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68 Cards in this Set

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  • Back
When opening a new account the_________________ must complete an _________________form
registered representative

New account
The basic information required on a new account form is customer_______and___________. Whether it is a cash or_________account. Whether the customer is of________age
Social security #
Customer occupation
Whether the client is employed by another_____________
name
address
margin
legal
broker
For Nyse it is required that the country of_________be obtained since there are restrictions on foreign ownership of companies in "sensitive" industries.
citizenship
Nyse used to require a bank reference to open an account. This is no longer a formal rule. Who still may require this?
Nyse firms
The NYSE requires that each customer be asked if he or she is a ______ _______ or __________ of 10% or more of a publicly traded company stock.

If so the_______and__________must be disclosed

This is the technical definition of an______________
director officer shareholder

company
position

insider
The MSRB requires that the customer's________bracket be obtained when opening a_________account
tax
muni bond
All of the regulatory bodies_______,_________,_________,________ require that any security that is recommended to a customer be a suitable investment for that person. This is the NYSE_______________rule
NYSE NASD MSRB CBOE

Know your customer
As a general guide to determine suitability, the customer should be asked about investment_____, Investment_________, existing portfolio and tax____and tax_______
objective, experience, status, bracket
If a customer refuses to disclose financial status can a recommendation be made, under MSRB rules?
No
A registered rep can/cannot execute trades that are considered unsuitable at specific direction of the client.
can
Before an Options account can be opened, client must receive the latest________ ________ document.
The date the client was sent this form must be ________on the new account form.
options disclosure
marked
To open an options account a client must be asked specifically about:
Investment_________, Investment_________, Financial_______, Financial_________, Marital status, Net________, Liquid Net_______, and estimated annual________.
objective, experience, situation, needs, worth, worth, income
A new options customer with limited experience may be limited to buying_________ and ________ only.

It is up to the_______ to decide the level of options trading allowed.
calls and puts
firm
Options agreement must be signed____days_____the account is opened
15

after
The CBOE requires that if the customers financial situation changes materially, the ________agreement must be amended.
Options
The_____ _______must sign the new account form which indicates that he or she believes that the information is true and accurate. The _______ or________must sign the form accepting the account before trading________.
registered rep

principal or branch manager

starts
The NASD requires that New accounts of "over the counter" firms be approved by the ________________.

This person has to pass the series___
if the person is solely a member of the NASD
General Securities Principal.

24
Muni bond accounts have to approved by municipal________ with a series__or ___
principal

53 or 8
Is there a requirement for client signature on new account form?
NO
To open a cash account, only the __________form is required. In a cash account the customer agrees that he will pay in _______ for all purchases.
new account

full
Margin Securities are held in _______name
street
Is client signature required on new accuont form?
No
When opening a margin account, the customer must be provided with a Credit _______ _______.
disclosure document
The credit disclosure document is also called the ___ __ ________ document
truth in lending
What 2 options are available for joint account ownership?
Joint tenancy with rights of survivorship

Tenancy in Common
To open an account for a corporation proof that the corporation exists is/is not required?

This takes the form of a corporate_______

The resolution is signed by the _______of the corporation and the corporate_____ must be affixed
is
resolution

secretary

seal
In opening a partnership account what must be obtained?
Copy of the partnership agreement
Most partnership agreements are amended________, so each time an amended agreement must be obtained.
annually
With a limited trading authorization can this person withdraw funds from the account?

Can they buy and sell?
Cannot withdraw funds

Can place orders to buy or sell
What is a fiduciary?

Types of fiduciaries are:
An account where a third party is acting for and in the best interest of the owner of the account.

Trusts, Guardian, Admin of Estate, Conservator for Incompetent
Executor of estate, Receiver in Bankruptcy
Fiduciary accounts are generally prohibited from ________transactions. Only ________accounts are permitted.
margin

cash
Generally legal list investments consist of debt rated in the top ___ ratings(___ or better)
4

BBB
In a guardian account what document must be obtained to open this type of account?
Court order appointing the guardian.
In a discretionary account, the customer gives the______ ____ trading authorization.

The customer must sign a trading authorization_________and discretionary trades can take place
brokerage firm

before
In a discretionary account, the client must give Power of attorney to the _____ ______
brokerage firm
A trade is considered to be discretionary if the broker chooses more than the ____ and _____ of execution.
price and time
Trade is considered discretionary if size and/or ________ are chosen by the broker.
security
Every discretionary order ticket has to be signed by the appropriate _________ promptly.
principal
If the principal finds trades in discretionary accounts that he believes are unsuitable, too frequent, or excessive in size he will:
discipline the broker and will remove the trades from the customers account, placing them in the house account to be reversed out the next trading day. If there are any losses on these trades, they are charged to the representative.
Any_______ can open a custodian account

All securities in the account must be registered in _______ name.

If bearer securities are given, they must be:
adult

account

canceled by the transfer agent and registered securities issued in their place.
In custodial accounts ________ balances CANNOT be held in the account for an extended period of time.
Cash
Once a gift is given in a custodial account, it is_________.
irrevocable
Can a custodian let rights in the account expire worthless?
NO
Omnibus accounts are established to handle ________ _______ clients.
Investment advisor
An investment adviser trades the accounts for the clients as he sees fit, charging the clients and _____ _______ fee.
annual management
Customer must receive written confirmation of each transaction in the account, mailed no later than:
the day after trade date
If a client is travelling domestically, mail can be held______ months, overseas_____ months.
2

3
At all times, the registered representative must keep the following records:
Copy of new account form information


Chronological record of trades

Current account statement, showing securities positions with their location.
If there is an error in a confirm the firm must send a ________ confirm
corrected
If there is an error in execution, customer gets price at which trade _____ ____ been executed.
Could have
If a registered representative learns that a client has died, he must:
cancel all open orders, note the customer account deceased, and await further instructions from the executor of the estate.
If a account is a joint tenancy(with rights of survivorship) the account cannot be transferred into the sole name of the living owner until:
a copy of the death certificate is received
If a partner dies, no orders can be accepted until:
the remaining partners amend the partnership agreement
Once an account is closed, new account forms must be retained for___ years: customer statemetns for____ years.
3
6
The securities and exchange act of 1934 applies only to ______securities.
Non exempt
Reg T only applies to _____ securities.
Reg T controls credit from _____ to _____.
non exempt

broker to customer
Reg T sets____ margin.

The second level of margin regulation is applied by the _______ and the ______, which have their own margin requirements.
These are called the _____ _____ margins.
initial

NASD exchanges

Minimum maintenance
A margin account cannot be opened unless a customer signs a margin agreement. Under the agreement the customer pledges(hypothecates) the securities that are purchased in the account to the ______ firm.
In return the ______ firm loans the customer a portion of the purchase price. The loan to the customer is called the ______ balance.
Brokerage
Brokerage

DEBIT
The brokerage firm has the right to repledge client securities to a bank. This is also called:
rehypothecation
The bank loans funds to a broker termed a ____ loan or ____ loan on the basis of rehypothecated securities.
call loan

Broker loan
The credit relationship from bank to broker is controlled by Regulation___.
U
The basis promise of Reg U is:
that brokerage firms cannot borrow more money from banks using customer securities as collateral than the actual amount that they loan to their customers.
Broker is limited to rehypothecating customer securities equal to ______% of the debit balance.
140%
Reg T of the Federal Reserve Board controls credit from ____ to _____.
It sets_____ margin.
Broker to customer.

Initial.
The major exempt securities are:


The federal reserve has no power to set initial margins on these securities.

However these securities
U.S. Government
Agency Issues
Muni issues
Commercial paper
Only_________traded securities are marginable
actively
In a cash account, any security can be purchased as long as payment is made in_______-.

Under Reg. T, payment must be collected promptly, but no later than _ business days past industry settlement rules.
full

2
Under a reg T extension, how many days extra are given?
3 business days