Series 7: Unit 5 Customer Accounts

Front 1

New account form

Back 1

an account opened by a broker/dealer requires a completed one of these

Front 2

full name, dob, address and phone, ssn, occupation, employeer type of business, citizenship, of legal age, annual income and net worth, investment objectives, bank and brokerage references, whether the customer is an employee of another broker/dealer, how the account was acquired, name and occupation of person with authoirity to make transactions, signature of the principal or branch manager accepting account

Back 2

a registered representative must fill out the follow information on all new account forms

Front 3

suitability

Back 3

the registered representative can make recommendations only if sufficient information has been given to determine this

Front 4

USA Patriot act

Back 4

what US act requires brokers to verify the identity of any new customer, maintain records of the information used to verify idenitty, and determine whether person appears on any list of know or suspected terrorists

Front 5

customer name, dob, physical address, and SSN

Back 5

as part of its customer identification program, a broker dealer MUST before opening an acct obtain at least

Front 6

Customer Identification programs (CIPs)

Back 6

USA patriot act requires financial institutions to maintain these to prevent financing of terrorist operations and money laundering

Front 7

Office of Foreign Assets Control (OFAC)

Back 7

publishes and maintains a list of individuals and companies owned or controlled by, who are acting for, or on behalf of, targeted countries and individuals, groups, or entities that are designated under programs that are not country specific, such as terrorists and those trafficking in narcotics

Front 8

individual, joint, corporate and partnership

Back 8

What are the principal types of ownership of accounts

Front 9

Trading authorization / power of attorney

Back 9

account opened with someone other than the owner having the authority to buy and sell securities on behalf of the owner

Front 10

discretionary

custodial

fiduciary

Back 10

what are the primary types of trading authorization:

Front 11

Discretionary trading authorization

Back 11

a registered representative or other person who has been given written authorization from a customer to make trading decisions for the customer

Front 12

custodial trading authorization

Back 12

an adult who has been designated to act on behalf of a child, who is the beneficial owner of the account

Front 13

fiduciary trading authorization

Back 13

a third party who has been legally appointed to prudently manage the account on behalf of another person or entity

Front 14

Transfer and ship

Back 14

seucirites are registered in the customer's name and shipped to them

Front 15

transfer and hold in safekeeping

Back 15

securities are registered in the customer's name and the broker/dealer holds them in safekeeping

Front 16

Hold in street name

Back 16

securities are registered in teh broker/dealer's name and held by the broker/dealer. ALthough the broker/dealer is the securities' nominal owner, the customer is the beneficial owner

Front 17

Delivery versus payment (DVP):

Back 17

securities are delivered to a bank or depository against payment

Front 18

Cash on delivery COD settlement

Back 18

when DVP securities are delivered to a bank or depository again payment

Front 19

Cash account

Back 19

the basic investment account. ANyone eligible to open an investmenet account can open these. Pays in full for any securities purchased

Front 20

Margin account

Back 20

allows a customer to borrow money for investing

Front 21

Margin

Back 21

refers to the minimum amount of cash or marginable securities a customer must deposit to buy securities

Front 22

Legal right to open an investment account

an indication of any limitations that the owners the stockholder a court or any other entity has placed on the securities in which the business can invest

who will represent the business in transactions involving the account

Back 22

corporate account what registered representative must establish

Front 23

Fee based account

Back 23

charge a single fee (either fixed or percentage of assets) instead of commission based charges for brokerage services

Front 24

Wrap accounts

Back 24

accounts for which firms provide a group of services such as asset allocation, portfolio management, executions, and administration for a single fee. generally investment advisory accounts

Front 25

prime brokerage account

Back 25

account is one in which a customer generally an institution selects one member firm to provide custody and other services, while other firms, called executing brokers handle all trades placed by the customer

Front 26

One account

Back 26

A customer who has both a cash and a margin account has how many accounts?

Front 27

Guaranteed accounts

Back 27

When a customer wants to open another account and must provide statement saying that each account unreservedly guarantees the others

Front 28

Validate or take excepiton

Back 28

the firm has one business day to do this to the transfer instructions

Front 29

A principal

Back 29

who must approve every new account opened for the firm

Front 30

No can be done promptly after the completion of the first transaction

Back 30

Does account approval have to take place before the first trade

Front 31

one day to validate positions and 3 more to complete the transfer

Back 31

how long does the firm have to validate positions and complete transfers for account transfers?

Front 32

Special cash accounts

Back 32

what are cash accounts sometimes called?

Front 33

single account

Back 33

account that has one beneficial owner

Front 34

joint account agreement

Back 34

must be signed in addition to new account form for 2 signers

Front 35

JTWROS

Back 35

ownership stipulates that a deceased tenant's interest in the account passes to the surviving tenant, all parties have an undivided interest in the account

Front 36

TIC

Back 36

each party must specify a percentage interest in the account

Front 37

partnership

Back 37

unincorporated association of two or more individuals. Frequently open cash margin, retirement and other types of accounts necesary for business purposes

Front 38

partnership agreement

Back 38

stating which of the partners can make transactions for the account
Æ

Front 39

fudiciary

Back 39

any person legally appointed and authorized to represent another person

Front 40

trust agreement

Back 40

details thelimitations placed on the fudiciary

Front 41

prudent investor rule

Back 41

requires fudiciary to make wise and safe decisions

Front 42

buy and sell of orders but no withdrawal of assets

Back 42

what does limited poa have power to do

Front 43

durable poa

Back 43

who survives a mental incompetence decleration

Front 44

discretionary acct

Back 44

accct set up with pre approved authority for a registered rep to make transactions without specific approval

Front 45

activity (buy or sell)

amount (number of shares)

asset (the security

Back 45

order is discretionary if missing one of these

Front 46

death certificate

inheritance tax waivers

letters testamentary

Back 46

What documents are neessary to release the assets of a decendent

Front 47

Cancel open orders

Freeze the account(mark it deceased)

await instructions from the executor of the estate

Back 47

what 3 steps apply at the death of customer

Front 48

UGMA

Back 48

uniform gift to minors act