Series 7 Chapter 4 - Part 2

Front 1

This type of service instruction gives the client the option to have securities held in the name of the brokerage firm as nominee.

Back 1

Hold Securities in Street Name

Front 2

This type of service instruction gives the client the option to have securities transferred to the customer's name and are then held in segregation in the firm's vault

Back 2

Hold Securities in Customer Name (Transfer and Hold)

Front 3

This type of service instruction gives the client the option to transfer the securities into the customers name and then have them mailed out to the customer.

Back 3

Mail Securities In Customer Name (Transfer and Ship)

Front 4

This type of service instruction gives the client give the client the option to have the dividends and or interest payments credited to the account or sent to the address of record

Back 4

Hold or Mail Dividends/ Interest Payments.

Front 5

This centralized depository is often used to hold securities for firm when the securities are being held in Street Name, instead of the B/D holding the securities themselves.

Back 5

Depository Trust Company

Front 6

The frequency at which Broker-Dealers are required to provide customers with a statement is?

Back 6

At least Quarterly

Front 7

An account statement, at a minimum, must contain:

Back 7

1. Description of all security positions

2. All money balances

3. All account activity since last statement

Front 8

Account activity, with regards to account statements, is defined as

Back 8

1. Purchases
2. Sales
3. Interest credits or interest debits
4. Dividend Payments
5. Transfer Activity
6. securities receipts or deliveries
7. Journal Entries relating to securities or funds in the possession or control of the Broker-Dealer

Front 9

On top of account statements, a broker-dealer is required to provide what document upon request?

Back 9

Financial Statement

Front 10

A confirmation Statement must include:

Back 10

1. The Identity and price of the security bought or sold
   
2. the number of shares, units, or principal amount
3. the date of the transaction, as well as the time of execution (or statement that the time will be furnished upon request).
4. The capacity which a broker dealer acted
5. The dollar price and yield information on debt securities
6. Whether a security is callable (and a statement that further information will be provided upon requests)
7. Settlement date

Front 11

What are the four capacities in which a broker-dealer can act?

Back 11

1. Agent for Customer
   
2. Agent for some other person
   
3. Agent for both customer and another person
4. Principal for its own account

Front 12

This type of transaction error occurs when a registered rep executes a transaction but uses the wrong account number

Back 12

Cancel and Re-bill

Front 13

This type of error occurs when the registered rep executes a transaction but simply misstates the execution price

Back 13

Errors in reporting

Front 14

1099 that shows Dividends and Distributions

Back 14

1099-DIV

Front 15

1099 form that shows Interest Income

Back 15

1090-INT

Front 16

1099 form that shows proceeds from a Broker and Barter Exchange Transaction

Back 16

1099-B

Front 17

1099 that shows Original Issue Discount for certain Bond Trades

Back 17

1099-OID

Front 18

1099 that shows Miscellaneous Income Sources

Back 18

1099-MISC

Front 19

How long may a broker-dealer hold client mail, if request is in writing and the client is traveling domestically?

Back 19

two months

Front 20

How long may a broker-dealer hold client mail, if request is in writing and abroad?

Back 20

Three Months

Front 21

When conducting a transfer of an account, the receiving firm must validate the instructions or take exception within what length of time?

Back 21

One business day

Front 22

Under what condition can a carrying party take exception to a transfer?

Back 22

1. It has no record of the account

2. The transfer instructions are incomplete

3. the Transfer instructions contain an invalid signature

Front 23

In an account transfer, who is the carying member

Back 23

The member firm who currently holds the account

Front 24

in an account transfer who is the receiving member?

Back 24

The member firm that is requesting the transfer

Front 25

After validation of transfer instructions, the carrying part must complete the transfer in what amount of time?

Back 25

Three days

Front 26

What assets cannot be transfer in an account transfer?

Back 26

1. Proprietary Product of the carrying member
2. Product of a third party where receiving firm does not have a relationship necessary to receive the asset
3. An asset of a bankrupt issuer, and the carrying member does not posses the proper documentation to effect delivery and no transfer agent is available to register the shares
4. the asset is a limited partnership interests

Front 27

If an asset is not transferable, the brokerage firm must notify the customer in writing for instructions to:

Back 27

1. Liquidate

2. Retain

3. Transfer and deliver to customer

4. Transfer to a third party

Front 28

Amount of money that SPIC covers in the event that a member firm goes bankrupt?

Back 28

$500,000 for each separate customer, of which no more than $250,000 may be cash holdings.

Front 29

How does SPIC coverage treat account holders who have both a Individual account and a Joint account at the bankrupt firm?

Back 29

They treat them separately, giving full coverage two each account as if they were separate customers