Wiley FINRA Series 10 Exam Review 2017

About the Series 10 Exam xi About This Book xv About the Test Bank xvii About the Securities Institute of America xix Chapter 1 Supervision of Brokerage Office Personnel and Procedures 1 Hiring New Employees 1 Resignation of a Registered Representative 3 Registration Exemptions 4 Foreign Broker Dealers 5 Compensation Paid to Unregistered Persons 5 Retiring Representatives/Continuing Commissions 6 Persons Ineligible to Register 6 Disciplinary Actions Against a Registered Representative 7 Termination for Cause 8 Outside Employment 9 Private Securities Transactions 9 Gift Rule 9 Communications with the Public 10 FINRA Rule 2210 Communications with the Public 11 Broker Dealer Websites 14 Sharing in a Customer s Account 15 Borrowing and Lending Money 15 Order Tickets 16 Executing an Order 16 Becoming a Stockholder 17 Accrued Interest 22 Close Outs 23 Customer Confirmations 23 Rules for Good Delivery 24 Delivery of Round Lots 25 Delivery of Bond Certificates 26 Rejection of Delivery 26 Reclamation 27 Marking to the Market 27 Customer Account Statements 27 Carrying of Customer Accounts 28 Dividend Distribution 29 Proxies 32 Box Counts 32 Missing and Lost Securities 33 The Customer Protection Rule 34 Broker Dealer Books and Records 35 Pretest 41 Chapter 2 General Supervision and Customer Recommendations 45 The Role of the Principal 45 Supervisor Qualifications and Prerequisites 46 Continuing Education 47 Tape Recording Employees 49 Heightened Supervisory Requirements 50 Information Obtained from an Issuer 50 Customer Complaints 50 Mediation 51 Code of Arbitration 52 Investor Information 54 Member Offices 54 Business Continuity Plan 58 Recommendations to Customers 59 Research Reports 68 Recommendations through Social Media 71 Regulation FD (Fair Disclosure) 72 The Insider Trading & Securities Fraud Enforcement Act of 1988 73 Firewall 74 Pretest 75 Chapter 3 Supervision of Customer Accounts 77 Opening a New Account 77 Holding Securities 79 The Depository Trust Company (DTC) 80 Mailing Instructions 81 Types of Accounts 81 Trading Authorization 84 Retirement Plans 88 Accounts for Employees of Other Broker Dealers 101 Numbered Accounts 102 Prime Brokerage Accounts 102 Account Transfers 102 Margin Accounts 104 Special Memorandum Account (SMA) for a Long Margin Account 111 Wrap Accounts 121 Regulation S-P 121 Identity Theft 122 Currency Transactions 123 The Patriot Act 123 Isolated Sales Account 125 Securities Investor Protection Corporation Act of 1970 (SIPC) 125 Health Savings Accounts 126 The Department of Labor Fiduciary Rules 127 The Penny Stock Cold Call Rule 127 Pretest 129 Chapter 4 Sales Supervision of New Issues 133 The Securities Act of 1933 133 Freeriding and Withholding/FINRA Rule 5130 137 Underwriting Corporate Securities 139 Exempt Securities 143 Exempt Transactions 144 Rule 137 Nonparticipants 151 Rule 138 Nonequivalent Securities 151 Rule 139 Issuing Research Reports 151 Rule 415 Shelf Registration 152 Regulation M, Rule 104 153 Underwriting Direct Participation Programs 155 Investment Company Registration 155 Mutual Fund Distribution 156 Pretest 163 Chapter 5 Supervision of the Secondary Market 167 The Securities Exchange Act of 1934 167 Listing Requirements for the NYSE 172 Types of Orders 175 The Exchanges 178 Priority of Exchange Orders 179 Limit Up Limit Down (LULD) 193 The Nasdaq Market 194 Pink OTC Market 205 Trade Reporting and Comparison Service (TRACS) 205 Advanced Computerized Execution System (ACES) 206 The Order Audit Trail System (OATS) 206 Electronic Communication Networks (ECNs) 207 Direct Market Access 208 Rogue Trading Prevention 209 Third Market 209 Nasdaq Market Center for Listed Securities 209 Fourth Market 210 SEC Regulation ATS 210 FINRA 5% Markup Policy 211 Markups and Markdowns When Acting as a Principal 212 Riskless Principal Transactions 213 Proceeds Transactions 213 Dominated and Controlled Markets 213 ACT/TRF Trade Scan 214 Pretest 219 Chapter 6 MSRB Rules and Regulations 223 Municipal Bonds 223 Issuing Municipal Securities 224 Municipal Fund Securities 235 Variable Rate Securities 236 Municipal Bond Trading 236 Recommending Municipal Bonds 242 Municipal Bond Advertising 242 Municipal Bond Insurance 242 Political Contributions 243 Registration Requirements for Municipal Securities Professionals 245 MSRB Overview 246 Pretest 251 Answer KeyS 255 Glossary of Exam Terms 261 Index 327