Term
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Definition
| Dictates carrying firms must count all securities held at least quarterly. |
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Definition
| Created the Securities Information Center (SIC). Maintains records of lost, counterfeit, missing, or stolen securities. |
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Definition
- Articles of Incorporation
- Minute books
- Stock certificate books
- Organizational documents |
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Definition
| Exemption (Securities Act of '33) from registration small public offerings issued during a 12-month period. $5 million max and no more than $1.5 million per affiliate. |
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Definition
| Intrastate offerings 80-80-80 rule. 80% of issuer's assets, revenue, and proceeds must be instate. 100% must be sold to instate residents. |
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Term
When must Form 147 be filed?
And to whom? |
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Definition
10 business days prior to effective date of the offering.
Filed with the SEC. |
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Term
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Definition
| Part of Reg D. It is a private placement where the amount to be sold does not exceed $5 million. |
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Term
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Definition
| Part of Reg D. Private placement with no limit on the amount being sold. |
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Term
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Definition
| Exempts registration of certain corporate reorgs. They are: stock splits, stock dividends, and changes in par value. |
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Term
| What corporate reorgs have to register under SEC Rule 145? |
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Definition
| In general, mergers where additional or new shares are issued. |
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Term
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Definition
| Qualified Institutional Buyers |
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Term
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Definition
| Fair Disclosure. Requires issuers to disclose material information publicly. |
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Term
| According to Rule 605 when must a market center release a report showing execution quality? |
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Definition
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Term
| What is a preference order? |
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Definition
| Orders sent to a specific market participant at the inside market. |
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Term
| What happens if a DMM receives a preferenced order and they are not at the inside market? |
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Definition
| Order is returned to entering party. |
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Term
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Definition
| FRB regulation that governs loans by banks to BDs for the purchase of securities. Also covers loans from banks to customers. |
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Term
| How often must information on customer complaints be electronically filed with FINRA? |
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Definition
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Term
| Offering at the market refers to a distribution in which the price to the public on the offering date is set when? |
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Definition
| More than once during the day. |
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Term
| Under SEC rules, the haircut on a thinly traded, OTC Equity Security is? |
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Definition
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Term
| How much can a controlling member firm can be fined in a criminal action for insider trading? |
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Definition
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Term
| When officers sign the financial statements they are certifying they reviewed the internal controls for how many previous days? What dictates This? |
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Definition
90 days.
Sarbanes-Oxley Act of 2002. |
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Term
| Routine changes to a U-4 form should be made within how many days? |
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Definition
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Term
| How often, according to FINRA Rule 4370, business continuity plans should be reviewed? |
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Definition
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Term
| How often should surety bond cover should be reviewed? |
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Definition
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Term
| How often should Focus IIA reports be filed? |
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Definition
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Term
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Definition
| Electronic Communications Network. Trading system that disseminates to third party orders. ECNs are agency BDs. |
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Term
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Definition
| Nonattributable orders/quotes (anonymous). |
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Term
| What does the .T modifier signify? |
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Definition
| The trade was done outside of normal market hours. |
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Term
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Definition
| Requirement that BDs disclose order routing information on their nondirected customer orders. |
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Term
| What does Reg SHO deal with? |
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Definition
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Term
| How soon must an underwriting syndicate close its books after the settlement date? |
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Definition
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Term
| Clearing firms need to provide their exception reports by what date? |
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Definition
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Term
| To register as a non-Nasdaq market maker, when should Form 211 be filed? And with whom? |
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Definition
3 days prior to quotation entry.
Filed with FINRA. |
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Term
| Act that dictates BDs develop internal policies, procedures, and controls to ensure that anti-money laundering compliance. |
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Definition
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Term
| Securities acquired in a standby arrangement are locked for how long? |
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Definition
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Term
| How many years should a member firm maintain records of currency transactions of $10,000 or more? What dictates this? |
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Definition
5 years.
Bank Secrecy Act. |
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Term
| What is a threshold security? |
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Definition
| Any equity security where, for five consecutive settlement days, there are fails to deliver or 10,000 shares or more. The level of fails is equal to at least 1/2 of 1% of the issue's total shares outstanding. |
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Term
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Definition
| Order Audit Trail System. System used to conduct surveillance and enforce FINRA rules. Reports must be submitted daily. |
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Term
| How long must customer complaints be kept? |
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Definition
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Term
| How often do customer need to be notified of free credit balances? |
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Definition
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Term
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Definition
| Carries customer accounts and accepts funds and securities from customer. Larger firms (typically self-clearing). Net capital requirement is $250,000 or 6 2/3% of AI, whichever is greater. |
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Term
| What is an introducing firm? |
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Definition
| Also known as fully disclosed firms. One that introduces customers to clearing firms. Net capital requirement is $5,000 to $50,000 depending on business structure. |
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Term
| What are the net capital requirements for market makers? |
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Definition
Minimum of $100,000 with a maximum of $1 million. For each stock the firms makes a market:
1. Bid price $5 or less = $1,000 per security.
2. Bid price $5 or more = $2,500 per security. |
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Term
| What is a dealer? What is their net capital requirement? |
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Definition
Any member that writes OTC options or effects more than 10 transactions per year in its own account.
$100,000 net capital requirement. |
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Term
| Net capital requirement for a member offering only mutual funds. |
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Definition
| It can be either $5,000 or $25,000. For firms that sell on subscription it is $5,000. If they accept wires it's $25,000. |
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Term
| Rule 2711 imposes a quiet period of how many days for IPOs. How many days for additional issue offering? |
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Definition
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Term
| Member firms that are required to must provide written reports about RR telemarketing to FINRA how often? |
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Definition
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Term
| How long do exception reports need to be maintained? |
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Definition
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Term
| What is a short swing profit? |
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Definition
| An insider realizing a profit within a six month period from trading their own company's stock. Profit must be returned to the company. |
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Term
| Under Hart-Scott-Rodino what is the waiting period after filing a pre-merger notification? |
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Definition
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Term
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Definition
| Known as the Customer Protection Rule, concerned with the care and safekeeping of securities. |
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Term
| If a member's fidelity bond is modified when does FINRA need to be notified? |
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Definition
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Term
| How long do tender offers stay open? What about if the offer is amended? |
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Definition
Offer must be open for 20 days.
Must remain open for an additional 10 days of the offer is amended. |
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Term
| How often do trial balances need to be prepared? |
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Definition
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Term
| What is a block of stock? What rule? |
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Definition
Block is 10,000 shares or $200,000 or more.
NYSE Rule 127. |
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Term
| Under the Code of Procedure, a prehearing conference must be held within how many days of receipt of the respondent's answer to the complaint? |
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Definition
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Term
| Copies of temporary subordinated loan agreements must be filed with FINRA when? |
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Definition
| 10 days prior to the effective date. |
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Term
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Definition
| Requires that if the accountant or the broker/dealer terminates the association, the SEC and FINRA must be notified within 15 business days. |
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Term
| When are retail communications for Direct Participation Programs filed (for established firms)? |
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Definition
| Filed within 10 days of first use. |
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Term
| If a securities broker/dealer registered with FINRA wishes to merge with another member, FINRA must be notified when? |
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Definition
| At least 30 days prior to the closing date. |
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Term
| An issuer with assistance from its placement agent sells unregistered securities under the exemption provisions of Regulation D. If the entire issue is sold immediately, reports of sales on Form D must be made to the SEC within how many days of the first sale? |
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Definition
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Term
| Under SEC rules, when should Form 8-K must be filed? |
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Definition
| Within 4 business days of the event. |
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Term
| Within how many days of a suspicious transaction must an SAR be filed? |
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Definition
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Term
| A member firm must compute its fidelity bonding insurance requirement based on its... |
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Definition
| Highest required net capital over the preceding 12 months. |
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Term
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Definition
| Enacted to standardize the reporting of financial and nonfinancial information to the SEC. |
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Term
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Definition
| An SEC Regulation covering privacy rules. A BD must provide customer with a notice of its privacy policies and practices and must not disclose nonpublic personal information. |
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Term
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Definition
| FRB Reg that requires margin credit obtained outside of the US to purchase securities of a US issuer be in compliance with Reg T. |
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Term
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Definition
| Advanced Computerized Execution System. A Nasdaq subscription service that allows order entry firms to route orders to their preference market maker's internal trading systems for execution. |
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Term
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Definition
| Consolidated Quotation System provides bid/ask with size for listed equity options. Provides quotes from both third-market makers and DMMS. Operates 9:00 AM to 6:30 PM ET. |
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Term
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Definition
| Consolidated Tape System. Reports real-time trade info on listed equity securities. All trades in any market are reported. |
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Term
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Definition
| OTC Reporting Facility. Service provided by FINRA that accommodates reporting for OTC executed other than on an exchange. Includes restricted equities effected under Rule 144A. |
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Term
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Definition
| Allows nonregistered foreign and domestic securities to be sold to certain qualified institutional investors in the US, without holding period requirements. |
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Term
| Under SEC rules, when is a selling group is formed? |
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Definition
| After the filing of the registration statement. |
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Term
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Definition
| Firm Quote Compliance System. Developed by FINRA to monitor member complaints regarding backing away. |
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Term
| When is a firm in early warning? |
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Definition
1. NC falls below 120% of it's minimum requirement.
2. AI:NC exceeds 12:1. |
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Term
| When must a FOCUS report be filed? |
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Definition
| Within 60 days of year-end date. |
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