SIE PART 4
securities related but no possibility of compensation
-BD employer may approve or disapprove - member firm acknowledgement written notice -member firm may require specific conditions be met
Selling away ex:
-RR helps friend issue securities for bus under formation -RR helps an friend sell inherited stock certs w/o being customer of firm
principal resp for:
-accepting new accts -approving accts for margin/option trading -approving/reviewing comm -reviewing trading activity -hiring/training new reps -responding to written complaints
court injunctions prohibiting acting as the following:
-an investment advisor, underwriter, or a BD -in any capacity aligned with the securities or financial services industry
Form U-5 state way of leaving firm 5
-discharged (details) -permitted to resign (details) -deceased -voluntary - other (details)
Registered Representative
-engages in investment banking or securities business -associated with BD -licensed
activities permitted by non registered BD's
-general non investment questions -providing literature on request, setting appts
fingerprints required for:
-involved in sales or securities -those who handle cash or securities -clerical persons exempt -submitting to US Attorney general -receptionist BD duty
if contributions are made by: 3
-municipal firm -municipal firm professional (MFP) associated w/ firm -an political action commute (PAC) controlled by firm
Form U-4 incudes
-name, address, alias -5 yr residency history -10 yr employment -info on charges
Rules under MSRB Rule G-37
-negotiated underwritings in which a municipal issuer selects an underwriter and negotiates a deal -financial advisory work in which a municipal issuer selects an municipal firm to help it structure a new issue
written complaints, who addresses:
-notify acct rep, acct principal, branch manager, compliance dept Prinicipal need to address complaint
enter in private securities:
-provide prior written notice to employer -describe in detail proposed transaction -describe in detail proposed role in transaction -disclose whether she has or may receive compensation for transaction
outside bus activities
-provide written notice -employing member's permission is not a regulatory requirement if not security related
prohibits municipal firm from engaging in municipal securities bus for ____ yr if contributions are made
2
time limit before re-testing
2 yrs SIE 4yr
changes to U-4 form must be filed within
30 days in event with the CRD
Central Registration Depository (CRD)
A computerized information system that is maintained by FINRA to provide registration information regarding broker-dealers and registered representatives.
FINRA
Financial Industry Regulatory Authority -agree to compliance with federal securities laws
Which of the following positions will mitigate the risk of a short call position?
Long calls
$250 contribution are permitted by _____ eligible to vote for that official
MFP
who retrieves U-5?
New ee and FINRA CRD
Form U-4
Not effective unless pass exam -1st fail 30 days -3rd fail 6 mths
Gifts and Gratuities
Permitted if: -not conditional on sale -approved by employing member firm -100 max per indiv -does not apply to bus entertainment
Which of the following are required in discretionary accounts? A) SEC approval to open the account B) Prior approval by a principal before each discretionary trade is placed C) Prompt approval by a principal following each discretionary trade D) FINRA approval to open the account
Prompt approval by a principal following each discretionary trade
what require sponsorship:
SIE: no Top off exams and must be completed within 4 yrs of SIE
Primary market transactions would include which of the following? A) Sale of $10 million of municipal bonds by a broker-dealer acting as a market maker B) Sale of $10 million of U.S. Treasury bonds by a broker-dealer acting as a market maker C) Sale of $10 million of corporate stock by a broker-dealer acting as a market maker D) Sale of $10 million of corporate bond by a broker-dealer acting as an underwriter
Sale of $10 million of corporate bond by a broker-dealer acting as an underwriter underwriter: does not own market maker own: 1st mkt
Quote: 17 -17.25 6 x12 Customer can
Sell at $17 for 600 shares Buy at $17.25 1,200 shares
Which of the following transactions, if any, cannot be done in a cash account? A) Any of these could be done in a cash account B) Buy 100 ABC to close C) Buy 100 ABC to open D) Sell 100 ABC to open
Selling to open (a short sell) can only be done in a margin account. It cannot be done in a cash account.
Which of the following best describes how a buy stop at 39 would fill?
The next available price after the market price rises to 39
If the portfolio of a variable annuity separate account is directly and actively managed by the insurance company, the separate account must be registered as
an open-end management investment company.
firm element:
annual in-house
private securities transaction: (sailing away)
any sale of securities outside an associated person's regular business and his employing member
have to disclose _______ but does not disqualify you
bankruptcy
regulatory elements
content determined by FINRA -within 120 days of second registration anniversary -every 3 yrs -failure to complete deactivates registration until completed
An offering is defined as the sale of a security. Regarding offerings, all of the following are true except
corporate securities can only be offered in public securities offerings.
not on form
education or martial status
complaints filed to FINRA how often
end of each quarter held for 4 yrs
MFP:
engaged in securities underwriting, sales, financial advisory, research, investment advice or comm with public investors
Hostile takeover
goes directly to the target
A customer wishes to sell short 1,000 shares of ABC. Prior to executing the order, the registered representative must
locate shares that can be lent to effect the sale.
MSRB Rule G-37
municipal securities rulemaking board -prevent pay to play -enforced by FINRA
$250 _________ for contribution made by municipal firm
not
passive investment is ______ considered an outside bus activity
not (LP or investment company share)
written notice is need even if ____ _______
not paid
Gains gotten from the sale of securities is an example
of capital gains for tax purposes.
home office
premise visit by principal of firm and FINRA expect the office to be treated like branch
conduct rule
private securities transaction
Political Contributions
rules intended to preserve investor confidence and mkt integrity -contributions should never be used to procure bus
Not MFP if soley to ______ or _______ or ministerial functions
sale or clerical
ineligibility and disqualification:
statutory disqualification -sanctioned by the SEC, another SRO, or foreign equivalent of SRO -misstatements willfully made -felony -misdemeanor involving money or securities within past 10 yrs
Principal:
supervise reps and are resp for seeing that the member form's policies and all regs are followed
For each transaction, a customer must be sent or given a written confirmation of the trade at or before the completion of the transaction, the settlement date. Information on that trade confirmation would include: 2 things
the commission charged on an agency transaction. the Committee on Uniform Securities Identification Procedures (CUSIP) number (if any).
power to revoke registration at the state level lies with
the state administrator
If a preferred shareholder received a $3.50 annual dividend each year, it could be assumed that
this is a 3.5% preferred class. An annual dividend of $3.50 simply tells you that this is a 3.5% preferred class of stock (3.5% × par ($100) = $3.50) or ($3.50 ÷ par ($100) = 0.035). The current market value is not used to calculate the fixed dividend, nor does this dividend amount tell us what common shareholders received.
Form U-5
with CRD in 30 days or termination date