STC Series 7 Chapter 14 Practice
Exam 2025 With 100% Correct
Answers
A registered representative (RR) has changed broker-dealers. The RR is in the process of
implementing the Automated Customer Account Transfer Service (ACATS) for all of the clients
he has done business with over the past five years. The previous employer may NOT take which
of the following actions?
A. Attempt to convince the clients to remain with the firm
B. Refuse to transfer positions in proprietary mutual funds
C. Accept an order from a client to liquidate her entire account
D. Execute the balance of a partially executed GTC order in a validated account**** - CORRECT
ANSWER✔✔There is always tension when an RR leaves a firm. The representative considers the
clients to be his, while the former employer thinks the clients belong to the firm. Once the
carrying firm (the prior employer) receives written transfer instructions, it must cancel all open
orders and freeze the account. It may not accept new orders or complete a partially executed
order. The carrying firm may take exception to the transfer instructions only for specific reasons,
such as no record of the account exists, incomplete transfer instructions, or improperly signed
documents. The former employer may attempt to convince clients to remain with the firm and,
in some cases, may refuse to transfer certain positions that are proprietary. Firm-specific or
proprietary products, such as mutual funds or annuities, are considered nontransferable assets.
Accepting an order from a client to liquidate her entire account is complicated. Clients may call
the firm and ask for a liquidation assuming ACATS has not yet been implemented.
A client has requested that his account be transferred to another firm. If the request is
validated, the account must be transferred within:
A. Three business days****
B. One business day
C. Three calendar days
Exam 2025 With 100% Correct
Answers
A registered representative (RR) has changed broker-dealers. The RR is in the process of
implementing the Automated Customer Account Transfer Service (ACATS) for all of the clients
he has done business with over the past five years. The previous employer may NOT take which
of the following actions?
A. Attempt to convince the clients to remain with the firm
B. Refuse to transfer positions in proprietary mutual funds
C. Accept an order from a client to liquidate her entire account
D. Execute the balance of a partially executed GTC order in a validated account**** - CORRECT
ANSWER✔✔There is always tension when an RR leaves a firm. The representative considers the
clients to be his, while the former employer thinks the clients belong to the firm. Once the
carrying firm (the prior employer) receives written transfer instructions, it must cancel all open
orders and freeze the account. It may not accept new orders or complete a partially executed
order. The carrying firm may take exception to the transfer instructions only for specific reasons,
such as no record of the account exists, incomplete transfer instructions, or improperly signed
documents. The former employer may attempt to convince clients to remain with the firm and,
in some cases, may refuse to transfer certain positions that are proprietary. Firm-specific or
proprietary products, such as mutual funds or annuities, are considered nontransferable assets.
Accepting an order from a client to liquidate her entire account is complicated. Clients may call
the firm and ask for a liquidation assuming ACATS has not yet been implemented.
A client has requested that his account be transferred to another firm. If the request is
validated, the account must be transferred within:
A. Three business days****
B. One business day
C. Three calendar days
