what are registered persons required to participate in? continuing education programs CE requirement components a firm element Firm element requires member firms to prepare an annual training plan taking into account such factors as recent regulatory developments, the scope of the member's business activities, the performance of its personnel in the regulatory element, and its supervisory needs regulatory element Requires that all registered persons complete a computer-based training session within 120 days of the person's second registration anniversary and every three years thereafter. passive investment -a purchase of a limited partnership unit, is not considered an outside business activity The conduct Rules define a private securities transaction as any sale of securities outside an associated person's regular business and her employing member Selling away The failure to provide a member firm with written notice of involvement in a private securities transaction by a person associated with the member. selling away without your firm's knowledge is a serious violation of the Conduct of Rules Registered representatives who have not completed their regulatory element training in the prescribed time frame will have their registrations deactivated by Financial Industry Regulatory Authority (FINRA) until the requirements of the program are met. If a person fails to complete the regulatory element within the prescribed time period, FINRA will deactivate that person's registration until the requirements of the program have been met. A registered representative has a customer who is interested in using options strategies such as spreads and straddles. The registered representative's firm does not offer options transactions as part of their existing business model. As such, the registered representative directs the customer to another broker-dealer that allows for option trading. This is an acceptable practice. A private securities transaction is any sale of securities outside an associated person's regular business and his employing member. Private securities transactions are also known as selling away. However, in this example, the representative simply directed the customer to a firm that could handle the customer's request. As long as the representative recieved no compensation for this activity, the recommendation to go to another firm does not violate any industry regulation. The regulatory element of training requires that all registered persons complete a computer-based training session how frequently? Within 120 days of the person's second registration anniversary and then every 3 years thereafter The regulatory element of training requires that all registered persons complete a computer-based training session within 120 days of the person's second registration anniversary and every three years thereafter (i.e., within 120 days of the person's 2nd, 5th, 8th, 11th registration anniversary, and so on). The rules to prevent pay to play regarding contributions made to political parties, candidates, and elected officials by firms involved in the underwriting or sales of municipal securities are enforced by Financial Industry Regulatory Authority (FINRA). Having no authority to enforce the rules it enacts, the MSRB relies on FINRA to enforce its municipal securities rules. This would include the enforcement of the pay to play or play for pay rules regarding political contributions. Firm element training requires member firms to prepare training how frequently? Annually Firm element requires member firms to prepare an annual training plan, taking into account such factors as recent regulatory developments, the scope of the member's business activities, employee performance in the regulatory element, and its supervisory needs. Associated persons who wish to enter into a private securities transaction for which they will receive no compensation must provide prior written notice to their employer. Associated persons who wish to enter into a private securities transaction must provide prior written notice to their employer. Approval is only required when compensation will be paid. All supervision for the transaction is the responsibility of the employing member and not the firm accommodating the transaction. A representative of a dealer who solicits municipal securities business from an official of an issuer contributes $275 to the official's city council reelection campaign during the general election. Under what circumstance would the contribution invoke a ban on the dealer's municipal securities business with that issuer? The dealer seeks to engage in a negotiated underwriting with the issuer. A representative of a dealer firm who gave any amount to the election campaign and then solicits a negotiated underwriting would likely cause a two-year ban on performing any work for that municipality. There are some exceptions. For example, if the representative lives in the municipality and is eligible to vote there, he may give up to $250 per election without triggering a ban. Underwriting the process of selecting, classifying, and pricing applicants for insurance Municipal securities Board established as an SRO to enact and interpret rules relating to the underwriting and trading of municipal securities; as well as advising municipal issuers, it should be noted that it also has rules to prevent pay to play-- MSRB Rule G-37 Continuing education requirements are a part of the securities industry's ongoing commitment to furthering the knowledge base for registered representatives. Which of the following CE requirements are needed by a registered rep? Blue-sky requirement Firm element training Regulatory element training Registered persons are required to participate in continuing education (CE) programs. The CE requirement has two components: a regulatory element and a firm element. Regulatory element requires that all registered persons complete a computer-based training session within 120 days of the person's second registration anniversary and every three years thereafter. Firm element requires member firms to prepare an annual training plan that takes into account such factors as recent regulatory developments, the scope of the member's business activities, the performance of its personnel in the regulatory element, and its supervisory needs. Failure to complete the regulatory element continuing education (CE) requirement within the allotted time period will result in the registration being deactivated until the requirements are met. Failure to complete the regulatory element within the allowable time frame will lead to FINRA's deactivating that person's registration until the CE regulatory element is met. All of the following statements about a home office are true except A) C) Broker-dealers often allow registered representatives to operate a home office. Approval of the member firm and registration of the location with its self-regulatory organization (SRO) is required as it would be for any office associated with the broker-dealer. All normal business activities including opening new accounts and taking customer orders for the purchase and sale of securities would be permitted. Additionally, the home office address and telephone number may be advertised in any normal manner such as on business cards or through various media venues like newspapers and websites. Rule G-37 MSRB rule prohibiting municipal securities dealers from underwriting securities issued under the authority of a public official to whom an associated person of the dealer has contributed money. Mary Alice McVey, a registered representative with a Financial Industry Regulatory Authority (FINRA) member broker-dealer, has recently remodeled her home and now has an area with a private entrance that she would like to use instead of commuting each day to her office 20 miles away. Under FINRA rules this would be permitted with FINRA's approval. FINRA rules provide for the ability of registered representatives to operate out of their residence in what is known as a home office. Approval from FINRA is required and the same rules that apply to any branch office would apply here. Gifts and gratuities directed to those who work at another firm may not be made by a member or associated person for amounts greater than $100 per individual per year. No member or associated person may give anything of value in excess of $100 per individual per year to any person, principal, employee, or representative of another person where such payment is in relation to the business of the employer of the recipient of the payment or gratuity. A municipal finance professional wants to make a political contribution to a candidate for mayor in the town that she resides in. Under the MSRB pay-to-play rule, a contribution to this candidate cannot exceed $250. Contributions of up to $250 per election are permitted to be made by municipal finance professionals (registered persons) eligible to vote for that official. Any sale of securities outside an associated person's or the employing member firm's regular business is recognized as a private securities transaction. The Conduct Rules define a private securities transaction, also known as selling away, as any sale of securities outside an associated person's regular business and her employing member. Each of the following activities would require prior written notification by an associated person to the employing broker-dealer except A) becoming a limited partner in an oil and gas drilling program. Passive investments, such as the purchase of a limited partnership interest, are not considered outside business activity. An associated person may make a passive investment for his own account without providing written notice to the employing broker-dealer. Regarding political contributions, limitations are place with the view to deter gaining political favor by employing what is commonly known as pay to play. The rule is designed to deter what is commonly called pay to play. It makes it unlawful for an adviser to receive compensation (fee) for providing advisory services to a government entity for a two-year period after the adviser makes a political contribution to a public official of a government entity. If a registered representative is involved in a securities transaction outside the scope of employment with the firm, a practice known as selling away and will receive compensation for it, which of the following must see that the representative is properly supervised for the transaction? The employing firm If a registered representative is to be compensated for a trade done through another firm, the employing firm must run the trade on its own books and see to it that the representative is properly supervised. The firm where the outside trade will take place is, of course, responsible only for the actions of its own registered representatives. How often must a representative complete the firm element continuing education (CE) requirement? Annually Firm element CEs are an annual requirement. Regulatory element CEs are required after the second anniversary and every three years thereafter. A broker-dealer firm managing an initial public offering (IPO) wishes to give a gift to an associated person of one of the selling group members. Which of the following would be an unacceptable gift under the rules? A $125 designer edition fountain pen and desk holder Financial Industry Regulatory Authority (FINRA) member firms may not give business-related compensation to associated persons of other firms - compensation directly tied to sales or promises of sales - but may give an individual gifts whose value does not exceed $100 in a 12-month period. Tickets to a sporting event or dinner at an expensive restaurant may exceed the $100 limit if it is occasional, someone from the rewarding firm is present, and the employing firm has given its permission. Reminder advertising, items with the broker-dealer's name and/or logo, may also exceed the $100 limit, within reason, because it has a business purpose. An investment company wishes to provide incentives for registered representatives of several broker-dealer firms to sell their investment products. The company proposes to send some selected representatives to a sales training seminar. Which of the following would be acceptable features of the trip? The venue of the seminar is a resort in the Canary Islands. There is an incidental tour the representatives may attend at their own expense. The representatives may bring their spouses, whose expenses will also be paid. The representatives must obtain their employing firms' permission to attend. There is an incidental tour the representatives may attend at their own expense. The representatives must obtain their employing firms' permission to attend. The trip itself is acceptable in principle, because it has a business purpose. Having it in the Canary Islands would be inappropriate. Side tours, outings, and so on are acceptable, provided the guests pay their own expenses for them. Paying the expenses of guests would be inappropriate as well. Permission of the employing firm to attend is always required. If a registered person fails to complete the regulatory element within the prescribed period, FINRA will deactivate that person's registration until the requirements of the program are met. Failure to complete the regulatory element within the prescribed time period will lead to FINRA deactivating that person's registration until the requirements of the program are met. The person may still have a role in the member's business, but it would be limited to those activities permitted to those not requiring registration. Joey, a registered representative for Seacoast Securities, Inc., has been approached by his close friend, Ross (who is a customer), to help him raise money for his anthropological research project. Ross wants Joey to introduce the program to his customers. If the customer invests in the program, they will receive a portion of any money earned with the sale of the research. The project is organized as a limited partnership, and Joey would receive payment for any investors he brings to the table. If Joey helps Ross and receives payment directly from him this is an example of selling away and is a rules violation. This is selling away, which is always considered a violation. The fact that the money is being raised for science is not relevant; the intent is to make a profit with the sale of the research. Receiving payment directly from the sponsor indicates the employer is not aware of the sale. Ron the representative is opening the branch's mail and finds a letter of complaint about a trade he entered. What should Ron do next? Forward the complaint to a principal. Ron must forward any complaints to principals. There are no alternate steps here. Make the boss aware just as quick as you can. Hudson is a representative for Saguaro Securities in Scottsdale, Arizona. During the months of May through September, Hudson operates his business from a summer home in Flagstaff. Which of these statements about his home office is false? A) The office must be separated from the residence and have its own entrance. There is no specific physical requirements for a home office. The home office is in every way treated as a branch, including regulatory and firm examinations. A municipal finance professional (MFP) would have duties including underwriting, sales, and trading of municipal bonds. An MFP is an associated person of a FINRA member firm engaged in municipal securities underwriting, trading, sales, financial advisory, research, investment advice, or any other activities that involve communication with public investors about municipal bonds. Municipal bonds are not issued by underwriters or securities industry personnel; they are issued by municipal governments. Representatives are required to take CE courses provided by their employer annually, and CE courses administered by FINRA on the second anniversary of licensing and every three years thereafter. Regulatory element CE, administered by FINRA, begins on the second anniversary from passing a top-off exam, and then every three years. A 120-day window opens on the anniversary date of passing the top-off exam and the CE must be completed within that 120 day window. Failure to do so will result in a deactivation of the license. From a regulator's standpoint, a complaint refers to which of these? Verbal or written Any aspect of customer service Written Any issue arising from a securities transaction Written, Any issue arising from a securities transaction Regulations only recognize written complaints that are related to securities transactions. Firms likely have different rules, but the regulators only see writing and do not see rudeness or things unrelated to a transaction as a complaint. Harold, a representative for Seacoast Securities, is soliciting candy sales for his kid's band camp fundraiser. What permissions does Harold need to do this? No permission is needed unless his firm has rules on this activity. The regulators do not care about this activity, but Seacoast may. This behavior may be annoying, but it is not illegal. Which of these statements regarding home-based offices is true? Home-based offices would not require FINRA approval. Home-based offices would require FINRA approval. Home-based offices would be subject to site visits by FINRA auditors. Home-based offices would not be subject to site visits by FINRA auditors. Home-based offices would require FINRA approval. Home-based offices would be subject to site visits by FINRA auditors. It does not matter if the office is home-based, also acting as the representative's personal residence; it is subject to the same approval and inspection requirements of a normal branch. Eddy is a representative for Saguaro Securities in Scottsdale, Arizona and wants to join the Maricopa County Sheriff's Department as a part-time reserve deputy. For his community service, he will receive a small payment to help defer the cost of his equipment. Before he does this, he needs to provide Saguaro with written notice. He must provide written notification, but does not need permission to proceed. Note that his employer may have stricter rules. Though this work is mostly volunteer, the small payment makes it a paid position. There is no requirement for Eddy to send a notice to a regulator. The portfolio manager of a pension plan is a well-known fan of the local football team. The branch manager of a FINRA member firm who has been trying to secure a portion of the plan's investment account owns a luxury box at the stadium. FINRA's Conduct Rules would permit the branch manager to invite the portfolio manager to accompany him to a game of his choice. A gift of tickets to a single game, even in a luxury box, would be permitted under the Conduct Rules; a gift of tickets for the season would not be. Any gift conditioned upon an explicit promise of future business is not permitted. An outing where a representative of the firm accompanies the guest would fall under the heading of normal business dealings. In that light the rule requiring that gifts be of no more than $100 in value is waived for any occasion considered to be normal business dealings. After working for several years as a retail sales manager, Marsha decided to seek employment at a FINRA member firm. Marsha was successful on her first attempt on the qualification exam and during her first three years as a registered representative she opened a number of accounts. During a market correction, her commission income fell and she decided to devote her time on weekends to a part-time retail sales position. Under FINRA, rules regarding outside business activity (OBA), Marsha must provide prior written notice to the employing member firm. Under FINRA's rules regarding outside business activity (OBA) prior written notice to, but not the permission of, the member firm Marsha represents is required. Seacoast Securities, Inc., a broker-dealer firm, has developed a series of ongoing education courses for its registered personnel. These courses cover various developments in the industry that are pertinent to Seacoast's business. Employees must complete the assigned courses in the year they are assigned. This is an example of firm-element continuing education. This is an example of the required firm-element CE. It is administered by the firm annually and is relevant to the firm's business. The regulatory element is administered by FINRA. The other names are fictional examples. Which of these are considered violations to the FINRA Conduct Rules? Engaging in a private securities transaction without compensation with an immediate family member without notification to the employing broker-dealer Parking a license for a former registered principal A registered representative accepting a complimentary registration and accommodations at a seminar presented by a mutual fund sponsor at an exclusive offshore island resort A member firm waiting 30 days after termination to provide the terminated employee with a copy of the Form U-5 Parking a license for a former registered principal A registered representative accepting a complimentary registration and accommodations at a seminar presented by a mutual fund sponsor at an exclusive offshore island resort Parking a license, regardless of the registration level, is a prohibited practice. Receiving a complimentary registration to a seminar produced by a mutual fund sponsor could be permitted, but it would have to be in a location that is considered appropriate to the purpose of the meeting. An offshore resort would not qualify. Notification is not required when a private securities transaction takes place with a member of the immediate family of the representative, as long as there is no compensation. An employer member has up to 30 days to deliver a copy of the Form U-5. |
What is not considered to be an outside business activity engaged in by an associated person quizlet?
zusammenhängende Posts
Urheberrechte © © 2024 paraquee Inc.
