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40 Cards in this Set
- Front
- Back
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When must RRs complete the Regulatory Element of Continuing Education?
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On the 2-year anniversary of their registration and every 3 years thereafter.
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True or False: Firm Element Continuing Education requires B/Ds to update employees on job and product-related subjects.
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True
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May an RR and a client share in an account?
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Yes, with firm approval and provided the sharing in gains and losses is proportionate to their investment.
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To apply for a securities license, one must file Form _____ with FINRA.
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To apply for a securities license, one must file Form U4 with FINRA.
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True or False: The findings of an arbitration panel may be appealed.
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False, the decisions are final and binding.
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Name some Self-Regulatory Organizations (SROs).
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FINRA, MSRB, CBOE, and other exchanges
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What is the role of an SRO?
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Maintain fair and orderly securities markets and establish rules and regulations for protecting investors
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The __________________________________________ is the SRO for the OTC market.
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The Financial Industry Regulatory Authority (FINRA) is the SRO for the OTC market.
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Gifts exceeding $_____ are considered excessive.
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Gifts exceeding $100 are considered excessive.
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__________________________ expenses are not subject to the Gift Rule.
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Entertainment/business expenses are not subject to the Gift Rule.
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What actions may the hearing panel take regarding rule violations?
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Censure, fine, suspension, request to requalify, or expulsion of the respondent
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The hearing panel may not impose a ___________________ due to rule violations
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The hearing panel may not impose a prison sentence due to rule violations.
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Hearing Panel findings may be appealed to the ___________________________,then the _____, and then ________________.
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Hearing Panel findings may be appealed to the National Adjudicatory Council (NAC), then the SEC, and then federal court.
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Industry disputes are handled through ______________.
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Industry disputes are handled through Arbitration.
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May a customer be forced to use arbitration?
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No, but signed pre-dispute arbitration agreements are binding.
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When arbitration involves public customers, __________ of arbitrators must be from outside the securities industry.
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When arbitration involves public customers, a majority of arbitrators must be from outside the securities industry.
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In the process of opening an account for an employee of another firm, what must be done by the carrying firm?
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Provide written notification to the employer
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For accounts opened for employees of another member firm, what is provided to the individual's employer upon request?
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Duplicate confirmations and statements
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True or False: FINRA regulates accounts of member firm employees opened at another firm.
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True, the rule also covers accounts for the employee's spouse or dependent children.
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A B/D must file Form U5 with FINRA when a person's association with that firm ______________.
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A B/D must file Form U5 with FINRA when a person's association with that firm ends/ceases.
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When a minor dispute is handled through simplified arbitration, is the ruling final and binding?
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Yes, all arbitration decisions are final.
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What are the justifiable reasons for denying an individual's registration?
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Conviction for any felony or securities-related misdemeanor within the last 10 years
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Do all outside activities of an RR require notification to an employer?
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No. For example, hobbies do not require employer notification.
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What is the industry policy regarding an RR that sets up an outside business that involves paid public speaking?
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The RR must receive employer approval.
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How often must a B/D's Firm Element Continuing Education program be reevaluated?
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Annually
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What is some of the important information to obtain when opening a new client’s account?
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Name, address, age, occupation, SSN, citizenship, income, net worth, objectives, risk tolerance, investment experience
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What is not pertinent when opening an account, a client’s educational or financial background?
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Educational background
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If a client refuses to provide certain information, may the account still be opened?
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Yes, although name and address are required.
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The ___________________ and _______________________ must sign the account form.
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The registered representative and supervising principal must sign the account form (clients are not required to sign).
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True or False: Clients need not sign the account form for a cash account.
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True, but signature would be required for an option or a margin account.
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If a client wins $1 million, what should a RR do?
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Update the account form
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True or False: Only one person must provide information to open a joint account.
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False. Each owner must provide information to open a joint account.
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Who may enter orders in a joint account?
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Any owner named on the account
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For a joint account, how many account numbers and SSNs are used for tax reporting?
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One
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What is a TOD account?
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An account in one person’s name that allows a beneficiary to gain control upon the account holder’s death.
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True or False: Money may be withdrawn from a joint account in one owner's name.
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False, any checks should be in both parties' names.
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What happens to the deceased’s portion in a joint account with tenants-in-common?
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The deceased's portion goes to their estate for tax purposes.
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What happens to the deceased’s portion in a joint account with right of survivorship?
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Their portion passes to the survivor.
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Only ______ custodian is allowed per minor’s account.
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Only one custodian is allowed per minor’s account.
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True or False: Custodial accounts are solely carried in the name of the minor.
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False. The account is in the custodian’s name for the benefit of the minor.
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