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Question 1 of 10
1. Question
As Definitions, which of the following meaning(s) is/are true?
Correct
6220. Definitions
(1) “Certification Record” means the document that an ADF Trading Center must execute and continue to comply with, pursuant to Rule 6250, to display its quotations through the ADF.
(2) “Nasdaq security” means any security listed on The NASDAQ Stock Market, LLC.
(3) “Normal unit of trading” means 100 shares of a security unless, with respect to a particular security, the market where the security is listed determines that a normal unit of trading shall constitute other than 100 shares.
(4) “Stop Stock Price” means the specified price at which a member and another party agree a Stop Stock Transaction shall be executed, and which price is based upon the prices at which the security is trading at the time the order is received by the member, taking into consideration that the specified price may deviate from the current market prices to factor in the size of the order and the number of shares available at those prices.Incorrect
6220. Definitions
(1) “Certification Record” means the document that an ADF Trading Center must execute and continue to comply with, pursuant to Rule 6250, to display its quotations through the ADF.
(2) “Nasdaq security” means any security listed on The NASDAQ Stock Market, LLC.
(3) “Normal unit of trading” means 100 shares of a security unless, with respect to a particular security, the market where the security is listed determines that a normal unit of trading shall constitute other than 100 shares.
(4) “Stop Stock Price” means the specified price at which a member and another party agree a Stop Stock Transaction shall be executed, and which price is based upon the prices at which the security is trading at the time the order is received by the member, taking into consideration that the specified price may deviate from the current market prices to factor in the size of the order and the number of shares available at those prices. -
Question 2 of 10
2. Question
Regarding the Finra Rule 4511, how long will the members preserve those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules?
Correct
4511. General Requirements
(a) Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules.
(b) Members shall preserve for a period of at least six years those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules.
(c) All books and records required to be made pursuant to the FINRA rules shall be preserved in a format and media that complies with SEA Rule 17a-4.Incorrect
4511. General Requirements
(a) Members shall make and preserve books and records as required under the FINRA rules, the Exchange Act and the applicable Exchange Act rules.
(b) Members shall preserve for a period of at least six years those FINRA books and records for which there is no specified period under the FINRA rules or applicable Exchange Act rules.
(c) All books and records required to be made pursuant to the FINRA rules shall be preserved in a format and media that complies with SEA Rule 17a-4. -
Question 3 of 10
3. Question
Which of the following meaning(s) is/are untrue regarding Settlement of Syndicate Accounts?
Correct
11880. Settlement of Syndicate Accounts
Definitions
(1) “Selling syndicate” means any syndicate formed in connection with a public offering to distribute all or part of an issue of corporate securities by sales made directly to the public by or through participants in such syndicate.
(2) “Syndicate account” means an account formed by members of the selling syndicate for the purpose of purchasing and distributing the corporate securities of a public offering.
(3) “Syndicate manager” means the member of the selling syndicate that is responsible for maintenance of syndicate account records.
(4) “Syndicate settlement date” means the date upon which corporate securities of a public offering are delivered by the issuer to or for the account of the syndicate members.Incorrect
11880. Settlement of Syndicate Accounts
Definitions
(1) “Selling syndicate” means any syndicate formed in connection with a public offering to distribute all or part of an issue of corporate securities by sales made directly to the public by or through participants in such syndicate.
(2) “Syndicate account” means an account formed by members of the selling syndicate for the purpose of purchasing and distributing the corporate securities of a public offering.
(3) “Syndicate manager” means the member of the selling syndicate that is responsible for maintenance of syndicate account records.
(4) “Syndicate settlement date” means the date upon which corporate securities of a public offering are delivered by the issuer to or for the account of the syndicate members. -
Question 4 of 10
4. Question
Regarding Settlement of Underwritten Public Offerings, which of the following statement(s) is/are true?
Correct
11880. Settlement of Syndicate Accounts
Settlement of Underwritten Public Offerings
The syndicate manager of a public offering underwritten on a “firm-commitment” basis shall, immediately, but in no event later than the scheduled closing date, notify the FINRA’s Operation Department of any anticipated delay in the closing of such offering beyond the closing date in the offering document or any subsequent delays in the closing date previously reported pursuant to this Rule.Incorrect
11880. Settlement of Syndicate Accounts
Settlement of Underwritten Public Offerings
The syndicate manager of a public offering underwritten on a “firm-commitment” basis shall, immediately, but in no event later than the scheduled closing date, notify the FINRA’s Operation Department of any anticipated delay in the closing of such offering beyond the closing date in the offering document or any subsequent delays in the closing date previously reported pursuant to this Rule. -
Question 5 of 10
5. Question
Which of the following definition(s) is/are true?
Correct
5122. Private Placements of Securities Issued by Members
Definitions
(1) Member Private Offering
A “member private offering” means a private placement of unregistered securities issued by a member or a control entity.
(2) Control Entity
A “control entity” means any entity that controls or is under common control with a member, or that is controlled by a member or its associated persons.
(3) Control
The term “control” means beneficial interest, as defined in Rule 5130(i)(1), of more than 50 percent of the outstanding voting securities of a corporation, or the right to more than 50 percent of the distributable profits or losses of a partnership or other non-corporate legal entity. Control will be determined immediately after the closing of an offering, and in the case of an offering with multiple intended closings, immediately following each closing.
(4) Private Placement
The term “private placement” means a non-public offering of securities conducted in reliance on an available exemption from registration under the Securities Act.Incorrect
5122. Private Placements of Securities Issued by Members
Definitions
(1) Member Private Offering
A “member private offering” means a private placement of unregistered securities issued by a member or a control entity.
(2) Control Entity
A “control entity” means any entity that controls or is under common control with a member, or that is controlled by a member or its associated persons.
(3) Control
The term “control” means beneficial interest, as defined in Rule 5130(i)(1), of more than 50 percent of the outstanding voting securities of a corporation, or the right to more than 50 percent of the distributable profits or losses of a partnership or other non-corporate legal entity. Control will be determined immediately after the closing of an offering, and in the case of an offering with multiple intended closings, immediately following each closing.
(4) Private Placement
The term “private placement” means a non-public offering of securities conducted in reliance on an available exemption from registration under the Securities Act. -
Question 6 of 10
6. Question
Regarding Disclosure Requirements, which of the following statement(s) is/are true?
Correct
5122. Private Placements of Securities Issued by Members
Disclosure Requirements
(A) If an offering has a private placement memorandum or term sheet, then such memorandum or term sheet must be provided to each prospective investor and must contain disclosures addressing:
(i) intended use of the offering proceeds; and
(ii) offering expenses and the amount of selling compensation that will be paid to the member and its associated persons.Incorrect
5122. Private Placements of Securities Issued by Members
Disclosure Requirements
(A) If an offering has a private placement memorandum or term sheet, then such memorandum or term sheet must be provided to each prospective investor and must contain disclosures addressing:
(i) intended use of the offering proceeds; and
(ii) offering expenses and the amount of selling compensation that will be paid to the member and its associated persons. -
Question 7 of 10
7. Question
Which of the following statement(s) is/are true about Filing Requirements?
Correct
5122. Private Placements of Securities Issued by Members
Filing Requirements
A member must file the private placement memorandum, term sheet or such other offering document with the Corporate Financing Department at or prior to the first time the document is provided to any prospective investor. Any amendment(s) or exhibit(s) to the private placement memorandum, term sheet or other offering document also must be filed with the Department within ten days of being provided to any investor or prospective investor.Incorrect
5122. Private Placements of Securities Issued by Members
Filing Requirements
A member must file the private placement memorandum, term sheet or such other offering document with the Corporate Financing Department at or prior to the first time the document is provided to any prospective investor. Any amendment(s) or exhibit(s) to the private placement memorandum, term sheet or other offering document also must be filed with the Department within ten days of being provided to any investor or prospective investor. -
Question 8 of 10
8. Question
Regarding Use of Offering Proceeds, which of the following statement(s) is/are true?
Correct
5122. Private Placements of Securities Issued by Members
Use of Offering Proceeds
For each Member Private Offering, at least 85% of the offering proceeds raised must be used for business purposes, which shall not include offering costs, discounts, commissions or any other cash or non-cash sales incentives. The use of the offering proceeds also must be consistent with the disclosures required in paragraph (b)(1).Incorrect
5122. Private Placements of Securities Issued by Members
Use of Offering Proceeds
For each Member Private Offering, at least 85% of the offering proceeds raised must be used for business purposes, which shall not include offering costs, discounts, commissions or any other cash or non-cash sales incentives. The use of the offering proceeds also must be consistent with the disclosures required in paragraph (b)(1). -
Question 9 of 10
9. Question
Which of the following Member Private Offerings is/are untrue for exempt from the requirements of this Rule?
Correct
5122. Private Placements of Securities Issued by Members
Exemptions
The following Member Private Offerings are exempt from the requirements of this Rule:
(1) offerings sold solely to:
(A) institutional accounts, as defined in Rule 4512(c);
(B) qualified purchasers, as defined in Section 2(a)(51)(A) of the Investment Company Act;
(C) qualified institutional buyers, as defined in Securities Act Rule 144A;
(D) investment companies, as defined in Section 3 of the Investment Company Act;
(E) an entity composed exclusively of qualified institutional buyers, as defined in Securities Act Rule 144A; and
(F) banks, as defined in Section 3(a)(2) of the Securities Act.Incorrect
5122. Private Placements of Securities Issued by Members
Exemptions
The following Member Private Offerings are exempt from the requirements of this Rule:
(1) offerings sold solely to:
(A) institutional accounts, as defined in Rule 4512(c);
(B) qualified purchasers, as defined in Section 2(a)(51)(A) of the Investment Company Act;
(C) qualified institutional buyers, as defined in Securities Act Rule 144A;
(D) investment companies, as defined in Section 3 of the Investment Company Act;
(E) an entity composed exclusively of qualified institutional buyers, as defined in Securities Act Rule 144A; and
(F) banks, as defined in Section 3(a)(2) of the Securities Act. -
Question 10 of 10
10. Question
Regarding Exemptions, which of the following Member Private Offerings is/are incorrect while exempt from the requirements of this Rule
Correct
5122. Private Placements of Securities Issued by Members
Exemptions
The following Member Private Offerings are exempt from the requirements of this Rule:
(2) offerings of exempted securities, as defined in Section 3(a)12 of the Exchange Act;
(3) offerings made pursuant to Securities Act Rule 144A or SEC Regulation S;
(4) offerings in which a member acts primarily in a wholesaling capacity (i.e., it intends, as evidenced by a selling agreement, to sell through its affiliate broker-dealers, less than 20% of the securities in the offering);
(5) offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act;
(6) offerings of subordinated loans under SEA Rule 15c3-1, Appendix D (see NASD Notice to Members 02-32 (June 2002));Incorrect
5122. Private Placements of Securities Issued by Members
Exemptions
The following Member Private Offerings are exempt from the requirements of this Rule:
(2) offerings of exempted securities, as defined in Section 3(a)12 of the Exchange Act;
(3) offerings made pursuant to Securities Act Rule 144A or SEC Regulation S;
(4) offerings in which a member acts primarily in a wholesaling capacity (i.e., it intends, as evidenced by a selling agreement, to sell through its affiliate broker-dealers, less than 20% of the securities in the offering);
(5) offerings of exempt securities with short term maturities under Section 3(a)(3) of the Securities Act;
(6) offerings of subordinated loans under SEA Rule 15c3-1, Appendix D (see NASD Notice to Members 02-32 (June 2002));