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Question 1 of 10
1. Question
Which of the following statements is true regarding payment receiving, according to FINRA Rule 2320?
Correct
FINRA Rule 2320 deems that payment has been received at the time at which the purchase payment has been submitted and the insurance application has been submitted to and accepted by the insurance carrier. However, in certain instances the payment may be considered to have been received when the payment is actually made, if both parties agree to the timing as such. Finally, the payment is not considered to have been received until the application has also been submitted and accepted.
Incorrect
FINRA Rule 2320 deems that payment has been received at the time at which the purchase payment has been submitted and the insurance application has been submitted to and accepted by the insurance carrier. However, in certain instances the payment may be considered to have been received when the payment is actually made, if both parties agree to the timing as such. Finally, the payment is not considered to have been received until the application has also been submitted and accepted.
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Question 2 of 10
2. Question
Which of the following statements is true regarding FINRA Rule statements concerning variable contracts?
Correct
FINRA Rule 2320 states that no member who is a principal underwriter is permitted to sell variable contracts through a different broker dealer unless
the broker dealer through which the underwriter is selling is a member. FINRA Rule 2320 provides for certain restrictions and limitations on the circumstances and types of compensation that can be paid to members and associated persons for the sale of variable contracts, as follows:
1. No associated person of a member shall accept any compensation from anyone other than the member with which the person is associated.
2. No member or person associated with a member shall accept any compensation from an offeror in the form of securities.
3. Members are obligated to maintain records of all compensation received by the member or its associated persons and such records shall include the names of the offerors, names of the associated persons, and amounts of cash and non-cash compensation.Incorrect
FINRA Rule 2320 states that no member who is a principal underwriter is permitted to sell variable contracts through a different broker dealer unless
the broker dealer through which the underwriter is selling is a member. FINRA Rule 2320 provides for certain restrictions and limitations on the circumstances and types of compensation that can be paid to members and associated persons for the sale of variable contracts, as follows:
1. No associated person of a member shall accept any compensation from anyone other than the member with which the person is associated.
2. No member or person associated with a member shall accept any compensation from an offeror in the form of securities.
3. Members are obligated to maintain records of all compensation received by the member or its associated persons and such records shall include the names of the offerors, names of the associated persons, and amounts of cash and non-cash compensation. -
Question 3 of 10
3. Question
Which of the following statements it true regarding Training of members?
Correct
Training – a member must develop and document training policies or programs designed to ensure that associated persons who effect and registered persons who review transactions of deferred variable annuities are compliant.
Incorrect
Training – a member must develop and document training policies or programs designed to ensure that associated persons who effect and registered persons who review transactions of deferred variable annuities are compliant.
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Question 4 of 10
4. Question
Which of the following is one of the impacts of ERISA and Internal Revenue Code Section 409A?
Correct
In order to avoid having to comply with the eligibility requirements of ERISA, non- qualified deferred compensation plans must remain unfunded, so that in the event of the insolvency of the plan sponsor, the employee would be a general creditor. As a result, non-qualified deferred compensation plans are typically offered to only a select group of management and other highly compensated employees, typically representing 10% or less of the total workforce.
Incorrect
In order to avoid having to comply with the eligibility requirements of ERISA, non- qualified deferred compensation plans must remain unfunded, so that in the event of the insolvency of the plan sponsor, the employee would be a general creditor. As a result, non-qualified deferred compensation plans are typically offered to only a select group of management and other highly compensated employees, typically representing 10% or less of the total workforce.
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Question 5 of 10
5. Question
Which of the following is NOT one of distribution events under which a participant can receive payment, pursuant to Section 409A?
Correct
Section 409A specifies only a handful of distribution events under which a participant can receive payment, including separation from service, change in control, death, disability, and financial hardship.
Incorrect
Section 409A specifies only a handful of distribution events under which a participant can receive payment, including separation from service, change in control, death, disability, and financial hardship.
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Question 6 of 10
6. Question
Which of the following statements is true regarding FCIA taxes?
Correct
Within a non-qualified deferred compensation plan, an employee’s deferrals of compensation are not taxed as income. However, it is important to note that FICA taxes (social security and Medicare) are still taken from the employee’s pay at the time of deferral. The notional account into which the employee has deferred compensation grows tax-deferred until the time of distribution.
Incorrect
Within a non-qualified deferred compensation plan, an employee’s deferrals of compensation are not taxed as income. However, it is important to note that FICA taxes (social security and Medicare) are still taken from the employee’s pay at the time of deferral. The notional account into which the employee has deferred compensation grows tax-deferred until the time of distribution.
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Question 7 of 10
7. Question
Which of the following rules is concerned with “breakpoint sales”?
Correct
“Breakpoint” sales (FINRA Rule 2342) – a member is not to sell investment company shares at a price below the point that the sales charge is reduced on quantity transactions in order to gain the applicable higher sales charges.
Incorrect
“Breakpoint” sales (FINRA Rule 2342) – a member is not to sell investment company shares at a price below the point that the sales charge is reduced on quantity transactions in order to gain the applicable higher sales charges.
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Question 8 of 10
8. Question
What is the statement of FINRA Rule 3220?
Correct
Influencing or rewarding employees of others (FINRA Rule 3220) – a member is not to give anything of value in excess of $100 per individual per person per year in relation to the business of the employer.
Incorrect
Influencing or rewarding employees of others (FINRA Rule 3220) – a member is not to give anything of value in excess of $100 per individual per person per year in relation to the business of the employer.
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Question 9 of 10
9. Question
Which rule ensures the person understands predispute arbitration?
Correct
Arbitration disclosure to associated persons signing or acknowledging Form U4 (FINRA Rule 2263) – a member is to provide an associated person with a specific written statement at any time the person is asked to sign or initial a Form U4. This statement ensures the person understands predispute arbitration.
Incorrect
Arbitration disclosure to associated persons signing or acknowledging Form U4 (FINRA Rule 2263) – a member is to provide an associated person with a specific written statement at any time the person is asked to sign or initial a Form U4. This statement ensures the person understands predispute arbitration.
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Question 10 of 10
10. Question
What is the importance of guidelines mentioned in FINRA Rule 3240?
Correct
These guidelines are meant to protect the broker-customer relationship and to ensure that all transactions between the two parties fit within the scope of appropriate transactions that are covered within the regulatory guidelines.
Incorrect
These guidelines are meant to protect the broker-customer relationship and to ensure that all transactions between the two parties fit within the scope of appropriate transactions that are covered within the regulatory guidelines.