Questions and Answers
Which of the following statements is TRUE concerning the posting of bonds by a broker-dealer? (Select all that apply)
For how long does a broker-dealer that is part of the selling group need to make the prospectus available to investors?
Which of the following actions would violate the NASAA Statement of Policy on Dishonest and Unethical Business Practices of Broker-Dealers and Agents?
Which of the following statements is/are NOT TRUE concerning a broker-dealer or investment adviser filing an application for registration as a successor firm?
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Under the USA, which of the following transactions would NOT be considered exempt?
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Study Notes
Bond Requirements for Broker-Dealers
- Broker-dealers are required to post bonds if they have custody of or discretionary authority over client funds or securities.
- No bond requirement exists for broker-dealers without custody or discretionary authority.
- A broker-dealer’s bond requirement might be waived if their net capital exceeds a certain limit as determined by the Administrator.
Prospectus Availability for IPOs
- Broker-dealers in the selling group of an IPO must provide a prospectus for 25 days after the effective date.
- This rule applies to securities listed on national exchanges like Nasdaq.
- Obligations for secondary offerings vary: 40 days for OTC trades and 90 days for IPOs.
Violations of NASAA Policy
- Creating a marketing brochure that presents only positive aspects from the prospectus is misleading and violates NASAA policy.
- Broker-dealers can charge higher commissions if disclosed and may execute margin transactions if a signed agreement is obtained promptly.
- Agents can open joint accounts with clients when they have written permission from their employer and the client.
Successor Firm Registration Under the Uniform Securities Act
- An application for registration as a successor firm does not require the firm to have existed prior to application.
- A successor firm's registration is effective for the rest of the year after the application is filed.
- No filing fee is necessary for a successor firm’s registration application to be effective.
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Description
Prepare for the Series 63 Exam with these flashcards focusing on key concepts regarding broker-dealer bond requirements. Test your knowledge on various statements related to bond postings and the role of the Administrator. Perfect for those studying for their final exams in securities regulation.
