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Question 1 of 10
1. Question
Since the adoption of the “5% Policy,” the Board has determined the following except?
Correct
The “5% Policy” is a GUIDE, not a RULE.
Incorrect
The “5% Policy” is a GUIDE, not a RULE.
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Question 2 of 10
2. Question
Transactions that involve a small amount of money may warrant what?
Correct
Small amount money transactions need to cover up the expenses of handling, hence they warrant a HIGHER percentage of mark-up.
Incorrect
Small amount money transactions need to cover up the expenses of handling, hence they warrant a HIGHER percentage of mark-up.
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Question 3 of 10
3. Question
What kind of a transaction would include the so-called “riskless” or “simultaneous” transaction?
Correct
A transaction would include the so-called “riskless” or “simultaneous” transaction if in it a member buys a security to fill an order for the same security previously received from a customer.
Incorrect
A transaction would include the so-called “riskless” or “simultaneous” transaction if in it a member buys a security to fill an order for the same security previously received from a customer.
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Question 4 of 10
4. Question
According to FINRA 5130, all of the following are general prohibitions except?
Correct
Any sales or purchases from one member of the selling group to another member of the selling group that are incidental to the distribution of a new issue to a non-restricted person at the public offering price shall not be prohibited under the general prohibitions of FINRA 5130.
Incorrect
Any sales or purchases from one member of the selling group to another member of the selling group that are incidental to the distribution of a new issue to a non-restricted person at the public offering price shall not be prohibited under the general prohibitions of FINRA 5130.
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Question 5 of 10
5. Question
Preconditions for the sale says that before selling a new issue to any account, a member must in good faith have obtained a representation from Beneficial Owners and Conduits within how much time prior to such sale?
Correct
According to preconditions for the sale, a member must in good faith have obtained a representation from Beneficial Owners and Conduits within TWELVE months prior to such sale, before selling a new issue to any account.
Incorrect
According to preconditions for the sale, a member must in good faith have obtained a representation from Beneficial Owners and Conduits within TWELVE months prior to such sale, before selling a new issue to any account.
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Question 6 of 10
6. Question
Which of the following is NOT a general exemption of the FINRA Rule 5130 that shall apply to sales to and purchases by the following accounts or persons, whether directly or through accounts in which such persons have a beneficial interest?
Correct
Some of the general exemptions of the FINRA Rule 5130 that shall apply to sales to and purchases by the following accounts or persons, whether directly or through accounts in which such persons have a beneficial interest are the following:
– An investment company registered under the Investment Company Act.
– An account if the beneficial interests of restricted persons do not exceed in the aggregate 10% of such account.
– A state or municipal government benefits plan that is subject to state and/or municipal regulation.Incorrect
Some of the general exemptions of the FINRA Rule 5130 that shall apply to sales to and purchases by the following accounts or persons, whether directly or through accounts in which such persons have a beneficial interest are the following:
– An investment company registered under the Investment Company Act.
– An account if the beneficial interests of restricted persons do not exceed in the aggregate 10% of such account.
– A state or municipal government benefits plan that is subject to state and/or municipal regulation. -
Question 7 of 10
7. Question
Broker-Dealer Personnel includes all of these except?
Correct
Broker-Dealer Personnel includes:
(i) Any officer, director, general partner, associated person or employee of a member or any other broker-dealer (other than a limited business broker-dealer);
(ii) Any agent of a member or any other broker-dealer (other than a limited business broker-dealer) that is engaged in the investment banking or securities business; or
(iii) An immediate family member of a person specified in (i) and (ii) such that he/she:
a. materially supports, or receives material support from, the immediate family member;
b. is employed by or associated with the member, or an affiliate of the member, selling the new issue to the immediate family member; or
c. has an ability to control the allocation of the new issue.Incorrect
Broker-Dealer Personnel includes:
(i) Any officer, director, general partner, associated person or employee of a member or any other broker-dealer (other than a limited business broker-dealer);
(ii) Any agent of a member or any other broker-dealer (other than a limited business broker-dealer) that is engaged in the investment banking or securities business; or
(iii) An immediate family member of a person specified in (i) and (ii) such that he/she:
a. materially supports, or receives material support from, the immediate family member;
b. is employed by or associated with the member, or an affiliate of the member, selling the new issue to the immediate family member; or
c. has an ability to control the allocation of the new issue. -
Question 8 of 10
8. Question
Any person who has authority to buy or sell securities for a bank, savings and loan institution, insurance company, investment company, investment advisor or collective investment account is called?
Correct
A Portfolio Managers is any person who has authority to buy or sell securities for a bank, savings and loan institution, insurance company, investment company, investment advisor or collective investment account
OR
An immediate family member of a person specified in the above statement that materially supports, or receives material support from, such person.Incorrect
A Portfolio Managers is any person who has authority to buy or sell securities for a bank, savings and loan institution, insurance company, investment company, investment advisor or collective investment account
OR
An immediate family member of a person specified in the above statement that materially supports, or receives material support from, such person. -
Question 9 of 10
9. Question
The book-running managing underwriter of a new issue shall be required to file which of the following information in the time and manner specified by FINRA with respect to new issues?
Correct
The book-running managing underwriter of a new issue shall be required to file the following information in the time and manner specified by FINRA with respect to new issues:
(1) the initial list of distribution participants and their underwriting commitment and retention amounts on or before the offering date; and
(2) the final list of distribution participants and their underwriting commitment and retention amounts no later than three business days after the offering date.Incorrect
The book-running managing underwriter of a new issue shall be required to file the following information in the time and manner specified by FINRA with respect to new issues:
(1) the initial list of distribution participants and their underwriting commitment and retention amounts on or before the offering date; and
(2) the final list of distribution participants and their underwriting commitment and retention amounts no later than three business days after the offering date. -
Question 10 of 10
10. Question
According to ‘Trading Ahead of Research Reports’ (FINRA Rule 5280), to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, what should a member do?
Correct
A member must ESTABLISH, MAINTAIN AND ENFORCE policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.
Incorrect
A member must ESTABLISH, MAINTAIN AND ENFORCE policies and procedures reasonably designed to restrict or limit the information flow between research department personnel, or other persons with knowledge of the content or timing of a research report, and trading department personnel, so as to prevent trading department personnel from utilizing non-public advance knowledge of the issuance or content of a research report for the benefit of the member or any other person.