UNIT 8

A broker-dealer that accepts funds and securities from customers and its correspondent member firms would most likely be which of the following?

A carrying firm

What kind of firm holds funds and securities of the fully disclosed or introducing firm's customers and performs related functions, such as sending confirmations and statements for them. Those firms for whom the carrying firm performs these services are known as their correspondents.

Self clearing (carrying) firm

A market in which exchange-listed securities are traded in the over-the-counter (OTC) market would best be described as...

Third Market

Who is legally appointed to manage as a fiduciary assets in a trust?

Trustee

A broker-dealer that accepts the risk of holding a particular security in its account to facilitate trading and provide liquidity in that security is best described as..

a market maker

A customer (an institution) selects one member to provide custody and financing of securities and executes trades with other firms known as executing brokers is an example of...

a prime brokerage account

An institutional investor selects a single Financial Industry Regulatory Authority (FINRA)/NYSE member firm to provide for financing and custody of securities while orders to buy or sell are placed with executing brokers. This is an example of...

a prime brokerage account.

All of the following are associated with being a carrying firm except...

being a fully disclosed firm

The transfer agent for a corporation is responsible for

maintaining records of ownership, canceling old and issuing new certificates, ensuring that its securities are issued in the correct owner's name, and handling problems relating to lost, stolen, or destroyed certificates

A broker-dealer that accepts the risk of holding a particular security in its account to facilitate trading and provide liquidity in that security is best described as...

market maker

Trading on an exchange happens between the ?, not employees.

members

Some institutions can function as a depository and intermediary for settling transactions between buyers and sellers of securities. All of the following are acceptable for this purpose except...

national banks.

A fully disclosed broker-dealer is unable to clear transactions themselves, they are not a clearing agent or carrying firm and therefore cannot...

take custody of funds and securities

Registrars are licensed by the states and provide audit and oversight services for the...

transfer agents

To establish the best bid, a buying broker-dealer must initiate a bid at least $? higher than the current best bid. The best offer by a selling broker-dealer must be at least $? lower than the current best offer.

$.01

The transfer agent for a corporation is responsible for...

-ensuring that its securities are issued in the correct owner's name -canceling old and issuing new certificates -maintaining records of ownership; and -handling problems relating to lost, stolen, or destroyed certificates.

An institution or a person responsible for making all investment, management, and distribution decisions in an account maintained in the best interests of another who has been legally appointed to provide these services is best described as...

A trustee

What type of firm segregate customer funds and securities from the firms' funds and securities?

Carrying firm

Which type of firm execute trades, clear and settle transactions, take custody of customer funds and securities, and handle all back-office tasks such as sending trade confirmations and statements for themselves as well as for other broker-dealers classified as introducing or fully disclosed firms?

Carrying firm

accepting customer securities, being able to clear customer transactions, and accepting customer funds are characteristics of what type of firm?

Carrying firm

Correspondent firms would be likely to have relationships with which of the following types of broker-dealers?

Fully disclosed

A market for institutional investors in which large blocks of stock, both listed and unlisted, trade in transactions unassisted by broker-dealers describes...

The Fourth Market

True or false: A BD is both a broker and a dealer, but may not act in both capacities on the same transactions.

True Dealer- trades from inv. and profits on the spread broker- trades on behalf of customer and charges commission

A broker-dealer that executes trades and settles transactions for another broker-dealer is called...

a carrying firm

Your broker-dealer, rather than clear its own securities transactions, chooses to introduce its business to another firm that will clear, processes and handle all back-office operations for it. The firm receiving the business is known as...

a carrying firm

A broker-dealer that executes trades and settles transactions for another broker-dealer is called...

a carrying firm.

Who receives and delivers payments and securities on behalf of both parties?

clearing agency

Acting as an intermediary in a trade is the function of the...

clearing corporation

Carrying firms are also known as...

clearing firms

A clearing corporation agent or depository for securities transactions can be a...

commerical bank

A fiduciary may or may not be a professional, depending on the role and the type of account he oversees. Note that an investment adviser is always a...

fiduciary

It is expected that financial markets...

have transparent pricing for assets (align with supply and demand)

The OTC market works through an...

interdealer network

A fully disclosed broker-dealer is one that...

introduces its business to a carrying firm to clear transactions.

A firm that chooses to introduce its customers' business to another firm to clear and process transactions, as well as handle all back-office tasks such as sending trade confirmations and taking custody of customer funds and securities, is known as an...

introducing or fully disclosed firm

Secondary market transactions would include all of the following except...

sale of $10 million of corporate bond by a broker-dealer acting as an underwriter. (underwriters help issuers bring their securities to market in the primary market.); would need to be a market maker