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Question 1 of 10
1. Question
Under FINRA Rule 8210, what conditions must a foreign regulator meet in entering an agreement in sharing information in FINRA’s possession for regulatory purposes?
I. The regulatory party must be assessed if he has proprietary interest to any of the members.
II. The regulatory party must comply with the generally accepted accounting principles.
III. A jurisdiction over common regulatory matters must be provided by the other regulatory party to the agreement
IV. The other regulatory party must reciprocate and share with FINRA information of regulatory interests or concerns.Correct
For other SROs and regulators under the FINRA Rule 8210, any agreements with a foreign regulator must have jurisdiction over common regulatory matters, and the agreement must reciprocate and share with FINRA information of regulatory interest or concern to FINRA. Any shared information must be treated confidentially and must not abuse privileges from such information from third parties.
Incorrect
For other SROs and regulators under the FINRA Rule 8210, any agreements with a foreign regulator must have jurisdiction over common regulatory matters, and the agreement must reciprocate and share with FINRA information of regulatory interest or concern to FINRA. Any shared information must be treated confidentially and must not abuse privileges from such information from third parties.
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Question 2 of 10
2. Question
In transmitting the notice in the provision of information and testimony and inspection and copying of books, where must the copy be transmitted?
I. At the last known business address of the member
II. At the last known residential address of the person
III. At any current address of the member or person
IV. At the address of the chief executive officerCorrect
Under FINRA Rule 8210, the notice on the provision of information received by the member must be transmitted and mailed to the last known business or residential address of the member or the person. Any current addresses of the member or the person must be stated to process the transmission. If the notice is represented by investigation counsel, it must be mailed to the counsel itself which is deemed received by the member or person.
Incorrect
Under FINRA Rule 8210, the notice on the provision of information received by the member must be transmitted and mailed to the last known business or residential address of the member or the person. Any current addresses of the member or the person must be stated to process the transmission. If the notice is represented by investigation counsel, it must be mailed to the counsel itself which is deemed received by the member or person.
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Question 3 of 10
3. Question
What medium must be used by FINRA and its members in carrying out responsibilities in Rule 8210 in establishing programs for the submission of information?
Correct
To carry out the responsibilities of FINRA Rule 8210, an electronic interface must be used on a regular basis, directly or indirectly, in submitting the information regarding the programs established. The member or the person must ensure that all information on a portable media device is encrypted.
Incorrect
To carry out the responsibilities of FINRA Rule 8210, an electronic interface must be used on a regular basis, directly or indirectly, in submitting the information regarding the programs established. The member or the person must ensure that all information on a portable media device is encrypted.
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Question 4 of 10
4. Question
What is the storage device where the information is submitted electronically such as flash drive, CD-ROM, DVD, portable hard drive, or computers?
Correct
As defined by FINRA Rule 8210, a “portable media device” is where information is stored. This device include a flash drive, CD-ROM, DVD, hard drive, computer, or disks. The information must be encrypted on these portable devices rather than submitting a hard copy of the reports.
Incorrect
As defined by FINRA Rule 8210, a “portable media device” is where information is stored. This device include a flash drive, CD-ROM, DVD, hard drive, computer, or disks. The information must be encrypted on these portable devices rather than submitting a hard copy of the reports.
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Question 5 of 10
5. Question
How does FINRA require business continuity plans and emergency contact information of a member?
I. A member may or may not write a business continuity plan if there is consistency in their performance.
II. A member must create a written business continuity plan to in meeting its existing obligations.
III. A member must update material changes on the operations, structure, business, or location.
IV. A monthly review of a business continuity plan must be conducted to determine the effect of the material changes reported.Correct
As compliance with FINRA Rue 4370, a member must create a written business continuity plan. In the plan, the update on material changes on the operations, structure, business, or location must be provided. This plan must be reviewed annually to determine to whether the material changes have impacted the operation, structure, business, or location.
Incorrect
As compliance with FINRA Rue 4370, a member must create a written business continuity plan. In the plan, the update on material changes on the operations, structure, business, or location must be provided. This plan must be reviewed annually to determine to whether the material changes have impacted the operation, structure, business, or location.
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Question 6 of 10
6. Question
Which of the following best describes an asset transfers?
Correct
Asset transfers are the process of allowing one community to take over the land or building that was publicly owned for the benefit of the whole community. The asset may be given or sold at a discounted price or with other grants or support. It is done by agreement to transfer the asset to the public.
Incorrect
Asset transfers are the process of allowing one community to take over the land or building that was publicly owned for the benefit of the whole community. The asset may be given or sold at a discounted price or with other grants or support. It is done by agreement to transfer the asset to the public.
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Question 7 of 10
7. Question
According to FINRA Rule 4515, when must a member be allowed to accept orders from investment advisers and make allocations on their orders?
Correct
In order for a member to accept orders from investment advisers, a member must receive first a specific account designation for the investment advisers or the customer names. This report must be received by noon of the next business day following the trading session. However, this only applies to orders with more than one customer.
Incorrect
In order for a member to accept orders from investment advisers, a member must receive first a specific account designation for the investment advisers or the customer names. This report must be received by noon of the next business day following the trading session. However, this only applies to orders with more than one customer.
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Question 8 of 10
8. Question
What term describes a reverse repurchase and repurchase positions and its charges, which are also included in the broker-dealer’s books and records?
Correct
Buy-sell (sell-buy) transactions refer to reverse repurchasing of an item. Its balances must be recorded on a broker-dealer’s books and records. Any brokers entered into a sell-buy transaction must have a written agreement from the counterparty of the transaction.
Incorrect
Buy-sell (sell-buy) transactions refer to reverse repurchasing of an item. Its balances must be recorded on a broker-dealer’s books and records. Any brokers entered into a sell-buy transaction must have a written agreement from the counterparty of the transaction.
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Question 9 of 10
9. Question
Which of the following haircut deductions is correct based on the SEA Rule 15c3-1?
I. For Japanese yen currency, a 5% haircut deduction shall be applied.
II. For Canadian dollar currency, a 6% haircut deduction shall be applied.
III. For British pound currency, a 20% deduction shall be applied.
IV. For Korean won currency, a 20% deduction shall be applied.Correct
In haircut deduction on foreign currency, a haircut deduction of 6% must be applied in Euro, British pound, Swiss franc, Canadian dollar, and Japanese yen only. On the other hand, currencies not mentioned shall apply a 20% haircut deduction. All foreign currency balances shall be treated as “inventory”.
Incorrect
In haircut deduction on foreign currency, a haircut deduction of 6% must be applied in Euro, British pound, Swiss franc, Canadian dollar, and Japanese yen only. On the other hand, currencies not mentioned shall apply a 20% haircut deduction. All foreign currency balances shall be treated as “inventory”.
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Question 10 of 10
10. Question
Under Section 5 of Insider Trading and Securities Fraud Enforcement Act of 1988, which of the following must be considered in determining the limitations on liability to contemporaneous traders for insider trading?
I. Contemporaneous trading actions limited to the profit gained or loss avoided
II. Offsetting disgorgements against liability
III. Controlling person liability
IV. Joint and solidary liabilityCorrect
In determining the limitations on liability, these four factors must be considered: contemporaneous trading actions limited to the profit gained or loss avoided, offsetting disgorgements against liability, controlling person liability, and the statute of limitations. These factors have its own limitation on liability based on the transactions incurred.
Incorrect
In determining the limitations on liability, these four factors must be considered: contemporaneous trading actions limited to the profit gained or loss avoided, offsetting disgorgements against liability, controlling person liability, and the statute of limitations. These factors have its own limitation on liability based on the transactions incurred.