their of the firm include: •Stock certificate books •partnership papers •articles of incorporation •minutes of BOD meetings |
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Books and Records
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Most records must be retained for at least three years, and can be kept in any manner long as they can be readily copied and printer. The records must be kept in an easily accessible location for the first 2 years.
Exceptions to the 3 year rule (some records must be kept for 6 years), including: •principal designation records •records of original entry •trade blotters Records that must be retained for their of the firm include: •Stock certificate books •partnership papers •articles of incorporation •minutes of BOD meetings |
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Investment Advisor Books and Records
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Must generally keep records for five years; same rules apply to electronic records.
The flowing must be retained for 3 years after the investment advisory firm has been terminated: •stock certificate books •partnership papers •articles of incorporation Minutes of BOD meetings |
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Financial Reports: Order Tickets
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Order memorandum is the form RRs fill out when entering a trade request for a client. The following information is generally required on the order ticket:
•Buy or sell •Name of security •Customer's account number •Type of order being placed •Whether discretion was used •Whether the trade was solicited or unsolicited •An RR identifier •Time the order was received •Time the order was entered |
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