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Question 1 of 10
1. Question
What shall be time-stamped by the member in order to execute transactions in ADF-eligible securities as stated by FINRA Rule 6282?
Correct
Under FINRA Rule 6282, all trade tickets must be time-stamped by members at the time of execution for transactions in ADF-eligible securities. This time-stamp shall be expressed in hours, minutes, and seconds in military time format. This must be used on all last sale reports.
Incorrect
Under FINRA Rule 6282, all trade tickets must be time-stamped by members at the time of execution for transactions in ADF-eligible securities. This time-stamp shall be expressed in hours, minutes, and seconds in military time format. This must be used on all last sale reports.
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Question 2 of 10
2. Question
What conditions must be met in order to append the applicable trade report modifiers to all last sale reports as stated in FINRA Rule 6282?
I. If the trade is a marketable security
II. If the trade is a cash trade
III. If the trade is a next-day trade
IV. If the trade has been made within 10 seconds after the time of the agreementCorrect
If the trade is a cash trade or a next-day trade, members shall include it on appending trade report modifiers to all sale report. Other conditions to be met is if the trade occurs at a price based on average weighting pricing, if the trade is a seller’s options trade, and if the trade is a stop stock transaction.
Incorrect
If the trade is a cash trade or a next-day trade, members shall include it on appending trade report modifiers to all sale report. Other conditions to be met is if the trade occurs at a price based on average weighting pricing, if the trade is a seller’s options trade, and if the trade is a stop stock transaction.
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Question 3 of 10
3. Question
As defined in FINRA Rule 6220, what is a Stop Stock Transaction?
I. A transaction that includes a specific time of delivery without delays
II. An order made under a short sale where stocks are borrowed from the supplier
III. The order that was executed at the Stop Stock Price or better
IV. The transaction that results in an agreement of both parties that the orders will be executed at the Stop Stock Price or betterCorrect
It is stated in FINRA Rule 6220 that a stop stock transaction must meet two conditions: to have an agreement that the transaction will be executed at the Stop Stock Price, and if the order has really been executed a Stop Stock Price or better. Stop Stock Price means a specific price where the security is trading at the time the order is received.
Incorrect
It is stated in FINRA Rule 6220 that a stop stock transaction must meet two conditions: to have an agreement that the transaction will be executed at the Stop Stock Price, and if the order has really been executed a Stop Stock Price or better. Stop Stock Price means a specific price where the security is trading at the time the order is received.
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Question 4 of 10
4. Question
In assessing the risks that could affect the financing and operating activities of an entity, what factors shall be considered?
I. Consequences
II. Impact
III. Likelihood
IV. Related threatsCorrect
Consequences, impact, and likelihood must be included in assessing the risks of financing and operating activities of an entity. Consequences must be identified as insignificant, major, moderate, minor, or catastrophic. The likelihood shows the certainty of the specified risk. The impact would be the result of the risk assessment if it is a high imapct, extreme, low, or moderate.
Incorrect
Consequences, impact, and likelihood must be included in assessing the risks of financing and operating activities of an entity. Consequences must be identified as insignificant, major, moderate, minor, or catastrophic. The likelihood shows the certainty of the specified risk. The impact would be the result of the risk assessment if it is a high imapct, extreme, low, or moderate.
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Question 5 of 10
5. Question
In recordkeeping requirements for associated persons of a broker-dealer, what must be included in the organizational chart in preserving and maintaining the information?
I. Some of the associated persons of a broker or dealer
II. The designation of Material Associated Persons
III. The broker or dealer
IV. All associated persons of a broker or dealerCorrect
The organizational chart required in risk assessment recordkeeping of associated persons must consist of the broker or dealer and all of its associated persons. It must also indicate which associated persons are Material Associated Persons. Another requirement in recordkeeping is a written policy, procedures, or systems.
Incorrect
The organizational chart required in risk assessment recordkeeping of associated persons must consist of the broker or dealer and all of its associated persons. It must also indicate which associated persons are Material Associated Persons. Another requirement in recordkeeping is a written policy, procedures, or systems.
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Question 6 of 10
6. Question
Under SEA Rule 17h-1T, what information must be included in financing and capital adequacy as a requirement for risk assessment recordkeeping?
I. The restriction and limitation policies
II. The structure of debt capital
III. The sources of funding
IV. The narrative discussion of the liquidity of assetsCorrect
As a requirement for risk assessment recordkeeping of associated persons of brokers or dealers, the financing and capital adequacy must be preserved together with the sources of funding and its alternative, structure of debt capital, and a narrative discussion of the liquidity of material assets. The financing and capital adequacy is under the written policies requirement of SEA Rule 17h-1T.
Incorrect
As a requirement for risk assessment recordkeeping of associated persons of brokers or dealers, the financing and capital adequacy must be preserved together with the sources of funding and its alternative, structure of debt capital, and a narrative discussion of the liquidity of material assets. The financing and capital adequacy is under the written policies requirement of SEA Rule 17h-1T.
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Question 7 of 10
7. Question
Which of the following must be included in trading positions and risks under the written policy requirement in recordkeeping of risk assessments by the associated persons of a broker or dealer?
I. Limitations and restrictions on financial instruments
II. Limitations and restrictions on trading activities
III. Limitations and restrictions on trading securities
IV. Description of each limitation and restrictionCorrect
In a written policy concerning the trading positions and risks, the limitations and restrictions on financial instruments, trading activities, and trading securities must be indicated. The description of the types of reviews must also be included in monitoring the existing positions on each trading activity.
Incorrect
In a written policy concerning the trading positions and risks, the limitations and restrictions on financial instruments, trading activities, and trading securities must be indicated. The description of the types of reviews must also be included in monitoring the existing positions on each trading activity.
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Question 8 of 10
8. Question
Where must the letter for verification of the coverage’s extension to the proprietary securities in the custody of the foreign parent come from?
Correct
The letter to be provided by each firm for the securities deposited by U.S. subsidiaries with foreign parents must come from the subsidiary’s fidelity bond company. The letter must indicate that the coverage extends to the proprietary securities of the foreign parent’s bonding company.
Incorrect
The letter to be provided by each firm for the securities deposited by U.S. subsidiaries with foreign parents must come from the subsidiary’s fidelity bond company. The letter must indicate that the coverage extends to the proprietary securities of the foreign parent’s bonding company.
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Question 9 of 10
9. Question
Under whose name shall the proprietary securities be registered in allowing a net capital value for broker-dealers who are a subsidiary of a foreign parent?
Correct
For securities deposited by U.S. subsidiaries with a foreign parent, the proprietary securities must be registered in the subsidiary’s name. It must also be physically segregated in the foreign parent’s vault abroad. Its amount shall not exceed the tentative net capital for more than three business days.
Incorrect
For securities deposited by U.S. subsidiaries with a foreign parent, the proprietary securities must be registered in the subsidiary’s name. It must also be physically segregated in the foreign parent’s vault abroad. Its amount shall not exceed the tentative net capital for more than three business days.
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Question 10 of 10
10. Question
In the quarterly inspection of the subsidiary’s deposited proprietary securities, when must the results be reported in compliance with the SEA Rule 17a-5?
Correct
For the compliance of SEA Rule 17a-5, the results for quarterly inspection of the subsidiary’s deposited proprietary securities shall be submitted within 15 days after the actual inspection. This result shall be submitted to the independent public accountant for the parent to review it.
Incorrect
For the compliance of SEA Rule 17a-5, the results for quarterly inspection of the subsidiary’s deposited proprietary securities shall be submitted within 15 days after the actual inspection. This result shall be submitted to the independent public accountant for the parent to review it.