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Question 1 of 10
1. Question
Which of the following refers to FINRA prohibits the display of manual quotations in the Alternative Display Facility, as specified in Rule 6250. However, if a member displays a manual quotation in another FINRA facility that locks or crosses a quotation previously disseminated pursuant to an effective NMS Plan, such member shall promptly either withdraw the manual quotation or route an intermarket sweep order to execute against the full displayed size of the locked or crossed quotation?
Correct
FINRA Rule 6240. Prohibition from Locking or Crossing Quotations in NMS Stocks
Manual quotations. FINRA prohibits the display of manual quotations in the Alternative Display Facility, as specified in Rule 6250. However, if a member displays a manual quotation in another FINRA facility that locks or crosses a quotation previously disseminated pursuant to an effective NMS Plan, such member shall promptly either withdraw the manual quotation or route an intermarket sweep order to execute against the full displayed size of the locked or crossed quotation.
Incorrect
FINRA Rule 6240. Prohibition from Locking or Crossing Quotations in NMS Stocks
Manual quotations. FINRA prohibits the display of manual quotations in the Alternative Display Facility, as specified in Rule 6250. However, if a member displays a manual quotation in another FINRA facility that locks or crosses a quotation previously disseminated pursuant to an effective NMS Plan, such member shall promptly either withdraw the manual quotation or route an intermarket sweep order to execute against the full displayed size of the locked or crossed quotation.
Question 2 of 10
2. Question
Published Trading Information will be presented on FINRA’s web site as which of the following?
I. Trading Information will be published no earlier than two month following the end of the Trading Information month, aggregate volume totals across all OTC Equity Securities
II. Trading Information will be aggregated for all Market Participant Identifiers (MPIDs) used by a single member (excluding, if applicable, any MPIDs used by the member for reporting trades executed in its alternative trading system)
III. Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day across all OTC Equity Securities during the applicable Trading Information period
IV. Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day in an OTC Equity Security during the applicable Trading Information period
Correct
FINRA Rule 6610. General
Published Trading Information will be presented on FINRA’s web site as follows:
(A) Trading Information will be aggregated for all Market Participant Identifiers (MPIDs) used by a single member (excluding, if applicable, any MPIDs used by the member for reporting trades executed in its alternative trading system).
(B) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day across all OTC Equity Securities during the applicable Trading Information period.
(C) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day in an OTC Equity Security during the applicable Trading Information period.
Incorrect
FINRA Rule 6610. General
Published Trading Information will be presented on FINRA’s web site as follows:
(A) Trading Information will be aggregated for all Market Participant Identifiers (MPIDs) used by a single member (excluding, if applicable, any MPIDs used by the member for reporting trades executed in its alternative trading system).
(B) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day across all OTC Equity Securities during the applicable Trading Information period.
(C) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day in an OTC Equity Security during the applicable Trading Information period.
Question 3 of 10
3. Question
For issuers that are not foreign private issuers, the term “current financial statements” shall include which of the following?
I. A balance sheet as of a date less than 15 months before the date of the recommendation
II. A statement of profit and loss for the 12 months preceding the date of the balance sheet
III. All publicly available financial information filed with the SEC during the 12 months preceding the date of the recommendation contained in registration statements or SEC Regulation A filings
IV. Publicly available financial statements and other financial reports filed during the 12 months preceding the date of the recommendation and up to the date of the recommendation with the issuer’s principal financial or securities regulatory authority in its home jurisdiction, including the SEC, foreign regulatory authorities, and bank and insurance regulators
Correct
FINRA Rule 2110. Recommendations
2111. Suitability
For issuers that are not foreign private issuers, the term “current financial statements” shall include which of the following?
I. A balance sheet as of a date less than 15 months before the date of the recommendation
II. A statement of profit and loss for the 12 months preceding the date of the balance sheet
III. All publicly available financial information filed with the SEC during the 12 months preceding the date of the recommendation contained in registration statements or SEC Regulation A filings
Incorrect
FINRA Rule 2110. Recommendations
2111. Suitability
For issuers that are not foreign private issuers, the term “current financial statements” shall include which of the following?
I. A balance sheet as of a date less than 15 months before the date of the recommendation
II. A statement of profit and loss for the 12 months preceding the date of the balance sheet
III. All publicly available financial information filed with the SEC during the 12 months preceding the date of the recommendation contained in registration statements or SEC Regulation A filings
Question 4 of 10
4. Question
In reviewing and comparing the execution quality of its current order routing and execution arrangements to the execution quality of other markets, which of the following factors should a member should consider?
I. The size of execution
II. Transaction costs
III. Customer needs and expectations
IV. he existence of internalization or payment for order flow arrangements
Correct
FINRA Rule 5310. Best Execution and Interpositioning
In reviewing and comparing the execution quality of its current order routing and execution arrangements to the execution quality of other markets, a member should consider the following factors:
(1) price improvement opportunities (i.e., the difference between the execution price and the best quotes prevailing at the time the order is received by the market);
(2) differences in price disimprovement (i.e., situations in which a customer receives a worse price at execution than the best quotes prevailing at the time the order is received by the market);
(3) the likelihood of execution of limit orders;
(4) the speed of execution;
(5) the size of execution;
(6) transaction costs;
(7) customer needs and expectations; and
(8) the existence of internalization or payment for order flow arrangements.
Incorrect
FINRA Rule 5310. Best Execution and Interpositioning
In reviewing and comparing the execution quality of its current order routing and execution arrangements to the execution quality of other markets, a member should consider the following factors:
(1) price improvement opportunities (i.e., the difference between the execution price and the best quotes prevailing at the time the order is received by the market);
(2) differences in price disimprovement (i.e., situations in which a customer receives a worse price at execution than the best quotes prevailing at the time the order is received by the market);
(3) the likelihood of execution of limit orders;
(4) the speed of execution;
(5) the size of execution;
(6) transaction costs;
(7) customer needs and expectations; and
(8) the existence of internalization or payment for order flow arrangements.
Question 5 of 10
5. Question
Which of the following refer to if the value of the distribution cannot be determined, the member shall not adjust, execute, or permit an open order to be executed without reconfirming the order with the customer?
Correct
FINRA Rule 5330. Adjustment of Orders
Indeterminate Value: If the value of the distribution cannot be determined, the member shall not adjust, execute, or permit an open order to be executed without reconfirming the order with the customer.
Incorrect
FINRA Rule 5330. Adjustment of Orders
Indeterminate Value: If the value of the distribution cannot be determined, the member shall not adjust, execute, or permit an open order to be executed without reconfirming the order with the customer.
Question 6 of 10
6. Question
Which of the following will influenced the price of a warrant?
I. Dividends
II. Interest rates
III. Time to expiry
IV. The size of the company
Correct
The price of a warrant can be influenced by:
I. Dividends
II. Interest rates
III. Time to expiry
Incorrect
The price of a warrant can be influenced by:
I. Dividends
II. Interest rates
III. Time to expiry
Question 7 of 10
7. Question
Which of the following referring to any member of FINRA in good standing that uses the System?
Correct
FINRA Rule 7310
The term “Trade Reporting Participant” or “Participant” shall mean any member of FINRA in good standing that uses the System.
Incorrect
FINRA Rule 7310
The term “Trade Reporting Participant” or “Participant” shall mean any member of FINRA in good standing that uses the System.
Question 8 of 10
8. Question
Participation in the System shall be conditioned upon the initial and continuing compliance with which the following requirements?
I. Execution of, and continuing compliance with, a Participant Application Agreement
II. Membership in, or maintenance of an effective clearing arrangement with a participant of, a clearing agency registered pursuant to the Exchange Act
III. Compliance with all applicable rules and operating procedures of FINRA and the SEC
IV. Maintenance of the physical security of the equipment located on the premises of the participant to prevent unauthorized entry of information into the System
Correct
FINRA Rule 7320. Trade Reporting Participation Requirements
Participation in the System shall be conditioned upon the initial and continuing compliance with the following requirements:
(A) execution of, and continuing compliance with, a Participant Application Agreement;
(B) membership in, or maintenance of an effective clearing arrangement with a participant of, a clearing agency registered pursuant to the Exchange Act;
(C) compliance with all applicable rules and operating procedures of FINRA and the SEC;
(D) maintenance of the physical security of the equipment located on the premises of the participant to prevent unauthorized entry of information into the System; and
Incorrect
FINRA Rule 7320. Trade Reporting Participation Requirements
Participation in the System shall be conditioned upon the initial and continuing compliance with the following requirements:
(A) execution of, and continuing compliance with, a Participant Application Agreement;
(B) membership in, or maintenance of an effective clearing arrangement with a participant of, a clearing agency registered pursuant to the Exchange Act;
(C) compliance with all applicable rules and operating procedures of FINRA and the SEC;
(D) maintenance of the physical security of the equipment located on the premises of the participant to prevent unauthorized entry of information into the System; and
Question 9 of 10
9. Question
Which of the following in regards to System Participant Obligations is correct?
I. 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
II. A Participant that is a self-clearing firm shall be obligated to accept and clear each trade that the System identifies as having been effected by that Participant
III. A Participant that is an Introducing Broker or a Correspondent Executing Broker shall identify its Clearing Broker when it becomes a Participant and notify the System Operation Center if its Clearing Broker is to be changed; this will necessitate execution of a revised Participant Application Agreement
IV. If at any time a Participant fails to maintain a clearing arrangement,, it shall be removed from the System until such time as a clearing arrangement is reestablished, and notice of such arrangement, with an amended Participant Application Agreement, is filed with FINRA
Correct
FINRA Rule 7320. Trade Reporting Participation Requirements
(2) System Participant Obligations
(A) 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.
(B) A Participant that is a self-clearing firm shall be obligated to accept and clear each trade that the System identifies as having been effected by that Participant.
(C) A Participant that is an Introducing Broker or a Correspondent Executing Broker shall identify its Clearing Broker when it becomes a Participant and notify the System Operation Center if its Clearing Broker is to be changed; this will necessitate execution of a revised Participant Application Agreement.
(D) If at any time a Participant fails to maintain a clearing arrangement, it shall be removed from the System until such time as a clearing arrangement is reestablished and notice of such arrangement, with an amended Reporting Participant Application Agreement, is filed with FINRA.
Incorrect
FINRA Rule 7320. Trade Reporting Participation Requirements
(2) System Participant Obligations
(A) 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.
(B) A Participant that is a self-clearing firm shall be obligated to accept and clear each trade that the System identifies as having been effected by that Participant.
(C) A Participant that is an Introducing Broker or a Correspondent Executing Broker shall identify its Clearing Broker when it becomes a Participant and notify the System Operation Center if its Clearing Broker is to be changed; this will necessitate execution of a revised Participant Application Agreement.
(D) If at any time a Participant fails to maintain a clearing arrangement, it shall be removed from the System until such time as a clearing arrangement is reestablished and notice of such arrangement, with an amended Reporting Participant Application Agreement, is filed with FINRA.
Question 10 of 10
10. 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. A symbol indicating whether the trade is as principal, riskless principal, or agent
II. Reporting side Clearing Broker (if other than normal Clearing Broker)
III. Number of employees
IV. Contra side executing broker
Correct
FINRA Rule 7330. Trade Report 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.
I. A symbol indicating whether the trade is as principal, riskless principal, or agent
II. Reporting side Clearing Broker (if other than normal Clearing Broker)
III. Contra side executing broker
Incorrect
FINRA Rule 7330. Trade Report 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.
I. A symbol indicating whether the trade is as principal, riskless principal, or agent
II. Reporting side Clearing Broker (if other than normal Clearing Broker)
III. Contra side executing broker
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