Ultimate Unit 10 Review
The Federal Deposit Insurance Corporation (FDIC) protects depositors' money in FDIC member banks to what limit?
$250,000 per person, per account
A minimum four-year record retention is required for
Customer complaints
Which of the following records must be kept for six years?
Customer statements & Customer new account firms
The federal agency that receives and analyses suspicious activity reports is which of the following?
Financial Crimes Enforcement Network (FinCEN)
How long must a FINRA member firm maintain a file copy of a complaint?
Four years
Schmidt, a customer, has sent a written complaint to a firm principal. After a conversation with the customer, the principal was able to resolve the customer's concerns. How long must the complaint be held on file after the resolution?
Four years
How long must record of a customer complaint be retained?
Four years after resolution
Which of the following cannot enforce their own rules?
MSRB
Deanfield and Chatham Investments, LLC has recently registered as a broker-dealer with the SEC and been accepted as a FINRA member firm. They update their website to prominently display this fact at the top of their site and include large images of both organizations' logos. This is
Not allowed because it is a misrepresentation
Financial markets encompass
equity, debt, currency, and derivative products
The MSRB has no authority over
municipal governments
The law that provides the legal framework for state registration of securities is
the Uniform Securities Act
If a married couple have a joint account with a market value of $1 million and a debit balance of $600,000, all of which is in securities, how much coverage would this account have?
$400,000 (Reasoning: joint account has a maximum coverage of $500,000; however, in a margin account only the equity is covered, so the debit balance is subtracted from the market value, leaving $400,000 equity)
Darrell has an individual account at Seacoast Securities, Inc., an SIPC firm that holds $300,000 in cash; $100,000 in various stock; and $100,000 in the Seacoast Money Market Fund. If Seacoast Securities fails how much coverage does Darrell have?
$450,000 (Reasoning: SIPC covers securities and cash at a broker-dealer up to a maximum of $500,000, but no more than $250,000 in cash. A money market fund is a type of security. Darrell is covered for $200,000 in securities and $250,000 in cash for a total of $450,000.)
Cooper and Belle, spouses, have a checking account at Gloria City National Bank. The balance is $450,000. What is their protection from FDIC if Gloria City Bank fails?
$450,000 - split evenly between two people
FINRA is the primary regulator in the United States for
Broker-dealers & registered representatives
Accusations of Financial Industry Regulatory Authority (FINRA) Conduct Rule violations will heard and handled under the
Code of Procedure
Accusations of Financial Industry Regulatory Authority (FINRA) Conduct Rule violations will heard and handled under the
Code of procedure
Which of the following is the largest self-regulating organization (SRO)?
FINRA
Which of these is not a division of the Treasury Department with some level of oversight for the securities industry? A. Financial Crimes Enforcement Network B. Financial Industry Regulatory Authority C. IRS D. Office of the Comptroller of the Currency
Financial Industry Regulatory Authority
Which of the following organizations looks to promote self-discipline among members and investigate and resolve grievances between the public and members and between members?
Financial Industry Regulatory Authority (FINRA)
Sennacherib Partners, a broker-dealer partnership, maintains its records to meet or exceed regulatory requirements. Once a year, the partners gather for the annual partnership meeting. In order to meet the regulatory requirement, how long must Sennacherib maintain the minutes from the most recent partnership meeting?
For the life of the partnership
Which of these would not be fully covered by SIPC insurance? A) Holding $300,000 in a money market and $200,000 in mutual funds B) Holding $250,000 in cash and $250,000 in the Windmill Commodity ETF C) Holding $250,000 in index funds, $200,000 in Treasury bonds, and $50,000 in gold D) Holding $400,000 in junk bonds and $100,000 in cash
Holding $250,000 in index funds, $200,000 in Treasury bonds, and $50,000 in gold
In which circumstances may a FINRA member firm conduct securities business with a nonmember broker-dealer?
If the nonmember broker dealer is a foreign firm and properly registered in their home jurisdiction
Amendments to articles of incorporation are kept
Indefinitely
MSRB rules apply to all of the following except A) municipalities. B) municipal dealers. C) investment bankers. D) FINRA member firms performing trades with municipal bonds.
municipalities.
The SEC has regulatory authority over all of these entities except A) exchanges. B) FINRA. C) Securities Information Providers (SIPs). D) municipalities.
municipalities.
A registered securities broker-dealer that does not comply with Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC) rules and regulations is subject to each of the following sanctions except A. censure B. limits on activities, functions, or operations C. reductions in Securities Investor Protection Corporation D. partial or full suspension of its registration
reductions in Securities Investor Protection Corporation
The mission of the Financial Crimes Enforcement Network is to
safeguard the financial system from illicit use
Stock ledgers, a record of stocks owned by the firm, are maintained for at least
six years
A customer submits a written complaint stating that funds were stolen from an account held at a member broker-dealer. Resolution of this complaint will take place by
the Code of Procedure (COP)
All of these enforce MSRB rules except A) FINRA. B) the Securities Exchange Commission. C) the MSRB Enforcement Department. D) the Federal Reserve Board.
the MSRB Enforcement Department.
Bob's Discount Brokerage applied for FINRA membership and was denied. Bob wants to appeal this decision. The first appeal goes to
the NAC (National Adjudicatory Council)
The Securities Exchange Commission was authorized by
the Securities Exchange Act of 1934
FOCUS reports, U4 forms, and order tickets are examples of records that must be kept for
three years
All of the following are records that are kept for the life of the firm except A) articles of incorporation. B) trade blotters. C) board meeting minutes. D) stock book.
trade blotters.
If an arbitration agreement has not been signed, under which two of the following circumstances would a dispute between a Financial Industry Regulatory Authority (FINRA) member firm and a retail customer go to arbitration?
The dispute cannot otherwise be resolved to the satisfaction of both parties & the customer requests that the dispute go to arbitration
Which of the following federal securities acts provides the legal framework for the registration of securities at the state level?
Uniform Securities Act
Dwight was appointed a principal for Seacoast Securities in June of 1996. He continued in the position until 2012, when he left to start his own firm. How long did Seacoast need to maintain the record of his principal designation?
Until 2018
The Securities Investors Protection Corporation protects investors from the financial failure of
broker-dealers
Under the Securities Exchange Act of 1934, registration is required for
broker-dealers
The Hoffman Equipment Company of Anaheim, California is preparing to sell shares to the public in an IPO. They plan to sell exclusively to residents of the state of California and use the proceeds to build a new showroom in Long Beach, California. This offer would need to be registered with
The administrator of the state
Which of the following pairs are not covered by the Federal Deposit Insurance Corporation (FDIC) at any level? A. Savings accounts and annuities B. Certificates of deposit and self-directed IRAs C. Mutual funds and annuities D. Certificates of deposit and mutual funds
Mutual funds and annuities
Appeals on FINRA decisions first go to an internal group called the
National Adjudicatory Council. NAC decisions may be appealed up to the SEC, and then the courts.
Under the Uniform Securities Act of 1956, who is responsible for enforcement of state securities regulations?
The administrator
All of the following are self-regulatory organizations (SROs) except a. Municipal Securities Rule Board (MSRB) b. Securities and Exchange Commission (SEC) c. New York Stock Exchange (NYSE) d. Financial Industry Regulatory Authority (FINRA)
Securities and Exchange Commission
How long do blotters, general ledgers, and stock records need to be maintained?
Six years
Which of the following agencies collects and disseminates intelligence on financial transactions?
The Financial Crimes Enforcement Network
Under the Uniform Securities Act (USA), state laws require that registered representatives must register in a state in which of the following circumstances?
The registered representative is a resident of the state & the registered representative solicits business in the state
Robert and Annie, a married couple, have $400,000 on deposit in a savings account at the First National Bank of Richfield. What is their protection from SIPC if the banks fails?
There is no coverage. SIPC covers BDs, not banks.
A firm's monthly financial report must be kept for how long?
Three years
Records of advertising, customer confirmations, customer order tickets, and U5 forms need to be retained for how many years?
Three years
The following records must be kept for how many years? - A list of the offices where registered representatives conduct business - Compensation records for registered representatives - The firm's compliance manuals
Three years
Tony was fired for cause from Great Plains Investments. A U5 Form was promptly filed stating that the cause was rude treatment of coworkers creating a hostile work environment. Great Plains will keep the U5 record for a minimum of
Three years
FinCEN is a bureau of what department within the federal government?
Treasury
A customer has multiple accounts at a bank that also owns accounts at a broker-dealer. All of the following accounts would be covered by FDIC insurance up to the specified limits except A. an IRA in a five year CD B. both spouses' individual savings account C. a joint savings account with a spouse D. a checking account in a money market mutual fund
a checking account in a money market mutual fund
An exchange has some degree of regulatory authority over all of the following except A) floor traders. B) dealers in the third market. C) exchange members. D) designated market makers.
dealers in the third market.
