Regulations: Securities Exchange Act of 1934
Which of the following CANNOT be a stabilizing bid for a new issue that has a Public Offering Price of $30 per share? A. $29.00 B. $29.88 C. $30.00 D. $30.13
$30.13 Stabilizing bids can only be entered at or below the public offering price, never above. If the bid were allowed to be placed above the public offering price, it would make the issue instantly "hot" and this is prohibited.
The 'penny stock rule' applies to customer purchases of securities that are not exchange listed which are priced below: a. $10 per share b. $5 per share c. $2 per share d. $1 per share
$5 per share
Under the "penny stock rule," a customer is considered to be "established" and does not have to sign a suitability statement to buy a penny stock if that customer has bought how many penny stock issues previously from that broker-dealer? A. 2 B. 3 C. 5 D. 10
3
A short seller is prohibited from covering short sales with offered securities purchased from an underwriter participating in the offering if the short sale occurred how many days prior to the pricing of the offered securities? a. 1 b. 2 c. 5 d. 10
5
Under Regulation M, the maximum restricted period for trading a subject security by a syndicate member that is NOT a market maker is: A. 1 day B. 5 days C. 10 days D. 20 days
5 days
Under regulation M, the maximum restricted period for trading a subject security by a syndicate member that is not a market maker: a. 1 day b. 5 days c. 10 days d. 20 days
5 days
Which of the following individuals would be considered an insider? I. A person who uses public information to trade in that company's stock for a profit II. A person who uses non-public information to trade in that company's stock for a profit III. A Chairman of a corporation who uses non-public information to trade in that company's stock for a profit IV. A wife of a Chairman of a corporation who uses non-public information to trade in that company's stock for a profit
A person who uses non-public information to trade in that company's stock for a profit A Chairman of a corporation who uses non-public information to trade in that company's stock for a profit A wife of a Chairman of a corporation who uses non-public information to trade in that company's stock for a profit
An officer of a company has been invited by a large mutual fund company to give a talk to the fund company's analysts about its business plans and prospects. At the talk, the officer inadvertently discloses material information that could affect the stock's price. Which statements are TRUE? I. A public announcement of the news must be made within 24 hours II. A public announcement of the news must be made within 10 business days III. The company must file an 8K with the SEC disclosing the information to avoid insider trading liability IV. The company must file a 10K with the SEC disclosing the information to avoid insider trading liability
A public announcement of the news must be made within 24 hours The company must file an 8K with the SEC disclosing the information to avoid insider trading liability
Which statements are TRUE about stabilizing bids? I. A stabilizing bid is placed by the syndicate manager II. A stabilizing bid is placed by each syndicate member III. Only 1 stabilizing bid is permitted at any time IV. Any number of stabilizing bids can be placed at any time
A stabilizing bid is placed by the syndicate manager Only 1 stabilizing bid is permitted at any time
Which of the following is (are) considered to be insiders? I. ABC corporation's president II. the spouse of ABC Corporation's president III. the in-house counsel of ABC corporation IV. an investor holding non-convertible senior ABC securities
ABC corporation's president the spouse of ABC Corporation's president the in-house counsel of ABC corporation
A customer inherits 3,000,000 shares of ABC stock, a company listed on the NYSE which has 10,000,000 shares outstanding. The customer is not a director or officer of the company. Which of the following statements is (are) true? I. the customer is defined as an "insider" under the Securities Exchange Act of 1934 II. the customer is prohibited from selling ABC stock short; however, the customer may short against the box at year end, as long as the position is covered within 20 days III. if the customer trades ABC stock at a profit after having held the stock for less than 6 months, the gain is forfeited IV. the customer must report trading activity to the SEC
All of them
If a customer is solicited to buy a "penny stock," which of the following statements are TRUE? I. Detailed financial information about the client must be obtained II. It should be determined if the customer is "established" with the firm III. If the customer is not "established," a suitability determination must be completed IV. Suitability determinations must be signed by the customer prior to executing any orders for "penny stocks"
All of them
The anti-fraud provisions of the Securities Exchange Act of 1934 apply to: I. individuals trading exempt securities II. individuals trading non-exempt securities III. broker-dealer firms trading exempt securities IV. broker-dealer firms trading non-exempt securities
All of them
Which of the following requires filing with the SEC? I. purchase of a 5% position in one company's stock II. an officer selling 1% of that company's stock III. broker-dealer net capital computation IV. corporate proxy material
All of them
Which statements are TRUE about the 'penny stock rule"? I. before confirmation of a trade in a 'penny stock' can be made with a new customer, a suitability determination must be completed, signed, and returned II. suitability statements are required for new customers who wish to purchase OTC equity securities valued at under $5 that are not included on NASDAQ III. suitability statements are not required for customer purchases of NASDAQ listed and exchanged securities IV. suitability statements are not required for customers who have either had cash or securities in custody of that firm in at least 1 year; or for customers who have bought 3 or more 'penny stock' issues previously form that firm
All of them
Municipal market participants are subject to which of the following rules? A. Anti-fraud Rule 10b-5 under the Securities Exchange Act of 1934 B. Prospectus delivery rules under the Securities Act of 1933 C. Issuer reporting requirements under the Securities Exchange Act of 1934 D. Indenture requirements of the Trust Indenture Act of 1939
Anti-fraud Rule 10b-5 under the Securities Exchange Act of 1934 Municipal bonds are "exempt" securities and thus are not subject to the provisions of the Securities Acts with the exception of the "anti-fraud" provisions. Municipal bonds do not have to provide a trust indenture; municipalities do not report to the SEC; no prospectus is required when selling a new municipal issue. However, fraudulent activities in the municipal market are covered by the Act of 1934.
Which of the following must be sent to customers of broker-dealers semi-annually? I. Broker-dealer securities inventory amounts II. Broker-dealer balance sheet III. Broker-dealer subordinated loan amounts IV. Broker-dealer net capital computation
Broker-dealer balance sheet Broker-dealer subordinated loan amounts Broker-dealer net capital computation
The Securities Exchange Act of 1934 regulates trading of all of the following EXCEPT: A. Commodities Futures B. Options C. Corporate Bonds D. Corporate Stock
Commodities Futures The Securities Exchange Act of 1934 does not regulate the trading of commodities, since these are not securities, and are not regulated under the Securities Acts. Rather, futures (commodities) are regulated by the CFTC - the Commodities Futures Trading Commission. The Securities Exchange Act of 1934 does regulate trading of all non-exempt securities, including common stocks, preferred stocks, corporate bonds, options on securities, etc.
Which of the following issuers must report to the SEC under the Securities Exchange Act of 1934? I. Corporations II. Investment Companies III. Municipalities IV. Federal Agencies
Corporations Investment Companies Only corporations and investment companies (which are either corporations or trusts) file annual and semi-annual reports with the SEC. Municipal and federal issuers are exempt from the Securities Exchange Act of 1934.
Margins on government and municipal securities are set by (the): A. MSRB B. FINRA C. FRB D. SEC
FINRA
When is a foreign broker-dealer permitted to solicit U.S. based clients? I. If the foreign broker-dealer establishes an SEC-registered U.S. subsidiary II. If the foreign broker-dealer only offers exempt securities III. If the foreign broker-dealer only deals with major institutional investors IV. If the foreign broker-dealer only deals with accredited investors
If the foreign broker-dealer establishes an SEC-registered U.S. subsidiary If the foreign broker-dealer only deals with major institutional investors
Which of the following statements are TRUE regarding margin regulations? I. In-house rules may be more stringent than FINRA rules II. Exchange rules may be more stringent than Federal Reserve rules III. In-house rules may be less stringent than FINRA rules IV. Exchange rules may be less stringent than Federal Reserve Rules
In-house rules may be more stringent than FINRA rules Exchange rules may be more stringent than Federal Reserve rules
Which of the following statements are TRUE regarding a broker-dealer holding margin and fully paid securities? I. Margin securities can be commingled with the securities of other customers and rehypothecated II. Margin securities must be segregated and placed in safekeeping III. Fully paid securities can be commingled with the securities of other customers and rehypothecated IV. Fully paid securities must be segregated and placed in safekeeping
Margin securities can be commingled with the securities of other customers and rehypothecated Fully paid securities must be segregated and placed in safekeeping
Which of the following statements are TRUE regarding corporate officers who wish to trade their own company's stock? I. Officers are prohibited from selling their company's stock short except for "short against the box" trades II. Officers are allowed without restriction to sell their company's stock short III. Officers must file change of holding reports with the SEC IV. Officers do not have to file change of holding reports with the SEC
Officers are prohibited from selling their company's stock short except for "short against the box" trades Officers must file change of holding reports with the SEC
A detailed suitability determination must be completed by the registered representative and signed by the customer before confirmation of sale of a(n): A. NASDAQ security B. NYSE listed security C. Pink sheet security under $5 D. CBOE listed option
Pink sheet security under $5 The "penny stock rule" (Rules 15g-1 through 15g-6) requires that new customers who receive a recommendation and purchase non-exchange listed securities (meaning OTCBB or Pink Sheet issues) priced under $5 per share sign and return a suitability statement before sale can be confirmed. This rule is intended to stop "boiler room" high pressure phone sales of speculative penny stocks.
The Securities Exchange Act of 1934 regulates all of the following markets EXCEPT: A. Primary B. Secondary C. Third D. Fourth
Primary
The Securities and Exchange Commission is empowered to administrate which of the following Acts? I. Uniform Securities Act II. Securities Act of 1933 III. Trust Indenture Act of 1939 IV. Investment Company Act of 1940
Securities Act of 1933 Trust Indenture Act of 1939 Investment Company Act of 1940 The SEC administrates the Securities Act of 1933; the Securities Exchange Act of 1934; the Trust Indenture Act of 1939; and the Investment Company Act of 1940. The Uniform Securities Act is more commonly known as the "Blue Sky" state law, and is adopted "state by state." The SEC, a Federal agency, has no jurisdiction over activities within each state and does not administrate this Act.
The Securities Exchange Act of 1934 regulates which of the following? I. Futures transactions II. Securities transactions III. Futures brokers IV. Securities brokers
Securities transactions Securities brokers
Which of the following statements are TRUE regarding corporate reports sent to shareholders? I. The 10K report consists of the annual financial statements II. The 10K report consists of the quarterly financial statements III. The 10Q report consists of the annual financial statements IV. The 10Q report consists of the quarterly financial statements
The 10K report consists of the annual financial statements The 10Q report consists of the quarterly financial statements Corporate annual reports are 10K reports which are audited reports. The 10Q is a quarterly report which is unaudited. Corporate annual reports contain the following audited financial statements - Income Statement; Balance Sheet; Statement of Changes to Retained Earnings; and Statement of Sources and Uses of Cash.
Under the provisions of the Securities Exchange Act of 1934, which of the following must be registered? I. The exchanges that trade securities II. Member firms III. Sales employees of member firms IV. Clerical employees of member firms
The exchanges that trade securities Member firms Sales employees of member firms
Which statements are TRUE about an issuer making a tender offer for its non-convertible bonds? I. The minimum life of the initial offer is 5 business days II. The minimum life of the initial offer is 10 business days III. Each "sweetening" of the offer must extend the offer for another 5 business days IV. Each "sweetening" of the offer must extend the offer for another 10 business days
The minimum life of the initial offer is 5 business days Each "sweetening" of the offer must extend the offer for another 5 business days
Which statements are TRUE about a tender offer for common shares? I. The offer must remain open for at least 10 business days II. The offer must remain open for at least 20 business days III. Each "sweetening" of the offer must extend the offer for an additional 10 business days IV. Each "sweetening" of the offer must extend the offer for an additional 20 business days
The offer must remain open for at least 20 business days Each "sweetening" of the offer must extend the offer for an additional 10 business days
The Vice-President of ACME Corporation, an NYSE listed firm, places an order to buy 10,000 shares of ACME common at the market. 3 months later, ACME stock's price has increased by 20% and the officer places an order to sell. Which statements are TRUE? I. The sale of the stock is subject to Rule 144 II. The stock cannot be sold unless it has been held, fully paid, for 6 months III. The sale is prohibited until a "waiver of liability" has been obtained from the issuer IV. The officer must forfeit the profit on the sale
The sale of the stock is subject to Rule 144 The officer must forfeit the profit on the sale
An officer of a listed company calls his registered representative and tells him to buy a large block of that stock. Prior to placing the order to buy, the registered representative calls ten of his customers and tells them to buy that company's stock. Which statement is TRUE? A. This action is permitted under SEC rules B. This action is a violation of the insider trading rules C. This action is an ethical business practice D. This action is beneficial to the customer, and thus is allowed
This action is a violation of the insider trading rules When the registered representative received the buy order from the officer, he is obligated to execute that order before acting on the information he has received. Once the order is executed, it is public information. At this point, he can trade for himself or his customers, and he is no longer considered to be an "insider." In effect, the registered representative is "front running" the officer by telling his other customers to buy before placing the officer's buy order. This is a violation of the Securities Exchange Act Rule 10b-5.
Which of the following brokerage firm units would need to be separated under "Chinese Wall" requirements? I. U.S. equities trading desk separated from Asian equities trading desk II. U.S. equities trading desk separated from the firm's U.S. investment banking unit III. U.S. equities trading desk separated from the firm's U.S. research unit IV. U.S. equities trading desk separated from the firm's foreign equities trading desk
U.S. equities trading desk separated from the firm's U.S. investment banking unit U.S. equities trading desk separated from the firm's U.S. research unit The "Chinese Wall" as used in the securities industry, is the complete separation of a broker-dealer's investment banking unit or research unit from its trading unit. In its normal operations, an investment banking unit may advise on takeovers; or receive other confidential information that could influence the price of an issuer's securities once the information is public. Broker-dealers establish a "wall" between the investment banking unit and the trading unit, so that this information is not received by the firm's traders in advance of its release to the public. This is accomplished by referring to the issuer's name as a codeword only; by severely restricting the number of people that work on sensitive projects, etc. In this manner, the firm's traders cannot profit from the information in advance of its release to the public. This is critical, since to do so would be a violation of the "Insider Trading" provisions of the Securities Exchange Act of 1934. The same problem applies to the flow of information between a firm's research unit and trading unit, so a Chinese Wall must be established here as well.
Stabilization of new issues is: I. a provision of the Securities Act of 1933 II. a provision of the Securities Exchange Act of 1934 III. permitted at, or above, the Public Offering Price IV. permitted at, or below, the Public Offering Price
a provision of the Securities Exchange Act of 1934 permitted at, or below, the Public Offering Price Since a stabilizing bid is placed in the trading (secondary) market, the rules for stabilizing bids come under the Securities Exchange Act of 1934. Stabilizing bids are permitted at, or below, the Public Offering Price - never above.
If a publicly traded corporation declares bankruptcy: I. a 10K report must be filed II. an 8K report must be filed III. the required report must be filed within 1 business day IV. the required report must be filed within 4 business days
an 8K report must be filed the required report must be filed within 4 business days Corporations are required to file 8K reports within 4 business days of significant events such as a declaration of bankruptcy, merger, change in the Board of Directors, etc. The 8K is filed with the SEC, and is a public document.
SEC Rule 10b-18 allows an issuer to buys its shares in the open market: a. at any price that is reasonably related to the current market b. at the highest independent bid or the last reported sale price, whichever is higher c. at the lowest independent offer or the last reported sale price, whichever is lower d. under no circumstances, since this is considered to be market manipulation
at the highest independent bid or the last reported sale price, whichever is higher
The chairman of XYZ Corporation, while playing golf with a neighbor, casually mentions that this quarter's earnings are likely to be lower than expected. Based on this information, the neighbor sells short XYZ stock the next day. Which statement is TRUE? a. only the chairman has violated insider trading rules b. only the neighbor has violated insider trading rules c. both the neighbor and the chairman have violated insider trading rules d. neither the chairman nor the neighbor has violated insider trading rules
both the neighbor and the chairman have violated insider trading rules
Rule 103 of Regulation M requires that a market maker in a stock that is also a syndicate member in an "add-on" offering of that issue, during the 20-day cooling off period: A. can only place a stabilizing bid at, or below the Public Offering Price B. can only position trade the stock C. cannot fill any orders for that security D. can either resign as a market maker or can act as a passive market maker
can either resign as a market maker or can act as a passive market maker
Which if the following issuers must report to the SEC under the Securities Exchange Act of 1934? I. corporations II. investment companies III. municipalities IV. federal agencies
corporations investment companies
The Securities and Exchange Commission was: I. created under the Securities Act of 1933 II. created under the Securities Exchange Act of 1934 III. given regulatory authority over securities exchanges IV. given regulatory authority over futures exchanges
created under the Securities Exchange Act of 1934 given regulatory authority over securities exchanges The Securities and Exchange Commission was created under the Securities Exchange Act of 1934. It has overall regulatory authority over the securities markets and securities market participants. It has no power over the futures markets - these are regulated by the CFTC - the Commodities Futures Trading Commission.
Under regulation M, Tier 1 securities are those with a minimum: I. daily trading volume of $100,000 II. daily trading volume of $1,000,000 III. market float of $25,000,000 IV. market float of $150,000,000
daily trading volume of $1,000,000 market float of $150,000,000
An issuer is required to make an 8K filing with the SEC for all of the following events EXCEPT: A. declaration of a cash dividend B. election of new members of the Board of Directors C. declaration of bankruptcy D. proposal of a merger with another corporation
declaration of a cash dividend An 8K filing with the SEC is required by a corporation if a "major event" happens at the company. These include if there is a change in the composition of the Board of Directors; if the company declares bankruptcy; if there is a major acquisition or divestiture of assets; if the company proposes a merger; or if any other major corporate event occurs. The notice must be filed no later than 4 business days after the event. Declaration of a dividend is a regular event, and no filing is required when this occurs.
Fines assessed for convictions involving violations of insider trading are paid to the: a. internal revenue service b. department of treasury c. securities and exchange commission d. department of justice
department of treasury
A corporate executive holds a meeting with a select group of high-producing registered representatives and gives information about the company's expected revenue and income for the upcoming quarter that is extremely positive. The representatives are permitted to: A. buy the stock for their personal accounts only B. recommend that their customers buy the stock C. recommend that their family members buy the stock D. do nothing with the information and should report the situation to the firm's compliance department
do nothing with the information and should report the situation to the firm's compliance department Regulation FD (Fair Disclosure), passed in 2000, is basically an elaboration of the insider trading rules. It prohibits issuers from making selective disclosure of non-public information to research analysts, mutual fund managers, and other industry professionals, unless at the same time, the information is broadly disseminated to the public If such selective disclosure is made and trades result, the corporate officers giving the information become "tippers" and the recipients become "tippees."
The Securities Exchange Act of 1934 established "self regulatory organizations" (SROs) and empowered these organizations to do all of the following EXCEPT: A. set guidelines for fair dealing with the public B. establish commission rates to be charged to the public C. take administrative action against broker-dealers that violate industry regulations D. establish arbitration procedures to settle intra-industry disputes
establish commission rates to be charged to the public
All of the following statements about the Securities Exchange Act of 1934 are true EXCEPT the: A. general provisions of the Act apply to non-exempt securities B. general provisions of the Act apply to exempt securities C. anti-fraud provisions of the Act apply to non-exempt securities D. anti-fraud provisions of the Act apply to exempt securities
general provisions of the Act apply to exempt securities The general provisions of the Securities Exchange Act of 1934 apply to non-exempt securities only. For example, holders of municipal bonds (an exempt security) cannot be considered to be "insiders" while a holder of corporate stock (a non-exempt security) can be an "insider." However, the anti-fraud provisions of the Act apply to both exempt and non-exempt securities. Thus, if a person fraudulently trades municipal bonds (an exempt security), this person is in violation of the Act.
SEC Rule 10b-5-1: a. is the 'catch-all' fraud rule that makes any deceptive or manipulative practice in connection with the sale of a security potentially fraudulent under the Securities Exchange Act of 1934 b. gives officers of publicly held companies a safe harbor from being charged with an insider trading violation if they establish a pre-arranged trading plan for that issuer's securities c. prohibits the purchase or sale of an issuer's securities based on material nonpublic information in breach of duty of trust owed to the issuer or shareholders of that security d. prohibits any person, in connection with a tender offer for securities, to bid for or purchase the security which is subject of the tender offer through any means other than via the offer
gives officers of publicly held companies a safe harbor from being charged with an insider trading violation if they establish a pre-arranged trading plan for that issuer's securities
A broker-dealer may hold fully paid customer securities: a. when authorized in writing by the customer b. if the securities are segregated and held in safekeeping c. if the firm notifies the customer every 3 months as to the amount of securities and the fact that they are "not segregated" d. only if the customer is traveling
if the securities are segregated and held in safekeeping
A registered representative receives an order from a corporate issuer to buy 500,000 shares of that issuer's stock in the market, 5 minutes prior to market close. The registered representative should: A. reject the order B. accept the order as given C. inform the company that this is a possible market manipulation under the Securities Exchange Act of 1934 D. route the order to an ECN
inform the company that this is a possible market manipulation under the Securities Exchange Act of 1934
A 13D notice would be filed when a(n): A. corporation has a change in its Board of Directors B. investor accumulates a 5% or greater position in the common stock of an issuer C. corporation reports its annual results to the Securities and Exchange Commission D. investor wishes to sell shares of restricted stock in the public market
investor accumulates a 5% or greater position in the common stock of an issuer Investors who accumulate a 5% or greater position in the common stock of one registered issuer are required to file a 13D notice with the SEC within 10 business days of date that the 5% threshold was passed. This information is made public (and is of great interest to the management of the company, since the new large stockholder will probably want a say in how the company is being run!).
The provisions of the Securities Exchange Act of 1934 apply to all of the following activities EXCEPT: a. trading of corporate bonds b. trading of municipal bonds c. issuance of municipal bonds d. issuance of corporate financial statements
issuance of municipal bonds
Which of the following usually acts as the stabilizing market maker? a. issuer b. managing underwriter c. any member of the syndicate d. any member of the selling group
managing underwriter
The SEC requires financial reports from all of the following EXCEPT: A. municipal issuers B. corporate issuers C. municipal broker-dealers D. corporate broker-dealers
municipal issuers Municipal issuers are exempt from the provisions of the Securities Acts, as are all other governmental issuers. The SEC has authority over corporate issuers, and requires financial reports from corporations. Broker-dealers, including municipal broker-dealers, are registered through FINRA under SEC oversight; and their financial reports are filed with both FINRA and the SEC.
All of the following are included in the 10K report filed by corporate issuers with the SEC EXCEPT: A. income statement B. balance sheet C. retained earnings statement D. net capital computation
net capital computation Corporate annual reports contain the following audited financial statements - Income Statement; Balance Sheet; Statement of Changes to Retained Earnings (this shows earnings added for the year and dividends paid from retained earnings for that year); and Statement of Sources and Uses of Cash (this shows cash received that year from income earned; stock and bond offerings; and disposals of equipment; and cash paid that year for equipment purchases, pay-down of debt; dividends, etc.) Net capital computations are only required for broker-dealers registered with the SEC.
Pre-arranged trades by insiders are: a. prohibited b. permitted under Rule 10b-5 c. permitted under Rule 10b-5-1 d. permitted under regulation FD
permitted under Rule 10b-5-1
The Securities Exchange Act of 1934 is primarily concerned with: A. registration of exempt issues B. registration of non-exempt issues C. prevention of manipulation and fraud in the primary market D. prevention of manipulation and fraud in the secondary market
prevention of manipulation and fraud in the secondary market The Securities Act of 1933 requires that new issues that are not exempt from the Act be registered with the SEC. Thus, the 1933 Act is concerned with the primary (new issue) market. The Securities Exchange Act of 1934 consists of a variety of rules covering the trading (secondary) market that are primarily intended to prevent manipulation and fraud.
During a tender offer, which of the following activities are prohibited? I. purchase the stock in a cash account and tender 2 business days after the trade date II. purchase a call option in a cash account and tender 2 business days after the trade date III. tender shares held in an arbitrage account where the position is "short against the box" IV. exercise a call option held in a cash account and issue irrevocable instructions to deliver the acquired shares
purchase a call option in a cash account and tender 2 business days after the trade date tender shares held in an arbitrage account where the position is "short against the box"
All of the following are covered under the Securities Exchange Act of 1934 except: a. registration of broker-dealers b. registration of new issues c. stabilization of new issues d. registration of exchanges
registration of new issues
Issuers that wish to give "earnings guidance" to research analysts must conform with the provisions of SEC: a. regulation SB b. regulation FD c. regulations SK d. regulations SP
regulation FD
SEC regulation FD covers: a. notification to customers of a member firm's privacy policies and practices b. selective disclosure of material non-public information by issuers c. standardization of disclosure of financial and non-financial information by issuers d. registration filings with the SEC by small business issuers
selective disclosure of material non-public information by issuers
Broker-dealers are required to report their computed net capital to customers: a. monthly b. quarterly c. semi-annually d. annually
semi-annually
The Securities Exchange Act of 1934 established "self regulatory organizations" (SROs) and empowered these organizations to: I. set guidelines for fair dealing with the public II. handle complaints against broker-dealers for securities law violations III. take administrative action against broker-dealers that violate industry regulations IV. fix commission rates to be charged to public customers
set guidelines for fair dealing with the public handle complaints against broker-dealers for securities law violations take administrative action against broker-dealers that violate industry regulations
Under Federal law, stock can be tendered from all of the following accounts EXCEPT a: A. cash account B. long margin account C. restricted margin account D. short margin (borrowed) account
short margin (borrowed) account Under the "short tender rule," a person cannot tender borrowed shares. To tender stock, the person must be in a "net long" position in that security. Long stock can be held in a cash or margin account. Restriction (an account below 50% initial Regulation T margin) has no bearing on tendering shares. If shares are tendered from a margin account, the account must still meet the exchange minimum maintenance margin after those shares leave the account. If not, a maintenance call will be generated to bring the account back to minimum margin.
The Securities and Exchange Commission was created by: A. a Constitutional amendment B. a Supreme Court decision C. the Securities Act of 1933 D. the Securities Exchange Act of 1934
the Securities Exchange Act of 1934 The Securities and Exchange Commission was created by the Securities Exchange Act of 1934 (which was passed in the very beginning of 1934, while the 1933 Act was passed at the very end of 1933 - so these 2 Acts were really enacted "back-to-back").
All of the following meet the statutory definition of an 'insider' except: a. an officer of a company b. the holder of 10% of the equity securities of a company c. the holder of 10% of the debt of a company d. the director of a company
the holder of 10% of the debt of a company
Under Regulation M, which statement is TRUE regarding stabilized bids entered by market makers? a. stabilizing bids can only be maintained for 5 consecutive business days b. stabilizing bids can only be maintained for 30 calendar days c. stabilizing bids can only be maintained for 45 calendar days d. there is no time limitation on the period that a stabilizing bid can be maintained
there is no time limitation on the period that a stabilizing bid can be maintained