SIE - Chapter 6 Federal Regulations

A form 144 Notice of Offering is effective for

90 days

State security laws (aka Blue Sky Laws) apply to all of the following EXCEPT: A: margin requirements B: securities issued or traded within a particular staet C: tombstone ads D: real estate investments trusts (REITS) E: Registered Reps

A

Which of the following could be considered an insider of a corporation under Federal Securities Laws? A: president's wife B: attorney for the corporation C: receptionist D: accounting clerk

All of the above

Under the Securities Act of 1933, which of the following securities issued by an investment company would be subject to the prospectus delivery requirements? A: Variable annuities B: Mutual fund shares C: face-amount certificates D: contractual plan certificates

All over the above

What can be offered to the public under the 1933 Act?

An exempt security and an issue on which the SEC has approved the preliminary prospectus

According to the Securities Exchange Act of 1934, insiders are prohibited from all of the following except: A: shorting the stock of the companies which they are an insider B: voting the outstanding shares owned by the insider in the companies stock C: going short against the box in the companies' stock D: instructing the CFO of the corporation to sell calls on the companies stock'

B

Self-regulatory organizations (SROs) are required by fed securities laws to do all of the following EXCEPT: A: establish rules of fair practice B: determine fair market prices C: establish arbitration procedures D: establish standards of professional qualification

B

All of the following are correct concerning Blue Sky Laws EXCEPT: A: An issuer who intends offering securities for sales in various states must comply with the provisions of the Act of 1933 as well as the securities laws within each appropriate state B: the securities division has the power to revoke broker-dealer and/or salesman licenses if state laws are violated C: The Securities Act of 1933 establishes standard provisions which must appear in every Blue Sky Law D: These laws attempt to protect the public against the fraudulent sale of securities within a state

C

In order for a firm to effectively enforce an anti-money laundering program, which of the folllowing would be most important? A: not allowing cash deposits B: Filing a SAR report on time C: Knowing its customers D: reviewing accounts for churning

C

LMNI Incorporated is listed on the American Stock Exchange. Jane sits on the board of directors for LMN and wishes to buy some LMN stocks. She executes a trade on the floor of the AMEX and purchases the shares. How do the provisions of Rule 144 apply to this scenario? A; Jane is only permitted to sell the stock if she holds it for a minimum of 3 yrs B: Jane must keep the stock indefinitely and is not permitted to sell C: Jane is permitted to sell the stock purchased on AMEX immediately, but certain restriction apply D: Jane is permitted to sell the stock purchased on AMEX immediately and there are no restriction with regards to sale

C

Opinion of counsel and underwriting contracts is what is required in a prospectus under the Act of '33

False

Reg A offerings has issued securities that are restricted

False

SEC directly regulates a new issue of Treasury securities

False

The president of the corporation would be allowed to take a "short" position?

False

Under Patriot Act requiring to reduce penalties for money laundering is a provision?

False

Are character references from third parties a written procedure for CIP (Customer Identification Program)

No

The primary regulator agency for the issuance and regulation of the securities market is the

SEC (Securities Exchange Commission)

Articles of incorporation of a broker-dealer must be kept for

The life of the broker-dealer

A non-affiliated outsider who owns 2% of the outstanding shares of the company being "shorted" would be allowed to take a "short" position

True

An insider voting the outstanding shares they own is acceptable practice according to the Act of '34

True

SEC directly regulates a new issue of corporate bonds

True

SEC directly regulates trading in the OTC market

True

SEC regulates trading on stock exchanges

True

Under Rule 144 affiliated person selling restricted securities must have been paid and owned for at least 6 months

True

Under Rule 144, transaction can be done as agency or market-maker

True

FinCEN regulations is to detect and prevent

money laundering

A broker's sole purpose is to give appearance of heavy trading in ABC's stock, this practice is a violation of Federal Securities Laws referred to as

painting the tape and is a form of price manipulation

A registered rep of the firm is known to be going through divorce and having some personal financial difficulties. The RR submits a request to back-office personnel to change pertinent contact info on the accounts of the RRs immediate family and member's of the RR's estranged wife's immediate family to his personal contact info. The Operation Professional who receives the request should:

recognize the request as abnormal and refer the request to a supervisor or personnel in the compliance department

Securities issued under the provisions of Reg D are

restricted for 6 months

What is the purpose of the Patriot Act?

to prevent acts of terrorism and crimes associated with terrorism

In accordance with Regulation S-P, when must privacy notices be sent by broker-dealer

whenever a relationship is established with a customer and a minimum of once per year following