FINRA Series 54 - Pauline - Quiz 10.new
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Question 1 of 10
1. Question
Which of the following statements are true about the books and records to be made and maintained by a municipal advisor?
I. Original or copies of all written communications received and sent by the municipal advisor.
II. All checkbooks, bank statements, general ledgers, canceled checks, and cash reconciliations of the municipal advisor.
III. Written consents to service of process from each natural person who is associated with the municipal advisor and engages in municipal advisory activities solely on behalf of the municipal advisor.
IV. Copy of each version of the municipal advisor’s policies and procedures that are in effect and at any time within the last ten (10) years were in effect, including those in effect prior to July 4, 2014.Correct
According to SEC Rule 15Ba 1-8, A municipal advisor shall make and keep true and accurate, and current books and records relating to its municipal advisory activities. Keeping the original or copies of all written communications received and sent by the municipal advisor; All checkbooks, bank statements, general ledgers, canceled checks, and cash reconciliations of the municipal advisor; and; written consents to service of process from each natural person who is associated to the municipal advisor are just some of the documents needed to be made and maintained by a municipal advisor. The copy of each version of the municipal advisor’s policies and procedures that are in effect are also one of them, but the date in effect must be within five (5) years, not including those in effect prior to July 1, 2014.
Incorrect
According to SEC Rule 15Ba 1-8, A municipal advisor shall make and keep true and accurate, and current books and records relating to its municipal advisory activities. Keeping the original or copies of all written communications received and sent by the municipal advisor; All checkbooks, bank statements, general ledgers, canceled checks, and cash reconciliations of the municipal advisor; and; written consents to service of process from each natural person who is associated to the municipal advisor are just some of the documents needed to be made and maintained by a municipal advisor. The copy of each version of the municipal advisor’s policies and procedures that are in effect are also one of them, but the date in effect must be within five (5) years, not including those in effect prior to July 1, 2014.
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Question 2 of 10
2. Question
Which of the following contents must be included in the books and records of a municipal advisor?
I. The names, titles, and business, and residence addresses of all persons associated with the municipal advisor.
II. The name and business address of each person to whom the municipal advisor agrees to provide, directly or indirectly, payment to solicit a municipal entity, an employee of a municipal entity, or an obligated person on its behalf.
III. All municipal entities or obligated persons with which the municipal advisor is engaging or has engaged in municipal activities in the past five (5) years, including those prior to July 1, 2014.
IV. The name and business address of each person that disagrees to provide payment to the municipal advisor to solicit a municipal entity.Correct
According to SEC Rule 15Ba 7, the municipal advisor’s list of books and records must contain some of the following information: The names, titles, and business, and residence addresses of all persons associated with the municipal advisor; and the name and business address of each person to whom the municipal advisor agrees to provide, directly or indirectly, payment to solicit a municipal entity, an employee of a municipal entity, or an obligated person on its behalf. The information of all municipal entities or obligated persons with which the municipal advisor is engaging or has engaged in municipal activities in the past five (5) years are also included, but the municipal entities and obligated persons that engaged prior to July 1, 2014, are not included in the list. Also, the municipal advisor must also keep the records of the name and business address of each person that provides or agrees to provide payment, directly or indirectly, to the municipal advisor to solicit a municipal entity, an employee of a municipal entity, or an obligated person on its behalf.
Incorrect
According to SEC Rule 15Ba 7, the municipal advisor’s list of books and records must contain some of the following information: The names, titles, and business, and residence addresses of all persons associated with the municipal advisor; and the name and business address of each person to whom the municipal advisor agrees to provide, directly or indirectly, payment to solicit a municipal entity, an employee of a municipal entity, or an obligated person on its behalf. The information of all municipal entities or obligated persons with which the municipal advisor is engaging or has engaged in municipal activities in the past five (5) years are also included, but the municipal entities and obligated persons that engaged prior to July 1, 2014, are not included in the list. Also, the municipal advisor must also keep the records of the name and business address of each person that provides or agrees to provide payment, directly or indirectly, to the municipal advisor to solicit a municipal entity, an employee of a municipal entity, or an obligated person on its behalf.
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Question 3 of 10
3. Question
Which of the following is true about the Municipal Advisory Client Complaints as per the Municipal Securities Rulemaking Board?
I. A record of all written complaints of municipal advisory clients or persons acting on behalf of municipal advisory clients.
II. This record must be kept in an electronic format using the complaint product and problem codes set forth in the Municipal Securities Rulemaking Board G-8 Customer and Municipal Advisory Client Complaint Product and Problem Code Guides.
III. This record must always include the municipal advisory client number or code.
IV. This record must not include the name of each associated person of the municipal advisor identified in the complaint.Correct
According to MSRB Rule G-8 (h)(vi), a Municipal Advisory Client Complaint is a record of all written complaints of municipal advisory clients or persons acting on behalf of municipal advisory clients that are received by the municipal advisor. This record must include the complainant’s name, address, and municipal advisory client number, if provided; the date of the complaint was received; the date of the activity that gave rise to the complaint; a description of the nature of the complaint; and what action, if provided, has been taken by the municipal advisor in connection with the complaint. The record must be in an electronic format using the complaint product and problem codes set forth in the Municipal Securities Rulemaking Board Rule G-8 Customer and Municipal Advisory Client Compliant Product and Problem Codes Guide.
Incorrect
According to MSRB Rule G-8 (h)(vi), a Municipal Advisory Client Complaint is a record of all written complaints of municipal advisory clients or persons acting on behalf of municipal advisory clients that are received by the municipal advisor. This record must include the complainant’s name, address, and municipal advisory client number, if provided; the date of the complaint was received; the date of the activity that gave rise to the complaint; a description of the nature of the complaint; and what action, if provided, has been taken by the municipal advisor in connection with the complaint. The record must be in an electronic format using the complaint product and problem codes set forth in the Municipal Securities Rulemaking Board Rule G-8 Customer and Municipal Advisory Client Compliant Product and Problem Codes Guide.
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Question 4 of 10
4. Question
Which of the following statements are true about Non-resident Municipal Advisors?
I. They must comply with the provisions of SEC Rule 15Ba 1-8 (f).
II. Each registered non-resident municipal advisor shall keep, maintain, and preserve at a place within the United States designated by a Municipal Advisor.
III. They must provide a written notice specifying the address where the copies of the books, records required to be kept, maintained, and preserved within sixty (60) calendar days.
IV. A non-resident municipal advisor does not need to keep, maintain, or preserve files within the United States if they file a written undertaking signed by a duly authorized person.Correct
As per the MSRB Rule G-9, the records of non-resident municipal advisors must comply with the provisions of SEC Rule 15Ba1-8(f). SEC Rule 15Ba1-8(f) states that each non-resident municipal advisor registered or applying for registration shall keep, maintain, and preserve, at a place within the United States designated by a municipal advisor. Also, a non-resident municipal advisor shall provide to the Commission a written notice specifying the address where the copies of the books and records required to be kept, maintained, and preserved within thirty (30) calendar days. But, a non-resident municipal advisor does not need to keep, maintain, or preserve files within the United States if the non-resident municipal advisor files with the Commission a written undertaking signed by a duly authorized person.
Incorrect
As per the MSRB Rule G-9, the records of non-resident municipal advisors must comply with the provisions of SEC Rule 15Ba1-8(f). SEC Rule 15Ba1-8(f) states that each non-resident municipal advisor registered or applying for registration shall keep, maintain, and preserve, at a place within the United States designated by a municipal advisor. Also, a non-resident municipal advisor shall provide to the Commission a written notice specifying the address where the copies of the books and records required to be kept, maintained, and preserved within thirty (30) calendar days. But, a non-resident municipal advisor does not need to keep, maintain, or preserve files within the United States if the non-resident municipal advisor files with the Commission a written undertaking signed by a duly authorized person.
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Question 5 of 10
5. Question
Which of the following entities that are engaged in municipal securities activities must register with the Municipal Securities Rulemaking Board?
I. Dealers
II. Municipal Advisor
III. Investment Houses
IV. Municipal Securities DealerCorrect
Brokers, dealers, municipal securities dealers, and municipal advisors who are prior to engaging in municipal securities activities. These institutions or persons must be registered with the Municipal Securities Rulemaking Board under the rule of MSRB Rule A-12.
Incorrect
Brokers, dealers, municipal securities dealers, and municipal advisors who are prior to engaging in municipal securities activities. These institutions or persons must be registered with the Municipal Securities Rulemaking Board under the rule of MSRB Rule A-12.
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Question 6 of 10
6. Question
Which of the following statements are true about the MSRB Registration?
I. Brokers, dealers, municipal securities dealers, and municipal securities dealers who are engaged in municipal securities activities must register with the Municipal Securities Rulemaking Board.
II. Entities can still operate while waiting for their registration to be effective by the MSRB.
III. Entities must completely secure the Form A-12 and other forms and must pay the associated fees upon registration
IV. Entities can update their existing registrationCorrect
Under the MSRB Rule A-12, brokers, dealers, municipal securities dealers, and municipal advisors are required to register with the MSRB. They must fill out and submit Form A-12 with the information needed and secure the initial registration and its annual registration fees. Entities with an existing registration can update the registration information within thirty (30) days of changes in relevant information, in affirming registration information during the Annual Affirmation Period; and; in notifying the MSRB of a withdrawal of registration.
Incorrect
Under the MSRB Rule A-12, brokers, dealers, municipal securities dealers, and municipal advisors are required to register with the MSRB. They must fill out and submit Form A-12 with the information needed and secure the initial registration and its annual registration fees. Entities with an existing registration can update the registration information within thirty (30) days of changes in relevant information, in affirming registration information during the Annual Affirmation Period; and; in notifying the MSRB of a withdrawal of registration.
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Question 7 of 10
7. Question
Who is/are the authorized persons to make updates and changes in Form A-12?
I. Primary Regulatory Contact
II. Secondary Account Administrator
III. Compliance Contact
IV. SEC GovernorCorrect
As per MSRB A-12, the following persons are authorized to make changes in Form A-12: the Primary Regulatory Contact, Optional Regulatory Contact, Master Account Administrator, and Compliance Contact. These contacts mentioned are required in filling out the contact information section of Form A-12.
Incorrect
As per MSRB A-12, the following persons are authorized to make changes in Form A-12: the Primary Regulatory Contact, Optional Regulatory Contact, Master Account Administrator, and Compliance Contact. These contacts mentioned are required in filling out the contact information section of Form A-12.
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Question 8 of 10
8. Question
In registering as a new municipal advisor, which of the following statements is true?
I. A person applying for registration with the commission as a municipal advisor must complete both Form MA and Form MA-I.
II. Form MA and Form MA-I must be passed to the Commission electronically.
III. A person applying for registration may pass either Form MA or Form MA-I.
IV. The registration can be made in the nearest satellite branches.Correct
As per SEC Rule 15Ba 1-2, a person applying for registration with the Commission as a municipal advisor must complete Form MA and Form MA-I. These forms together with the additional required documents must be passed electronically with the Commission.
Incorrect
As per SEC Rule 15Ba 1-2, a person applying for registration with the Commission as a municipal advisor must complete Form MA and Form MA-I. These forms together with the additional required documents must be passed electronically with the Commission.
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Question 9 of 10
9. Question
Which of the following roles does an underwriter do?
I. Purchase securities for distribution in an arm’s-length commercial transaction.
II. Reviews official statements in accordance with, and as part of, its responsibilities to investors.
III. Responsible for monthly marketing strategy.
IV. Purchase securities from an issuer at a fair and reasonable price.Correct
As per the MSRB Rule G-17, an underwriter’s role are the following: (a) purchasing securities for distribution in an arms-length commercial transaction; (b) an underwriter does not have a federal fiduciary duty to state or local issuers, they are not required to act on in the issuer’s best interest without regard to its own financial or other interest; (c) purchasing securities from the issuer at a fair and reasonable price, but must balance that duty is a duty to sell municipal securities to investors at prices that are fair and reasonable; and; (d) reviewing official statements in accordance with, and as part of, of its responsibilities to investors under the federal securities law.
Incorrect
As per the MSRB Rule G-17, an underwriter’s role are the following: (a) purchasing securities for distribution in an arms-length commercial transaction; (b) an underwriter does not have a federal fiduciary duty to state or local issuers, they are not required to act on in the issuer’s best interest without regard to its own financial or other interest; (c) purchasing securities from the issuer at a fair and reasonable price, but must balance that duty is a duty to sell municipal securities to investors at prices that are fair and reasonable; and; (d) reviewing official statements in accordance with, and as part of, of its responsibilities to investors under the federal securities law.
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Question 10 of 10
10. Question
Which of the following statements are true about the selection of underwriters for new issues of securities through Requests For Proposals (RFPs)?
I. Accurate and truthful in their responses to Requests for Proposals (RFPs)
II. Does not misrepresent their personnel’s expertise with a particular type of financing in such a response.
III. Must be biased and disregard facts
IV. Can accept bribes and manipulate the dataCorrect
The MSRB Rule G-17 or also known as the “fair dealing” rule states that an underwriter must deal fairly at all times with the state and local government issuers and investors. In the selection of underwriters for new issues of securities through Requests for Proposals (RFPs) or Requests for Qualifications (RFQs), an underwriter must be: (a) be accurate and truthful in their responses to RFPs or RFQs; (b) does not omit material facts; and; (c) does not misrepresent their personnel’s expertise with a particular type of financing in such responses.
Incorrect
The MSRB Rule G-17 or also known as the “fair dealing” rule states that an underwriter must deal fairly at all times with the state and local government issuers and investors. In the selection of underwriters for new issues of securities through Requests for Proposals (RFPs) or Requests for Qualifications (RFQs), an underwriter must be: (a) be accurate and truthful in their responses to RFPs or RFQs; (b) does not omit material facts; and; (c) does not misrepresent their personnel’s expertise with a particular type of financing in such responses.