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Question 1 of 10
1. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following statement(s) satisfies the term “nontransferable asset” that is incapable of being transferred from the carrying member to the receiving member?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the following statement(s) satisfies the term “nontransferable asset” that is incapable of being transferred from the carrying member to the receiving member:-
(a) An asset that is a proprietary product of the carrying member.
(b) An asset that is a product of a third party (e.g., mutual fund/money market fund) with which the receiving member does not maintain the relationship or arrangement necessary to receive/carry the asset for the customer’s account.
(c) An asset that may not be received due to regulatory limitations on the scope of the receiving member’s business.
(d) An asset that is a bankrupt issue for which the carrying member does not possess (which shall be deemed to include possession at a securities depository for the carrying member’s account) the proper denominations or quantity of shares necessary to effect delivery and no transfer agent is available to re-register the shares.
(e) An asset that is an issue for which the proper denominations cannot be obtained pursuant to governmental regulation or the issuance terms of the product (e.g., foreign securities, baby bonds, etc.).
(f) Limited partnership interests in retail accounts.Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the following statement(s) satisfies the term “nontransferable asset” that is incapable of being transferred from the carrying member to the receiving member:-
(a) An asset that is a proprietary product of the carrying member.
(b) An asset that is a product of a third party (e.g., mutual fund/money market fund) with which the receiving member does not maintain the relationship or arrangement necessary to receive/carry the asset for the customer’s account.
(c) An asset that may not be received due to regulatory limitations on the scope of the receiving member’s business.
(d) An asset that is a bankrupt issue for which the carrying member does not possess (which shall be deemed to include possession at a securities depository for the carrying member’s account) the proper denominations or quantity of shares necessary to effect delivery and no transfer agent is available to re-register the shares.
(e) An asset that is an issue for which the proper denominations cannot be obtained pursuant to governmental regulation or the issuance terms of the product (e.g., foreign securities, baby bonds, etc.).
(f) Limited partnership interests in retail accounts. -
Question 2 of 10
2. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the carrying member and the receiving member must promptly resolve and reverse any nontransferable assets that were not properly identified during validation. In all cases, each member shall promptly update its records and bookkeeping systems and notify which of the following authority about the action taken?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the carrying member and the receiving member must promptly resolve and reverse any nontransferable assets that were not properly identified during validation. In all cases, each member shall promptly update its records and bookkeeping systems and notify the customer about the action taken.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the carrying member and the receiving member must promptly resolve and reverse any nontransferable assets that were not properly identified during validation. In all cases, each member shall promptly update its records and bookkeeping systems and notify the customer about the action taken.
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Question 3 of 10
3. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), a proprietary product of the carrying member should be deemed nontransferable unless the transfer of product is accepted by which of the following authority?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), a proprietary product of the carrying member shall be deemed nontransferable unless the receiving member has agreed to accept the transfer of the product.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), a proprietary product of the carrying member shall be deemed nontransferable unless the receiving member has agreed to accept the transfer of the product.
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Question 4 of 10
4. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following authority distributes the resulting money balance to the customer if the customer has authorized liquidation or transfer of assets deemed to be nontransferable?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), If the customer has authorized liquidation or transfer of assets deemed to be nontransferable, the carrying member must distribute the resulting money balance to the customer or initiate the transfer within five (5) business days following receipt of the customer’s disposition instructions.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), If the customer has authorized liquidation or transfer of assets deemed to be nontransferable, the carrying member must distribute the resulting money balance to the customer or initiate the transfer within five (5) business days following receipt of the customer’s disposition instructions.
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Question 5 of 10
5. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), within how many days the carrying member shall initiate the transfer if the customer has authorized liquidation or transfer of assets deemed to be nontransferable?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), If the customer has authorized liquidation or transfer of assets deemed to be nontransferable, the carrying member must distribute the resulting money balance to the customer or initiate the transfer within five (5) business days following receipt of the customer’s disposition instructions.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), If the customer has authorized liquidation or transfer of assets deemed to be nontransferable, the carrying member must distribute the resulting money balance to the customer or initiate the transfer within five (5) business days following receipt of the customer’s disposition instructions.
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Question 6 of 10
6. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following authorized by the customer to the custodian/trustee for the account with respect to transfers of retirement plan securities account assets?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), with respect to transfers of retirement plan securities account assets, the customer authorizes the custodian/trustee for the account:-
(a) To deduct any outstanding fees due to the custodian/trustee from the credit balance in the account.
(b) If the account does not contain a credit balance, or if the credit balance in the account is insufficient to satisfy any outstanding fees due the custodian/trustee, to liquidate assets in the account to the extent necessary to satisfy any outstanding fees due the custodian/trustee.Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), with respect to transfers of retirement plan securities account assets, the customer authorizes the custodian/trustee for the account:-
(a) To deduct any outstanding fees due to the custodian/trustee from the credit balance in the account.
(b) If the account does not contain a credit balance, or if the credit balance in the account is insufficient to satisfy any outstanding fees due the custodian/trustee, to liquidate assets in the account to the extent necessary to satisfy any outstanding fees due the custodian/trustee. -
Question 7 of 10
7. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following action should be taken by a carrying member upon validation of an instruction to transfer securities account assets as a whole?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), upon validation of an instruction to transfer securities account assets in whole, a carrying member must “freeze” the account to be transferred, i.e., all open orders, with the exception of options positions that expire within seven (7) business days, must be canceled and no new orders may be taken.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), upon validation of an instruction to transfer securities account assets in whole, a carrying member must “freeze” the account to be transferred, i.e., all open orders, with the exception of options positions that expire within seven (7) business days, must be canceled and no new orders may be taken.
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Question 8 of 10
8. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following conditions a carrying member may take exception to a transfer instruction?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), a carrying member may take exception to a transfer instruction on the following conditions:-
(a) Additional documentation is required (e.g., legal documents such as death or marriage certificate).
(b) The account is “flat” and reflects no transferable assets.
(c) The account number is invalid (i.e., the account number is not on the carrying member’s books).
(d) It is a duplicate request.
(e) It violates the member’s credit policy.
(f) It contains unrecognized residual credit assets (receiving members cannot identify customers).
(g) The customer rescinds the instruction (e.g., the customer has submitted a written request to cancel transfer).
(h) There is a mismatch of the Social Security number/Tax ID (e.g., the number on the transfer instruction does not correspond to that on the carrying member’s records).
(j) The account title on the transfer instruction does not match that on the carrying member’s records.
(k) The account type on the transfer instruction does not correspond to that on the carrying member’s records.
(l) The transfer instruction is missing or contains an improper authorization (e.g., TIF requires an additional customer authorization or successor custodian’s acceptance authorization or custodial approval).
(m) The customer has taken possession of the assets in the account (e.g., the account assets in question have been transferred directly to the customer).Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), a carrying member may take exception to a transfer instruction on the following conditions:-
(a) Additional documentation is required (e.g., legal documents such as death or marriage certificate).
(b) The account is “flat” and reflects no transferable assets.
(c) The account number is invalid (i.e., the account number is not on the carrying member’s books).
(d) It is a duplicate request.
(e) It violates the member’s credit policy.
(f) It contains unrecognized residual credit assets (receiving members cannot identify customers).
(g) The customer rescinds the instruction (e.g., the customer has submitted a written request to cancel transfer).
(h) There is a mismatch of the Social Security number/Tax ID (e.g., the number on the transfer instruction does not correspond to that on the carrying member’s records).
(j) The account title on the transfer instruction does not match that on the carrying member’s records.
(k) The account type on the transfer instruction does not correspond to that on the carrying member’s records.
(l) The transfer instruction is missing or contains an improper authorization (e.g., TIF requires an additional customer authorization or successor custodian’s acceptance authorization or custodial approval).
(m) The customer has taken possession of the assets in the account (e.g., the account assets in question have been transferred directly to the customer). -
Question 9 of 10
9. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), within how many days following the validation of a transfer instruction, the carrying member must complete the transfer of the customer’s security account assets to the receiving member?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the carrying member must complete the transfer of the customer’s security account assets to the receiving member within three business days following the validation of a transfer instruction.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), the carrying member must complete the transfer of the customer’s security account assets to the receiving member within three business days following the validation of a transfer instruction.
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Question 10 of 10
10. Question
In the FINRA Rule 11870 (Customer Account Transfer Contracts), which of the following authority on completion of the transfer must immediately establish fail-to-receive and fail-to-deliver contracts at then-current market values upon their respective books of account against the long/short positions?
Correct
In the FINRA Rule 11870 (Customer Account Transfer Contracts), on completion of the transfer the receiving member and the carrying member must immediately establish fail-to-receive and fail-to-deliver contracts at then-current market values upon their respective books of account against the long/short positions.
Incorrect
In the FINRA Rule 11870 (Customer Account Transfer Contracts), on completion of the transfer the receiving member and the carrying member must immediately establish fail-to-receive and fail-to-deliver contracts at then-current market values upon their respective books of account against the long/short positions.