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Question 1 of 10
1. Question
A member’s registration as an ADF Market Participant shall not become effective until:
I. The member has received a notice of approval from FINRA in the designated security types specified in the member’s application pursuant to specifies whether the member is seeking registration in Nasdaq and/or CQS securities
II. The member has executed the Certification Record pursuant to execute the Certification Record, as defined in Rule 6220
III. FINRA and the member have executed execute a Participant Agreement with FINRA at least six months (or such other shorter time period as may be designated by FINRA) prior to quoting or reporting trades on the ADF
IV. Certifies the member’s good standing with FINRACorrect
FINRA Alternative Display Facility (ADF) Rule 6200 Series
6271. Registration as an ADF Market Maker or ADF ECN
(b) A member’s registration as an ADF Market Participant shall not become effective until:
(1) the member has received a notice of approval from FINRA in the designated security types specified in the member’s application pursuant to paragraph (a)(1)(A);
(2) the member has executed the Certification Record pursuant to paragraph (a)(2); and
(3) FINRA and the member have executed:
(A) the application pursuant to paragraph (a)(1); and
(B) the Participant Agreement pursuant to paragraph (a)(3).Incorrect
FINRA Alternative Display Facility (ADF) Rule 6200 Series
6271. Registration as an ADF Market Maker or ADF ECN
(b) A member’s registration as an ADF Market Participant shall not become effective until:
(1) the member has received a notice of approval from FINRA in the designated security types specified in the member’s application pursuant to paragraph (a)(1)(A);
(2) the member has executed the Certification Record pursuant to paragraph (a)(2); and
(3) FINRA and the member have executed:
(A) the application pursuant to paragraph (a)(1); and
(B) the Participant Agreement pursuant to paragraph (a)(3). -
Question 2 of 10
2. Question
Indirect Beneficial Owners. For the purposes of Rule 5131(b), a member may rely upon a written representation obtained within the prior 12 months from a person authorized to represent an account that does not look through to the beneficial owners of any unaffiliated private fund invested in the account, except for beneficial owners that are control persons of the investment adviser to such private fund, that such unaffiliated private fund:
I. is managed by an investment adviser
II. has assets greater than $50 million
III. owns less than 25% of the account and is not a fund in which a single investor has a beneficial interest of 25% or more
IV. was not formed for the specific purpose of investing in the accountCorrect
FINRA Rule 5131 — New Issue Allocations and Distributions
5131. New Issue Allocations and Distributions
Indirect Beneficial Owners. For the purposes of Rule 5131(b), a member may rely upon a written representation obtained within the prior 12 months from a person authorized to represent an account that does not look through to the beneficial owners of any unaffiliated private fund invested in the account, except for beneficial owners that are control persons of the investment adviser to such private fund, that such unaffiliated private fund:
(1) is managed by an investment adviser;
(2) has assets greater than $50 million;
(3) owns less than 25% of the account and is not a fund in which a single investor has a beneficial interest of 25% or more; and
(4) was not formed for the specific purpose of investing in the account.Incorrect
FINRA Rule 5131 — New Issue Allocations and Distributions
5131. New Issue Allocations and Distributions
Indirect Beneficial Owners. For the purposes of Rule 5131(b), a member may rely upon a written representation obtained within the prior 12 months from a person authorized to represent an account that does not look through to the beneficial owners of any unaffiliated private fund invested in the account, except for beneficial owners that are control persons of the investment adviser to such private fund, that such unaffiliated private fund:
(1) is managed by an investment adviser;
(2) has assets greater than $50 million;
(3) owns less than 25% of the account and is not a fund in which a single investor has a beneficial interest of 25% or more; and
(4) was not formed for the specific purpose of investing in the account. -
Question 3 of 10
3. 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 Alternative Display Facility (ADF) Rule 6200 Series
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 terminIncorrect
FINRA Alternative Display Facility (ADF) Rule 6200 Series
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 termin -
Question 4 of 10
4. Question
What should be done when a member is seeking registration as an ADF Market Participant?
I. Execute the Certification Record, as defined in Rule 6220
II. Execute a Participant Agreement with FINRA at least nine months (or such other shorter time period as may be designated by FINRA) prior to quoting or reporting trades on the ADF
III. File an application with FINRA in which the member specifies whether the member is seeking registration in Nasdaq and/or CQS securities
IV. Certifies the member’s good standing with FINRACorrect
FINRA Rule 6271. Registration as an ADF Market Maker or ADF ECN
A member is seeking registration as an ADF Market Participant shall:
I. Execute the Certification Record, as defined in Rule 6220
II. Execute a Participant Agreement with FINRA at least six months (or such other shorter time period as may be designated by FINRA) prior to quoting or reporting trades on the ADF
III. File an application with FINRA in which the member specifies whether the member is seeking registration in Nasdaq and/or CQS securities
IV. Certifies the member’s good standing with FINRAIncorrect
FINRA Rule 6271. Registration as an ADF Market Maker or ADF ECN
A member is seeking registration as an ADF Market Participant shall:
I. Execute the Certification Record, as defined in Rule 6220
II. Execute a Participant Agreement with FINRA at least six months (or such other shorter time period as may be designated by FINRA) prior to quoting or reporting trades on the ADF
III. File an application with FINRA in which the member specifies whether the member is seeking registration in Nasdaq and/or CQS securities
IV. Certifies the member’s good standing with FINRA -
Question 5 of 10
5. 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 periodCorrect
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 6 of 10
6. Question
Which of the following refers to a quotation consisting of a bid, offer, or both at a specified price?
Correct
FINRA Rule 6420
“Priced entry” shall mean a quotation consisting of a bid, offer, or both at a specified price.Incorrect
FINRA Rule 6420
“Priced entry” shall mean a quotation consisting of a bid, offer, or both at a specified price. -
Question 7 of 10
7. Question
Members shall append the applicable trade report modifiers as specified by FINRA to all last sale reports, including reports of “as/of” trades:
I. If the trade is executed during normal market hours and it is reported later than 10 seconds after execution
II. If the trade is a Seller’s Option Trade, denoting the number of days for delivery
III. If the trade is a Cash Trade
IV. If the trade is a Next Day TradeCorrect
FINRA Rule 6622. Transaction Reporting
Members also shall append the applicable trade report modifiers as specified by FINRA to all last sale reports, including reports of “as/of” trades:
(A) if the trade is executed during normal market hours and it is reported later than 10 seconds after execution;
(B) if the trade is a Seller’s Option Trade, denoting the number of days for delivery;
(C) if the trade is a Cash Trade;
(D) if the trade is a Next Day Trade;
(E) if the trade occurs at a price based on an average weighting or another special pricing formula;Incorrect
FINRA Rule 6622. Transaction Reporting
Members also shall append the applicable trade report modifiers as specified by FINRA to all last sale reports, including reports of “as/of” trades:
(A) if the trade is executed during normal market hours and it is reported later than 10 seconds after execution;
(B) if the trade is a Seller’s Option Trade, denoting the number of days for delivery;
(C) if the trade is a Cash Trade;
(D) if the trade is a Next Day Trade;
(E) if the trade occurs at a price based on an average weighting or another special pricing formula; -
Question 8 of 10
8. Question
Which of the following information should be contained in each last sale report?
I. A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short
II. The time of execution expressed in hours, minutes, and seconds based on Eastern Time, unless another provision of FINRA rules requires that a different time must be included on the report
III. Number of shares
IV. Materiality matrixCorrect
FINRA Rule 6622
(c) Information To Be Reported
Each last sale report shall contain the following information:
I. A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short
II. The time of execution expressed in hours, minutes, and seconds based on Eastern Time, unless another provision of FINRA rules requires that a different time must be included on the report
III. Number of sharesIncorrect
FINRA Rule 6622
(c) Information To Be Reported
Each last sale report shall contain the following information:
I. A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short
II. The time of execution expressed in hours, minutes, and seconds based on Eastern Time, unless another provision of FINRA rules requires that a different time must be included on the report
III. Number of shares -
Question 9 of 10
9. Question
Which of the following is correct?
I. Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules
II. Any grievance by a customer or any person authorized to act on behalf of the customer involving the activities of the member or a person associated with the member in connection with the solicitation or execution of any transaction or the disposition of securities or funds of that customer
III. Members shall preserve for a period of at least six years those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules
IV. All books and records required to be made pursuant to the FINRA rules shall be preserved in a format and media that complies with SEA Rule 17a-4Correct
FINRA Rule 4511. General Requirements
(a) Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules.
(b) Members shall preserve for a period of at least six years those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules.
(c) All books and records required to be made pursuant to the FINRA rules shall be preserved in a format and media that complies with SEA Rule 17a-4.Incorrect
FINRA Rule 4511. General Requirements
(a) Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules.
(b) Members shall preserve for a period of at least six years those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules.
(c) All books and records required to be made pursuant to the FINRA rules shall be preserved in a format and media that complies with SEA Rule 17a-4. -
Question 10 of 10
10. Question
A member shall not be considered a Reporting Member in connection with an order, if which of the following conditions are met?
I. The member engages in a non-discretionary order routing process, pursuant to which it immediately routes, by electronic or other means, all of its orders to a single receiving Reporting Member
II. he member does not direct and does not maintain control over subsequent routing or execution by the receiving Reporting Member(s)
III. The receiving Reporting Member(s) record(s) and report(s) all information required under Rules 7440 and 7450 with respect to the order
IV. The member has a written agreement with the receiving Reporting Member(s) specifying the respective functions and responsibilities of each party to effect full compliance with the requirements of Rules 7440 and 7450Correct
FINRA Rule 7410. Definitions
(A) the member engages in a non-discretionary order routing process, pursuant to which it immediately routes, by electronic or other means, all of its orders to:
(i) a single receiving Reporting Member; or
(ii) two receiving Reporting Members, provided:
a. orders are routed by the member to each receiving Reporting Member on a pre-determined schedule approved by FINRA; and
b. orders are routed to two receiving Reporting Members pursuant to the schedule for a time period not to exceed one year; and
(B) the member does not direct and does not maintain control over subsequent routing or execution by the receiving Reporting Member(s);
(C) the receiving Reporting Member(s) record(s) and report(s) all information required under Rules 7440 and 7450 with respect to the order; and
(D) the member has a written agreement with the receiving Reporting Member(s) specifying the respective functions and responsibilities of each party to effect full compliance with the requirements of Rules 7440 and 7450.Incorrect
FINRA Rule 7410. Definitions
(A) the member engages in a non-discretionary order routing process, pursuant to which it immediately routes, by electronic or other means, all of its orders to:
(i) a single receiving Reporting Member; or
(ii) two receiving Reporting Members, provided:
a. orders are routed by the member to each receiving Reporting Member on a pre-determined schedule approved by FINRA; and
b. orders are routed to two receiving Reporting Members pursuant to the schedule for a time period not to exceed one year; and
(B) the member does not direct and does not maintain control over subsequent routing or execution by the receiving Reporting Member(s);
(C) the receiving Reporting Member(s) record(s) and report(s) all information required under Rules 7440 and 7450 with respect to the order; and
(D) the member has a written agreement with the receiving Reporting Member(s) specifying the respective functions and responsibilities of each party to effect full compliance with the requirements of Rules 7440 and 7450.