Securities License Exam
Broker
1. A broker includes: an individual or firm that charges a fee or commission for executing buy and sell orders submitted by another individual or firm. 2. the role of a brokerage firm when it acts as an agent for a customer and charges the customers a commission for its services; and 3. any person engaged in the business of effecting transactions in securities for the accounts of others that is not a bank.
Customer
A customer is any individual, partnership, corporation, or legal entity is not a broker, dealer or municipal securities dealer --- that is, the public.
Deal
A dealer includes: the role of a brokerage firm when it acts a principal in a particular trade. A firm acts as a dealer when it buys or sells a security for its own account and at its own risk, then charges the customer a markup or markdown; and 2. any person. engaged in the business of buying and selling securities for their own account, either directly or through a broker, that is not a bank.
Member
A member of FINRA is any individual, partnership, Corporation, or legal entity admitted to membership in FINRA.
Associated Person (AP) of a Member
An associated person is any employee, manager, director , officer, or partner of a member broker-dealer or another entity (issuer, bank, etc.)or any person controlling, controlled by, or in common control with that member.
Prospectus
Generally, the term "prospectus" means any prospectus, notice, circular, advertisement, letter or communication, written or by radio or television, which offers any security for sale of confirm the sale of any security. There are several types of prospectuses defined throughout the license exam manual.
Sale and Offer to sell
The term "sale" or "sell" shall the disposition or interest in a security, for value. The term "offer for sale" or "offer" shall include every attempt or offer to dispose of, or offer to buy , a security of interest in a security, for value.
Security
Under the Securities Exchange Act of 1934, any note, stock bond, investment contract, variable annuity, profit-sharing or partnership agreement, certificate of deposit, option on a security, or other instrument of investment is commonly known as a security.
