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Question 1 of 10
1. Question
Which of the following is correct in relation to “private securities transaction”?
Correct
If any securities transaction is made outside the regular course of an associated person’s employment with a member, it shall be treated as “private securities transaction”. This transaction includes new security offerings not registered with the Commission.
Incorrect
If any securities transaction is made outside the regular course of an associated person’s employment with a member, it shall be treated as “private securities transaction”. This transaction includes new security offerings not registered with the Commission.
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Question 2 of 10
2. Question
Which of the following terms describe a compensation paid directly or indirectly to a member, such as commissions, finder’s fees, securities or rights to acquire securities, tax benefits, or rights of participation in profits?
Correct
A selling compensation is a benefit arising from whatever source in connection with the purchase or sale of a security. This compensation may be given in cash, additional rights, or expense reimbursements.
Incorrect
A selling compensation is a benefit arising from whatever source in connection with the purchase or sale of a security. This compensation may be given in cash, additional rights, or expense reimbursements.
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Question 3 of 10
3. Question
Prior to private securities transactions of an associated person, which of the following must be seen in a written notice?
I. Detailed proposed transaction
II. Person’s proposed role
III. Details on receiving selling compensation in connection with the transaction
IV. Details on the previous agreement with another clientCorrect
In participating in a private securities transaction, an associated person must describe the detailed proposed transaction and his proposed role together with the fact that he has received or expecting to receive a selling compensation. A single written notice may also be provided in the case where no selling compensation has been or expecting to be received.
Incorrect
In participating in a private securities transaction, an associated person must describe the detailed proposed transaction and his proposed role together with the fact that he has received or expecting to receive a selling compensation. A single written notice may also be provided in the case where no selling compensation has been or expecting to be received.
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Question 4 of 10
4. Question
Which of the following statements is incorrect in relation to the registration of General Securities Principal under FINRA 1220?
I. If a principal’s activities include functions of a Compliance Officer, then he may register as a Research Principal.
II. If a principal’s activities include functions of a Government Securities Principal, then he may register as a Direct Participation Programs Principal.
III. If a principal’s activities are limited solely to the functions of a General Securities Sales Supervisor, he is required to register as Private Securities Offerings Principal.
IV. If a principal’s activities are limited to the functions of a Supervisory Analyst, he is required to register as a General Securities Sales Supervisor.Correct
Under FINRA Rule 1220, if a principal’s activities are limited to the functions of the General Securities Sales Supervisor, he is required to register as Registered Options Principal. On the other hand, if his activities are limited only to the functions of Supervisory Analyst, he is required to register as Research Principal.
Incorrect
Under FINRA Rule 1220, if a principal’s activities are limited to the functions of the General Securities Sales Supervisor, he is required to register as Registered Options Principal. On the other hand, if his activities are limited only to the functions of Supervisory Analyst, he is required to register as Research Principal.
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Question 5 of 10
5. Question
Under the FINRA Rule 3220, which of the following must be applied in influencing or rewarding employees of others?
I. No member shall directly receive gratuities in excess of $100 per year.
II. No member shall indirectly receive gratuities in excess of $100 per year.
III. All gratuities received must be recorded separately by the member for a specific period.
IV. A gift, other than in cash, may be given to a member directly even if its value is greater than $100.Correct
Any kind of gift is a gratuity, therefore, a member may not receive gratuities, in cash or in any kind, if the amount exceeds $100 per year. For gratuities received, it must be separately recorded and retained in a specific period provided by SEA Rule 17a-4.
Incorrect
Any kind of gift is a gratuity, therefore, a member may not receive gratuities, in cash or in any kind, if the amount exceeds $100 per year. For gratuities received, it must be separately recorded and retained in a specific period provided by SEA Rule 17a-4.
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Question 6 of 10
6. Question
Which of the following written policies, procedures, or systems must be maintained and preserved by the associated persons of brokers and dealers in relation to SEA Rule 17h-1T?
I. Methods on monitoring and controlling financial risks in business activities
II. Procedures on dealing with environmental risks
III. Methods on monitoring and controlling operational risks in business activities.
IV. Records with regards to reporting responsibilities for trading activitiesCorrect
In recordkeeping of requirements for risk assessment of brokers or dealers, a written policies which contain the methods on monitoring financial and operational risks, trading positions and risks, and financial and capital adequacy must be maintained and preserved. Trading positions and risks include the records for trading activities, its restrictions and limitations, and its financial instruments.
Incorrect
In recordkeeping of requirements for risk assessment of brokers or dealers, a written policies which contain the methods on monitoring financial and operational risks, trading positions and risks, and financial and capital adequacy must be maintained and preserved. Trading positions and risks include the records for trading activities, its restrictions and limitations, and its financial instruments.
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Question 7 of 10
7. Question
In maintaining and preserving information, if a broker-dealer is on-public companies or have non-public Material Associated Persons, what must be done by the firm to comply with the requirements and rules by the Commission?
Correct
In presenting financial information in risk assessment rules, non-public companies or non-public Material Associated Persons of a broker-dealers are required to develop new accounting and legal infrastructures to comply with the risk assessment rules by the Commission. Its purpose is to not impose any unnecessary burdens between the entities.
Incorrect
In presenting financial information in risk assessment rules, non-public companies or non-public Material Associated Persons of a broker-dealers are required to develop new accounting and legal infrastructures to comply with the risk assessment rules by the Commission. Its purpose is to not impose any unnecessary burdens between the entities.
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Question 8 of 10
8. Question
Which of the following information is not a supplement to filing FOCUS reports under FINRA Rule 4524?
Correct
As a supplement FOCUS information, the financial or operational schedules or reports must be designated in protecting the public interest. These schedules or reports must contain its format, timing, and its frequency as compliance with FINRA Rule 4524?
Incorrect
As a supplement FOCUS information, the financial or operational schedules or reports must be designated in protecting the public interest. These schedules or reports must contain its format, timing, and its frequency as compliance with FINRA Rule 4524?
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Question 9 of 10
9. Question
What is the role of a supervisor in assignment of responsibility for general ledger accounts and identification of suspense accounts?
Correct
The role of a supervisor in the assignment of responsibilities for general ledger accounts is to monthly review each account to determine if it is current and accurate. A supervisor must always assure that no uncertainties have been or would be identified in a general ledger account.
Incorrect
The role of a supervisor in the assignment of responsibilities for general ledger accounts is to monthly review each account to determine if it is current and accurate. A supervisor must always assure that no uncertainties have been or would be identified in a general ledger account.
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Question 10 of 10
10. Question
Which of the following statements are correct in relation to updating contact information by the member?
I. An update of contact information must be done not later than 30 days following any change in such information.
II. An update of contact information must be done not earlier than 30 days following any change in such information.
III. Any FINRA request for the required contact information must have complied not later than 15 days following the request.
IV. Contact information may be updated at any means stated in FINRA Rule 4517 and may have an extension of the request as agreed by the FINRA staff.Correct
Under FINRA Rule 4517, contact information must be updated by a member not later than 30 days following any change in such information. If a request by FINRA has been made regarding the updates, the request must be done not later than 15 days. All information must be updated via the Firm Gateway or any other means specified by FINRA.
Incorrect
Under FINRA Rule 4517, contact information must be updated by a member not later than 30 days following any change in such information. If a request by FINRA has been made regarding the updates, the request must be done not later than 15 days. All information must be updated via the Firm Gateway or any other means specified by FINRA.