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Question 1 of 10
1. Question
In the FINRA Rule 4110 (Capital Compliance), all subordinated loans or notes collateralized by securities shall meet such standard to ensure the continued financial stability and operational capability of the member, these standards are required to be ensured by which of the following authority?
Correct
In the FINRA Rule 4110 (Capital Compliance), all subordinated loans or notes collateralized by securities shall meet such standards as FINRA may require to ensure the continued financial stability and operational capability of the member.
Incorrect
In the FINRA Rule 4110 (Capital Compliance), all subordinated loans or notes collateralized by securities shall meet such standards as FINRA may require to ensure the continued financial stability and operational capability of the member.
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Question 2 of 10
2. Question
In the FINRA Rule 4110 (Capital Compliance), which of the following should be submitted by each member for the approval, in order to proceeds to qualify as capital acceptable for inclusion in the computation of the net capital of the member?
Correct
In the FINRA Rule 4110 (Capital Compliance), unless otherwise permitted by FINRA, each member partnership whose general partner enters into any secured or unsecured borrowing, the proceeds of which will be contributed to the capital of the member, shall submit the following for approval in order for such proceeds to qualify as capital acceptable for inclusion in the computation of the net capital of the member:-
(a) A signed copy of the loan agreement which must have at least a 12-month duration.
(b) A signed copy of the loan agreement which must provide non-recourse to the assets of the member.Incorrect
In the FINRA Rule 4110 (Capital Compliance), unless otherwise permitted by FINRA, each member partnership whose general partner enters into any secured or unsecured borrowing, the proceeds of which will be contributed to the capital of the member, shall submit the following for approval in order for such proceeds to qualify as capital acceptable for inclusion in the computation of the net capital of the member:-
(a) A signed copy of the loan agreement which must have at least a 12-month duration.
(b) A signed copy of the loan agreement which must provide non-recourse to the assets of the member. -
Question 3 of 10
3. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), within how much time each carrying or clearing member shall promptly notify FINRA in writing if its net capital falls below the 150 percent of its minimum dollar net capital requirement?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if its net capital falls below the 150 percent of its minimum dollar net capital requirement or such greater percentage thereof as may from time to time be designated by FINRA.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if its net capital falls below the 150 percent of its minimum dollar net capital requirement or such greater percentage thereof as may from time to time be designated by FINRA.
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Question 4 of 10
4. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), what is the percentage of the member’s net capital that falls below the minimum dollar net capital requirement than each carrying or clearing member should promptly notify FINRA in writing in any event within 24 hours?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if its net capital falls below the 150 percent of its minimum dollar net capital requirement or such greater percentage thereof as may from time to time be designated by FINRA.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if its net capital falls below the 150 percent of its minimum dollar net capital requirement or such greater percentage thereof as may from time to time be designated by FINRA.
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Question 5 of 10
5. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), what is the percentage of the member’s net capital that if falls below the minimum risk-based capital requirements of Commodity Exchange Act Rule 1.17 then each carrying or clearing member should promptly notify FINRA in writing in any event within 24 hours?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if the member is registered as a Futures Commission Merchant pursuant to the Commodity Exchange Act, and its net capital is less than 120% of the minimum risk-based capital requirements of Commodity Exchange Act Rule 1.17.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), In any event within 24 hours each carrying or clearing member shall promptly notify FINRA in writing if the member is registered as a Futures Commission Merchant pursuant to the Commodity Exchange Act, and its net capital is less than 120% of the minimum risk-based capital requirements of Commodity Exchange Act Rule 1.17.
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Question 6 of 10
6. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), what is the time period if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement continues to exist, a member that carries customer accounts or clears transactions shall not expand its business during that period of time?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), Except as otherwise permitted by FINRA in writing, a member that carries customer accounts or clears transactions shall not expand its business during any period in which if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement continue to exist for more than 15 consecutive business days, provided that such condition has been known to FINRA or the member for at least five consecutive business days. FINRA may issue a notice pursuant to Rule 9557 directing any such member not to expand its business.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), Except as otherwise permitted by FINRA in writing, a member that carries customer accounts or clears transactions shall not expand its business during any period in which if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement continue to exist for more than 15 consecutive business days, provided that such condition has been known to FINRA or the member for at least five consecutive business days. FINRA may issue a notice pursuant to Rule 9557 directing any such member not to expand its business.
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Question 7 of 10
7. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), what is the time period if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement known to FINRA or the member, a member that carries customer accounts or clears transactions shall not expand its business during that period of time?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), Except as otherwise permitted by FINRA in writing, a member that carries customer accounts or clears transactions shall not expand its business during any period in which if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement continue to exist for more than 15 consecutive business days, provided that such condition has been known to FINRA or the member for at least five consecutive business days. FINRA may issue a notice pursuant to Rule 9557 directing any such member not to expand its business.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), Except as otherwise permitted by FINRA in writing, a member that carries customer accounts or clears transactions shall not expand its business during any period in which if the condition of member’s net capital is less than 150 percent of its minimum dollar net capital requirement continue to exist for more than 15 consecutive business days, provided that such condition has been known to FINRA or the member for at least five consecutive business days. FINRA may issue a notice pursuant to Rule 9557 directing any such member not to expand its business.
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Question 8 of 10
8. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), which of the following authority restricts the member to expand its business during any period for any financial or operational reason?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), No member may expand its business during any period in which FINRA restricts the member from expanding its business for any financial or operational reason.
Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), No member may expand its business during any period in which FINRA restricts the member from expanding its business for any financial or operational reason.
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Question 9 of 10
9. Question
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), which of the following explains the term “expansion of business” for the purpose of restrictions on business expansion?
Correct
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), the following explains the term “expansion of business” for the purpose of restrictions on business expansion:-
(a) Net increase in the number of registered representatives or other producing personnel.
(b) Exceeding average capital commitments over the previous three months for market making or block positioning.
(c) Initiation of market-making in new securities or any new proprietary trading or other commitment in securities or commodities in which a market is not made (other than riskless trades associated with customer orders).
(d) Exceeding average commitments over the previous three months for underwritings.
(e) Opening of new branch offices.
(f) Entering any new line of business or deliberately promoting or expanding any present lines of business.
(g) Making unsecured or partially secured loans, advances, drawings, guarantees or other similar receivables.
(h) Such other activities as FINRA deems appropriate under the circumstances, in the public interest or for the protection of investors.Incorrect
In the FINRA Rule 4120 (Regulatory Notification and Business Curtailment), the following explains the term “expansion of business” for the purpose of restrictions on business expansion:-
(a) Net increase in the number of registered representatives or other producing personnel.
(b) Exceeding average capital commitments over the previous three months for market making or block positioning.
(c) Initiation of market-making in new securities or any new proprietary trading or other commitment in securities or commodities in which a market is not made (other than riskless trades associated with customer orders).
(d) Exceeding average commitments over the previous three months for underwritings.
(e) Opening of new branch offices.
(f) Entering any new line of business or deliberately promoting or expanding any present lines of business.
(g) Making unsecured or partially secured loans, advances, drawings, guarantees or other similar receivables.
(h) Such other activities as FINRA deems appropriate under the circumstances, in the public interest or for the protection of investors. -
Question 10 of 10
10. Question
In the FINRA Rule 4150 (Guarantees by, or Flow-through Benefits for, Members), Prior written notice shall be given to which of the following authority whenever any member guarantees, endorses or assumes, directly or indirectly, the obligations or liabilities of another person?
Correct
In the FINRA Rule 4150 (Guarantees by, or Flow-through Benefits for, Members), prior written notice shall be given to FINRA whenever any member guarantees, endorses or assumes, directly or indirectly, the obligations or liabilities of another person.
Incorrect
In the FINRA Rule 4150 (Guarantees by, or Flow-through Benefits for, Members), prior written notice shall be given to FINRA whenever any member guarantees, endorses or assumes, directly or indirectly, the obligations or liabilities of another person.