Chapter 1
Assist Businesses that seek to raise capital through the issuance of securities.
They are the financial advisors to corporations and, in some cases, to governments
What are Investment bankers ?
Buying a stock on one exchange and simultaneously selling it on another exchange
what is referred to as Arbitrage
The North American Securities Administrators Association (NASAA) is an organization that consists of s
state regulators and is responsible for updating the states’ securities laws (Blue Sky Laws).
The SIPC protects the customers of a broker-dealer that is
defunct/ bankrupt
Under which federal law are firms, RRs, and exchanges registered?
Securities Exchange Act 1934
performs market analysis and studies both the markets and individual issuers in order to issue recommendations.
What is the research department
The reason for the creation of the Depository Trust Company was to provide
to provide a book-entry system to handle the increase in volume of securities transactions.
The Uniform Securities Act is
the state model law that is sometimes referred to as “Blue Sky Laws.
An SRO has the power to suspend an RR’s registration after a
hearing is held.
must be segregated from its investment banking department by information barriers.
what is the trading Department of a broker dealer
The quoted price of a non-listed stock can be found
on the OTC Pink Marketplace
The reason that the Investment Company Act of 1940 requires mutual funds to have a significant percentage of its directors be disinterested is
to protect shareholders against management impropriety
What are joint accounts considered by SIPC?
Separate accounts from individual accounts
responsible for maintaining a list of the company’s current shareholders and their contact information, and also assists in the transfer of shares
What is a transfer agent
Broker-dealers that receive a commission are acting in an a
agency capacity
The purpose of information barriers is
to limit the spread of non-public information within a broker-dealer.
What is a member firm?
A broker-dealer that is a member of FINRA
responsible for ensuring that a corporation doesn’t issue more shares than it’s authorized to issue.
what is the registrar
A firm that charges a markup on a stock transaction is acting in a
Principal capacity
In arbitration proceedings involving customers, the arbitration panel can consist of both
both industry and non-industry arbitrators.
If Mary has a cash account as well as an IRA account, what coverage will SIPC provide?
250,000$ x 2 accounts = 500,000 covered by SIPC