Registration by Coordination - ANSWER The most common form of registration for
securities that are not federal covered. Coordination is concurrent registration with the SEC
and the state for public offerings.
Commingling of customer and firm assets - ANSWER When maintaining custody of
customer securities, broker-dealers must keep them segregated from the firm's holdings and
may not make use of them. There is an exception if these are securities pledged as collateral
in a margin account, but, unless the question specified that (and it probably won't on your
exam), assume these are fully paid for.
No place of business registration will not be required to register if one of its clients was ? -
ANSWER 1. Other BD
2. Bank
3. Savings Institution
4. Trust Companies
5. Insurance Companies
6. Investment Companies
7. Employee benefit plans with assets of at least $1mm
Examining of books requires how much notice from an admin? - ANSWER none
It is unlawful to offer or sell any security in a state unless: - ANSWER 1. it is registered
2. is exempt
3. is a federal covered security
1
, What falls under the USA's anti-fraud provision apply to what and what only. - ANSWER
All securities
Agency Cross Transaction acts as agent for both parties and ? - ANSWER 1. An advisory
client must provide prior written consent
2. Adviser must make written disclosure to the advisory client that it will broker dealer for,
have potential conflicts of interest
4. May collect commissions from both parties
In an agency cross transaction, an agent may not do? - ANSWER May not recommend the
transaction to both parties
An exempt security is only exempt from the registration requirements, not ? - ANSWER 1.
Anti-fraud provisions and
2. Civil liability
Executing a transaction on behalf of a customer without authorization to do so. Unless
discretionary authorization has been received means? - ANSWER broker dealers and their
agents may never enter an order for a client on their own volition, even when it is in the best
interest of the client
Under the National Securities Markets Improvement Act of 1996 (NSMIA), states are
prevented from - ANSWER 1. Establishing capital and custody requirements that exceed
those provided for in the Securities Exchange Act of 1934
2. Establishing recordkeeping requirements for broker-dealers or investment advisers that
exceed those required under federal securities law
Custody is - ANSWER maintaining possession of a customer's money/or securities. Must
update customer of trades every quarter
It is unalwful to have custody if? - ANSWER 1. Admin prohibits it
2
securities that are not federal covered. Coordination is concurrent registration with the SEC
and the state for public offerings.
Commingling of customer and firm assets - ANSWER When maintaining custody of
customer securities, broker-dealers must keep them segregated from the firm's holdings and
may not make use of them. There is an exception if these are securities pledged as collateral
in a margin account, but, unless the question specified that (and it probably won't on your
exam), assume these are fully paid for.
No place of business registration will not be required to register if one of its clients was ? -
ANSWER 1. Other BD
2. Bank
3. Savings Institution
4. Trust Companies
5. Insurance Companies
6. Investment Companies
7. Employee benefit plans with assets of at least $1mm
Examining of books requires how much notice from an admin? - ANSWER none
It is unlawful to offer or sell any security in a state unless: - ANSWER 1. it is registered
2. is exempt
3. is a federal covered security
1
, What falls under the USA's anti-fraud provision apply to what and what only. - ANSWER
All securities
Agency Cross Transaction acts as agent for both parties and ? - ANSWER 1. An advisory
client must provide prior written consent
2. Adviser must make written disclosure to the advisory client that it will broker dealer for,
have potential conflicts of interest
4. May collect commissions from both parties
In an agency cross transaction, an agent may not do? - ANSWER May not recommend the
transaction to both parties
An exempt security is only exempt from the registration requirements, not ? - ANSWER 1.
Anti-fraud provisions and
2. Civil liability
Executing a transaction on behalf of a customer without authorization to do so. Unless
discretionary authorization has been received means? - ANSWER broker dealers and their
agents may never enter an order for a client on their own volition, even when it is in the best
interest of the client
Under the National Securities Markets Improvement Act of 1996 (NSMIA), states are
prevented from - ANSWER 1. Establishing capital and custody requirements that exceed
those provided for in the Securities Exchange Act of 1934
2. Establishing recordkeeping requirements for broker-dealers or investment advisers that
exceed those required under federal securities law
Custody is - ANSWER maintaining possession of a customer's money/or securities. Must
update customer of trades every quarter
It is unalwful to have custody if? - ANSWER 1. Admin prohibits it
2
