Term
| Day Trading Margin Minimum |
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Definition
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Term
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Definition
| ...handles customer disputes with firms |
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Term
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Definition
| ...handles member to member disputes |
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Term
| Rule 144 trading restrictions |
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Definition
1% of outstanding shares, or
average of the prior four weeks trading volume,
WHICHEVER IS GREATER. |
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Term
| Investment advertising filing rules |
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Definition
| 10 business days after first use. |
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Term
Customer Protection Rule 15-C-3-3
Monthly computation of reserve requirement must deposit? |
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Definition
| 105% of the computed amount |
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Term
Reg T Margin Calculations
Rehypothecation |
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Definition
| 140% of customers debit balance |
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Term
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Definition
| 2 days after settlement or 5 days |
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Term
| NASDAQ Bid decremented to zero, firm not using Automatic Quote Refresh, time limit to update quote and size? |
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Definition
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Term
| 144 filing exemption for trading limits - less than what every 90 days? |
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Definition
| 5,000 shares max value $50,000 |
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Term
| Rule 17-A-5 (Records retention) |
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Definition
6 years
Cash rects and disbursements
purchase and sales
securities recv and deliver
General ledger
Customer accounts
securities record
Three years
fails to recv and deliver
customer communications |
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Term
| Certificate of Incumbency appointing guardian over an incompetent becomes void if no action taken by Guardian in how many days? |
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Definition
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Term
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Definition
| A NASDAQ Level Two quote condition where the BID and ASK are the same. |
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Term
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Definition
| A NASDAQ Level Two quote condition where the inside BID is HIGHER than the inside ASK. |
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Term
| "investment letter" sales of restricted securities is? |
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Definition
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Term
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Definition
| A “well known seasoned issuer” (a “WKSI”) may file an automatic shelf registration statement with the Securities and Exchange Commission (“SEC”) on Form S‑3 ASR |
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Term
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Definition
| A “well known seasoned issuer” (a “WKSI”) may file an automatic shelf registration statement with the Securities and Exchange Commission (“SEC”) on Form S‑3 ASR |
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Term
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Definition
ACT = "Automated Confirmation of Transactions" service
FINRA also refers to ACT as the Trade Reporting Facility (TRF). |
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Term
FINRA Uniform Practice Code
Fail to deliver between member firms |
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Definition
| After settlement, written notice of buy in can be tendered, contra firm has two days to respond, buy in can occur S+3. |
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Term
Customer Protection Rule 15-C-3-3
Failure to deliver |
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Definition
Buy in after S+10
Settlement plus 10 days |
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Term
| Initial Margin Calls can be satisfied with? |
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Definition
Cash @ 100%
Corp bonds @ 50%
Government bonds @ 95%
Municipals @ either 7% of face or 15% of market value.
Options CANNOT be used. |
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Term
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Definition
| Computer Assisted Execution System (CAES) the OTC Third Market Maker system. |
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Term
| Interest on bond purchases |
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Definition
Corp = 30 / 360, T+3 s/d
Interest due thru but not including sd |
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Term
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Definition
| Dynamically track inside market |
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Term
| Margin call (Reg T) extensions requested from? |
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Definition
FINRA
3 business day 1st extension
extraordinary circumstances can grant second extension |
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Term
| Corespondent Firms are used for clearing by? |
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Definition
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Term
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Definition
| Govern Customer-dealer relations |
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Term
| FINRA Uniform Practice Code |
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Definition
| Governs conduct between members |
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Term
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Definition
| Is used to resolve complaints regarding rules violations. |
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Term
| Firm commitment underwriting agreement is usually signed when? |
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Definition
| Just prior to the effective date. |
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Term
| Net Capital Requirements for Market Maker |
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Definition
Max $1,000,000
$1,000 for @ position under $5
$2,500 for @ position over $5 |
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Term
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Definition
Max 250.00 per election if can vote for person
OK more if retiring debt after loss
OK more if not negotiated. |
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Term
| The FINRA Uniform Practice Committee handles? |
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Definition
| Member to member disputes, NOT customer disputes. |
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Term
| Alternative Net Capital Formula |
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Definition
Minimum $250,000 at all times,
No less than 2% of debits in the Customer Reserve Account Formula |
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Term
| FINRA members may partner with non-members in what kinds of domestic underwriting? |
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Definition
Municipal and Government Bonds.
FINRA has NO jurisdiction over exempt securities. |
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Term
| The FINRA / NASD 5% Rule requires? |
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Definition
Must be from current "inside" market
Markups from the inside or lowest ASK
Markdowns from the inside or highest BID |
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Term
| SEC Notifications - termination of CPA - method and time limits? |
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Definition
| Must notify SEC and FINRA electronically within 15 days. |
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Term
| FINRA rules for firm financial disclosure to bonafide customers. |
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Definition
| Must provide, on request, latest balance sheet or statement of financial condition. |
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Term
| What stocks are ALWAYS marginable? |
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Definition
NASDAQ Global Markets and all exchange listed stocks.
Also stocks currently on the Federal Reserve "over the counter margin list". |
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Term
Regulation M
Anti-manipulation Rules Concerning Securities Offerings
No Market
Stabilization, permitted?
Passive market making, permitted? |
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Definition
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Term
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Definition
No affect on new purchases
May withdraw up to maintenance limits. |
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Term
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Definition
No more than 5 million in 1 year
unlimited number of AI and 35 non AI, non sophisticated investors
restricted securities are issued and no advertising permited |
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Term
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Definition
Non NASDAQ = 100 shares unless otherwise noted
OTCBB is higher unless lower than $1.00
1.01 - 10.00 = 500 shares
10.01 - 100.00 = 200 shares
100.01 - 200.00 = 100 shares
Greater than $200 - not tested. |
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Term
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Definition
| Not separately licensed, supervises based on member's instructions. NOT the OSJ. |
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Term
| FINRA Rule 5130 IPO distribution covers? |
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Definition
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Term
FINRA Conduct Rules
Fail to deliver time limits |
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Definition
| Prohibits selling if there is a 'fail to deliver' over 60 days old (90 days if security is a foreign issue.) |
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Term
| ADF - Alternate Display Facility |
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Definition
| The Alternative Display Facility (ADF) is an SRO display only facility that is operated by FINRA. The ADF provides members with a facility for the display of quotations, the reporting of trades, and the comparison of trades. As of March 5, 2007, CQS listed securities, as well as Nasdaq-listed securities are eligible for posting quotations through the ADF. ADF best bid and offer and trade reports are included in the consolidated data stream for Nasdaq and CQS listed securities. |
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Term
| FINRA customer disputes are handled by? |
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Definition
| The District Hearing Panel |
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Term
| Advantages of a S3 ASR versus S3? |
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Definition
| There are two significant advantages of using an automatic shelf registration statement, as opposed to a regular non‑WSKI Form S‑3 shelf registration statement. First, as the name indicates, a Form S‑3ASR registration statement becomes effective automatically upon filing, without review by the SEC. Accordingly, after filing a Form S‑3ASR with a “universal” prospectus, an issuer can, promptly thereafter, file a prospectus supplement indicating the amount, and describing the features, of the securities that it wishes to “take off the shelf”, and then commence to sell those securities immediately upon the filing the prospectus supplement. Second, as a WKSI, the issuer is not required to register a specified dollar amount of securities at the time of filing the Form S‑3ASR; and it may postpone the payment of the filing fee until the time of filing the prospectus supplement for each shelf take-down (called “pay as you go”). |
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Term
NASDAQ Market Center
Hours for Quotes and Order Entry |
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Definition
Total hours 7AM ET to 8PM ET
Normal Market 9:30 ET to 4:00 PM ET |
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Term
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Definition
Trade Reporting and Compliance Engine
A FINRA trade reporting system for ALL bonds, including both convertible and non-convertible bonds. |
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Term
| ITS - Intermarket Trading Systems |
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Definition
| Trades in listed stocks between exchange specialists on other exchanges and between specialists and Third Market Makers. Do not confuse with Computer Assisted Execution System (CAES) the OTC Third Market Maker system. |
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Term
| Uniform Practice Code written notice of buy in no later than noon how many business days in advance of proposed buy in? |
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Definition
| Two business days, with buy in the third day. |
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Term
| OTC Transactions reportable thru ACT? ACT = "Automated Confirmation of Transactions" service FINRA also refers to ACT as the Trade Reporting Facility (TRF). |
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Definition
Virtually all OTC trades. Remember, NON-convertible bonds do NOT trade OTC.
Trade Reporting and Compliance Engine (TRACE) is the FINRA separate trade reporting system for ALL bonds, including both convertible and non-convertible bonds.
ACT / TRF is only OTC transactions. |
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Term
The Uniform Net Capital Rule
A full disclosed BD that neither receives nor holds customer securities, can participate in underwriting when? |
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Definition
When minimum net capital of $5,000 is maintained
Best efforts or All or Nothing underwriting only
Monies payable to escrow agent and promptly remitted
Otherwise, members of selling groups need $50,000 minimum capital
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Term
| Net Capital - allowable assets |
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Definition
Cash on hand
fails to deliver
customer debits |
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Term
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Definition
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Term
| 12-b-1 termination requires... |
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Definition
either majority vote of shareholders, or
majority vote of "uninterested" directors |
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Term
| FINRA/NASD rules are enforced by? |
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Definition
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Term
| FINRA firm's business continuity plan is? |
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Definition
| Stored at a secure backup location outside the firm. |
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Term
| DK notices must be responded to in? |
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Definition
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Term
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Definition
| NASDAQ issues listed in the ADF |
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Term
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Definition
| SEC Regulation that covers required disclosures to be made by the maker of a tender offer. |
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Term
| A market peg order to buy... |
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Definition
| ...dynamically tracks the national best offer. |
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Term
| An INDIVIDUAL portfolio margin account minimums are... |
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Definition
| $100,000 equity and approved for naked options. |
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Term
| Temporary subordination agreements cannot exceed? |
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Definition
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Term
| Reg M's Rule 104 allows stabilizing bids ONLY |
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Definition
if an independent market exists, and
are identified as such. |
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Term
| 144a transactions are executed through what system? |
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Definition
The PORTAL Network,
An electronic trading system for Qualified Institutional Buyers (QIB) . |
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Term
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Definition
| allows QIBs to purchase large blocks of private placements via the PORTAL system. |
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Term
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Definition
| Qualified Institutional Buyer - uses the PORTAL system to buy very large blocks (min $500,000) of private placements. |
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Term
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Definition
| 3 year blanket registration. |
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