Ch 6
Requires delivery of a prospectus for the sale of new issues; It's anti-fraud provisions apply to all securities transactions.
What is the Securities Act of 1933?
The three types of orders an investor may place when entering an order to buy or sell a security.
What are Market, Limit, and Stop Orders?
When a Registered Representative makes unsolicited telephone calls to potential customers.
What is Cold Calling?
The type basic types of accounts in a brokerage firm.
What are Cash and Margin Accounts?
The Federal Regulator of the securities industry.
What is the Securities and Exchange Commission (SEC)?
The SEC adopted this Regulation to ensure that securities should not be distributed in a manipulated market.
What is Regulation M?
This type of Limit Order will expire if not executed or canceled.
What is a Good till Cancelled (GTC) a.k.a. Open Order?
The total amount that SIPC covers per person in the event a broker-dealer fails.
What is Reg-T?
A co-requisite qualification exam that must be taken either before or with a Specialized Licensing Exam.
What is the Securities Industry Essentials (SIE)?
Regulates "Restricted Stock" sold by anyone; Regulates amount of stock that can be sold by control persons in any 90-day period.
What is SEC Rule 144?
These types of Orders are reduced by the Designated Market Maker by the full dividend amount on the ex-date.
What are Buy Limit and Sell Stop Orders?
Turnover Rate, Cost-Equity Ratio, and Use of In and Out Trading; are all looked at when determining if this is happening.
What is Churning?
Occurs when the broker-dealer makes a margin loan to a customer, using the securities purchased as collateral.
What is Hypothecation?
A person who receives compensation for giving investment advice about securities but not for execution of transactions has this Series License.
What is the Series 65 or 66.
Money Laundering occurs in these three stages.
What are Placement, Layering, and Integration?
A subject quote that provides an estimated price range which the dealer feel they can obtain a security within a reasonable time (used for thinly traded stocks).
What is a Workout Market?
Members who make a recommendation to a customer must have this to prove the recommendation is suitable for the customer.
What is a Reasonable Basis (FACTS)?
Tyler has opened a margin account and for his first transaction wants to purchase $45,000 of securities. He will back this up with this amount of securities to be compliant with Reg T.
What is $45,000?
The Frequency in which the three below must be provided to customer.
1. FINRA Regulation Public Disclosure Hotline Number
2. FINRA Regulation Website Address
3. A statement as to the availability of the Investor Brochure
What is Annually?
Member Firms check these lists from OFAC to determine if a person is a known or suspected terrorist.
What are Specially Designated Nationals (SDN) lists?
National Securities Clearing Corp. (NSCC) and Fixed Income Clearing Corporation (FICC) are subsidiaries of this Company.
What is the Depository Clearing Company (DTCC)?
This type of risk is associated with unique circumstances of a particular company as they might affect the price of that company's securities. May be related to execution of business plan and experiences a period of poor earnings and resultant failure.
What is Business Risk?
Reg T requirements for a Margin Account Short.
What is
1. Minimum Equity of $2,000;
2. $0 - $2.50 ($2.50 per share), $2.50 - $5.00 (100% of market value), $5.00 - $10.00 ($5.00 per share), $10 and over (Reg T 50%)
Full records of Brokers leaving the industry remain available in Broker-Check for this period of time.
What is 10 Years?