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Question 1 of 10
1. Question
Which of the following information must be provided for each transaction that is reported to the System. Unless the contra side will have an opportunity to provide its own trade information, the Reporting Member is responsible for the complete and accurate submission of information for both sides of the trade?
I. Demographic information of the Board
II. Security identification symbol of the eligible security (SECID)
III. Number of shares
IV. Unit price, excluding commissions, mark-ups or mark-downs
Correct
FINRA Rule 7300 — OTC Reporting Facility
7330. Trade Report Input
(d) Trade Information To Be Input
The information listed below must be provided for each transaction that is reported to the System. Unless the contra side will have an opportunity to provide its own trade information, the Reporting Member is responsible for the complete and accurate submission of information for both sides of the trade.
(1) Security identification symbol of the eligible security (SECID);
(2) Number of shares;
(3) Unit price, excluding commissions, mark-ups or mark-downs
Incorrect
FINRA Rule 7300 — OTC Reporting Facility
7330. Trade Report Input
(d) Trade Information To Be Input
The information listed below must be provided for each transaction that is reported to the System. Unless the contra side will have an opportunity to provide its own trade information, the Reporting Member is responsible for the complete and accurate submission of information for both sides of the trade.
(1) Security identification symbol of the eligible security (SECID);
(2) Number of shares;
(3) Unit price, excluding commissions, mark-ups or mark-downs
Question 2 of 10
2. Question
What is the information should be included in each last sale report?
I. Stock symbol of the designated security
II. Number of shares or bonds
III. A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short or sell short exempt
IV. Number of employees
Correct
FINRA Rule 6280
6282. Transactions Reported by Members to the ADF
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1) Stock symbol of the designated security;
(2) Number of shares or bonds;
(3) Price of the transaction as required by paragraph (d) below;
(4) A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short or sell short exempt;
Incorrect
FINRA Rule 6280
6282. Transactions Reported by Members to the ADF
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1) Stock symbol of the designated security;
(2) Number of shares or bonds;
(3) Price of the transaction as required by paragraph (d) below;
(4) A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short or sell short exempt;
Question 3 of 10
3. Question
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent:
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
IV. The transaction in NextShares for submission by the FINRA/Nasdaq Trade Reporting Facility to NSCC
Correct
FINRA Rule 6190. Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent:
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
Incorrect
FINRA Rule 6190. Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent:
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
Question 4 of 10
4. Question
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent which of the following?
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
IV. The trading may occur at the midpoint between the NBBO or PBBO
Correct
FINRA Rule 6190
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent which of the following?
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
Incorrect
FINRA Rule 6190
A member that is a trading center in an NMS Stock shall establish, maintain and enforce written policies and procedures that are reasonably designed to comply with the requirements of the Regulation NMS Plan to Address Extraordinary Market Volatility (Plan) and specifically to prevent which of the following?
I. The execution of trades at prices that are below the Lower Price Band or above the Upper Price Band for an NMS Stock, except as permitted under the Plan
II. The display of offers below the Lower Price Band and bids above the Upper Price Band for an NMS Stock
III. The execution of trades in an NMS Stock during a Trading Pause; however, bids and offers may be displayed during a Trading Pause, as permitted under the Plan
Question 5 of 10
5. Question
Which of the following refer to open order prices shall be determined by first rounding up the dollar value of the stock dividend or split to the next higher minimum quotation variation?
Correct
FINRA Rule 5330. Adjustment of Orders
Stock Dividends and Stock Splits: Open order prices shall be determined by first rounding up the dollar value of the stock dividend or split to the next higher minimum quotation variation. The resulting amount shall then be subtracted from the price of the order. Unless marked “Do Not Increase,” the size of the order shall be increased by first (A) multiplying the size of the original order by the numerator of the ratio of the dividend or split, then (B) dividing the result by the denominator of the ratio of the dividend or split, then (C) rounding the result to the next lowest share.
Incorrect
FINRA Rule 5330. Adjustment of Orders
Stock Dividends and Stock Splits: Open order prices shall be determined by first rounding up the dollar value of the stock dividend or split to the next higher minimum quotation variation. The resulting amount shall then be subtracted from the price of the order. Unless marked “Do Not Increase,” the size of the order shall be increased by first (A) multiplying the size of the original order by the numerator of the ratio of the dividend or split, then (B) dividing the result by the denominator of the ratio of the dividend or split, then (C) rounding the result to the next lowest share.
Question 6 of 10
6. Question
Which of the following correctly refer to Procedure for Initiating a Trading and Quotation Halt?
I. To effect, directly or indirectly, a trade in such security
II. After FINRA initiates a halt in an OTC Equity Security as a result of a Foreign Regulatory Halt or a Derivative Halt, FINRA may continue the halt in trading and quoting in the OTC market for the OTC Equity Security until such time as FINRA receives notice that the applicable regulatory authority has or intends to resume trading in the security
III. After FINRA initiates a halt in an OTC Equity Security as a result of an Extraordinary Event Halt, trading and quotations in the OTC market for the OTC Equity Security may resume when FINRA determines that the basis for the halt no longer exists, or when ten business days have elapsed from the date FINRA initiated the trading and quotation halt in the security, whichever occurs first
IV. FINRA shall disseminate appropriate public notice that a trading and quotation halt initiated under this Rule is no longer in effect
Correct
FINRA Rule 6440. Trading and Quotation Halt in OTC Equity Securities
(b) Procedure for Initiating a Trading and Quotation Halt
(1) Upon notice of a Foreign Regulatory Halt or Derivative Halt from: (A) the national or foreign securities exchange or market on which the OTC Equity Security or the security underlying the OTC ADR is listed or registered, (B) a regulatory authority overseeing such issuer, exchange, or market, or (C) another reliable third-party source where FINRA can validate the information provided, FINRA will promptly initiate a trading and quotation halt in the OTC Equity Security. The commencement of the trading and quotation halt for the OTC Equity Security will be effective simultaneous with the issuance of appropriate public notice by FINRA.
(2) After FINRA initiates a halt in an OTC Equity Security as a result of a Foreign Regulatory Halt or a Derivative Halt, FINRA may continue the halt in trading and quoting in the OTC market for the OTC Equity Security until such time as FINRA receives notice that the applicable regulatory authority has or intends to resume trading in the security.
(3) After FINRA initiates a halt in an OTC Equity Security as a result of an Extraordinary Event Halt, trading and quotations in the OTC market for the OTC Equity Security may resume when FINRA determines that the basis for the halt no longer exists, or when ten business days have elapsed from the date FINRA initiated the trading and quotation halt in the security, whichever occurs first.
(4) FINRA shall disseminate appropriate public notice that a trading and quotation halt initiated under this Rule is no longer in effect.
Incorrect
FINRA Rule 6440. Trading and Quotation Halt in OTC Equity Securities
(b) Procedure for Initiating a Trading and Quotation Halt
(1) Upon notice of a Foreign Regulatory Halt or Derivative Halt from: (A) the national or foreign securities exchange or market on which the OTC Equity Security or the security underlying the OTC ADR is listed or registered, (B) a regulatory authority overseeing such issuer, exchange, or market, or (C) another reliable third-party source where FINRA can validate the information provided, FINRA will promptly initiate a trading and quotation halt in the OTC Equity Security. The commencement of the trading and quotation halt for the OTC Equity Security will be effective simultaneous with the issuance of appropriate public notice by FINRA.
(2) After FINRA initiates a halt in an OTC Equity Security as a result of a Foreign Regulatory Halt or a Derivative Halt, FINRA may continue the halt in trading and quoting in the OTC market for the OTC Equity Security until such time as FINRA receives notice that the applicable regulatory authority has or intends to resume trading in the security.
(3) After FINRA initiates a halt in an OTC Equity Security as a result of an Extraordinary Event Halt, trading and quotations in the OTC market for the OTC Equity Security may resume when FINRA determines that the basis for the halt no longer exists, or when ten business days have elapsed from the date FINRA initiated the trading and quotation halt in the security, whichever occurs first.
(4) FINRA shall disseminate appropriate public notice that a trading and quotation halt initiated under this Rule is no longer in effect.
Question 7 of 10
7. Question
The ATS demonstrates that:
I. The member subscribers are fully disclosed to one another at all times on the ATS
II. The system does not permit automatic execution, and a member subscriber must take affirmative steps beyond the submission of an order to agree to a trade with another member subscriber
III. The trade does not pass through any ATS account, and the ATS does not in any way hold itself out to be a party to the trade
IV. The ATS does not exchange shares or funds on behalf of the member subscribers, take either side of the trade for clearing or settlement purposes, including, but not limited to, at DTC or otherwise, or in any other way insert itself into the trade.
Correct
FINRA Rule 6625. Exemption from Trade Reporting Obligation for Certain Alternative Trading Systems
The ATS demonstrates that:
(A) The member subscribers are fully disclosed to one another at all times on the ATS;
(B) The system does not permit automatic execution, and a member subscriber must take affirmative steps beyond the submission of an order to agree to a trade with another member subscriber;
(C) The trade does not pass through any ATS account, and the ATS does not in any way hold itself out to be a party to the trade; and
(D) The ATS does not exchange shares or funds on behalf of the member subscribers, take either side of the trade for clearing or settlement purposes, including, but not limited to, at DTC or otherwise, or in any other way insert itself into the trade.
Incorrect
FINRA Rule 6625. Exemption from Trade Reporting Obligation for Certain Alternative Trading Systems
The ATS demonstrates that:
(A) The member subscribers are fully disclosed to one another at all times on the ATS;
(B) The system does not permit automatic execution, and a member subscriber must take affirmative steps beyond the submission of an order to agree to a trade with another member subscriber;
(C) The trade does not pass through any ATS account, and the ATS does not in any way hold itself out to be a party to the trade; and
(D) The ATS does not exchange shares or funds on behalf of the member subscribers, take either side of the trade for clearing or settlement purposes, including, but not limited to, at DTC or otherwise, or in any other way insert itself into the trade.
Question 8 of 10
8. Question
Which of the following refer to a member of FINRA that is registered as a FINRA market maker in a particular designated security and, with respect to that security, holds itself out (by entering quotations in the Alternative Display Facility) as being willing to buy and sell such security for its own account on a regular and continuous basis?
Correct
FINRA Rule 6220. Definitions
“Registered Reporting ADF Market Maker” means a member of FINRA that is registered as a FINRA market maker in a particular designated security and, with respect to that security, holds itself out (by entering quotations in the Alternative Display Facility) as being willing to buy and sell such security for its own account on a regular and continuous basis. A member is a Registered Reporting ADF Market Maker in only those designated securities for which it is registered as an ADF market maker. A member shall cease being a Registered Reporting ADF Market Maker in a designated security when it has withdrawn or voluntarily terminated its quotations in that security on the ADF or when its quotations have been suspended or terminated by action of FINRA.
Incorrect
FINRA Rule 6220. Definitions
“Registered Reporting ADF Market Maker” means a member of FINRA that is registered as a FINRA market maker in a particular designated security and, with respect to that security, holds itself out (by entering quotations in the Alternative Display Facility) as being willing to buy and sell such security for its own account on a regular and continuous basis. A member is a Registered Reporting ADF Market Maker in only those designated securities for which it is registered as an ADF market maker. A member shall cease being a Registered Reporting ADF Market Maker in a designated security when it has withdrawn or voluntarily terminated its quotations in that security on the ADF or when its quotations have been suspended or terminated by action of FINRA.
Question 9 of 10
9. Question
Which of the following refer to the amount, expressed as a percentage of the warrant’s exercise value, by which the sum of the price at issuance and the exercise price of a warrant exceeds its exercise value?
Correct
Securities Act Rule 144A — Private Resales of Securities to Institutions:
(7) For purposes of this section, effective exercise premium means the amount, expressed as a percentage of the warrant’s exercise value, by which the sum of the price at issuance and the exercise price of a warrant exceeds its exercise value.
Incorrect
Securities Act Rule 144A — Private Resales of Securities to Institutions:
(7) For purposes of this section, effective exercise premium means the amount, expressed as a percentage of the warrant’s exercise value, by which the sum of the price at issuance and the exercise price of a warrant exceeds its exercise value.
Question 10 of 10
10. Question
Non-Member Clearing Organization access to and participation in the System shall be conditioned upon the Organization’s initial and continuing compliance with which of the following requirements?
I. Execution of and continuing compliance with a Non-Member Clearing Organization Participation Application Agreement
II. Non-Member Clearing Organization shall only have access to the System to operate as a service bureau for its members functioning as Reporting Order Entry Firms, Correspondent Executing Broker-Dealers, Correspondent Executing Brokers, Clearing Broker-Dealers, or Clearing Brokers, as those terms are defined in Rule 7210A
III. Participants shall commence participation in the System by initially contacting the System Operation Center to verify authorization for submitting trade data to the System for Reportable Securities
IV. Compliance with all applicable rules and operating procedures of FINRA and the SEC
Correct
FINRA Rule 7220A. Trade Reporting Participation Requirements
(a) Mandatory Participation for Clearing Agency Members
Non-Member Clearing Organization access to and participation in the System shall be conditioned upon the Organization’s initial and continuing compliance with the following requirements:
(i) execution of and continuing compliance with a Non-Member Clearing Organization Participation Application Agreement;
(ii) a Non-Member Clearing Organization shall only have access to the System to operate as a service bureau for its members functioning as Reporting Order Entry Firms, Correspondent Executing Broker-Dealers, Correspondent Executing Brokers, Clearing Broker-Dealers, or Clearing Brokers, as those terms are defined in Rule 7210A;
(iii) registration as a clearing agency pursuant to the Exchange Act, membership in a clearing agency registered pursuant to the Exchange Act, or maintenance of an effective clearing arrangement with a registered clearing agency;
(iv) compliance with all applicable rules and operating procedures of FINRA and the SEC;
Incorrect
FINRA Rule 7220A. Trade Reporting Participation Requirements
(a) Mandatory Participation for Clearing Agency Members
Non-Member Clearing Organization access to and participation in the System shall be conditioned upon the Organization’s initial and continuing compliance with the following requirements:
(i) execution of and continuing compliance with a Non-Member Clearing Organization Participation Application Agreement;
(ii) a Non-Member Clearing Organization shall only have access to the System to operate as a service bureau for its members functioning as Reporting Order Entry Firms, Correspondent Executing Broker-Dealers, Correspondent Executing Brokers, Clearing Broker-Dealers, or Clearing Brokers, as those terms are defined in Rule 7210A;
(iii) registration as a clearing agency pursuant to the Exchange Act, membership in a clearing agency registered pursuant to the Exchange Act, or maintenance of an effective clearing arrangement with a registered clearing agency;
(iv) compliance with all applicable rules and operating procedures of FINRA and the SEC;
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