Stock Transfer Agent vs Registrar Quiz

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Why does the Investment Company Act of 1940 require mutual funds to have a significant percentage of its directors be disinterested?

To ensure that the funds are managed properly

To encourage competition among fund managers

To prevent conflicts of interest and protect shareholders (correct)

To maximize profits for the directors

What is the purpose of information barriers within a broker-dealer?

To promote transparency within the organization

To encourage the sharing of non-public information

To limit the spread of non-public information (correct)

To facilitate insider trading

What is the main role of a FINRA member?

To be a part of a national securities exchange (correct)

To conduct business with state regulators

To regulate securities laws

To manage mutual funds

When must an investment adviser register with the SEC according to the text?

If its assets under management exceed $110 million Signup and view all the answers

What does an investment adviser with AUM of $100 million up to $110 million have the option to do?

Decide whether to register with the state or the SEC Signup and view all the answers

What organization is responsible for updating the states' securities laws (Blue Sky Laws)?

The North American Securities Administrators Association (NASAA) Signup and view all the answers

What is the responsibility of a transfer agent?

Maintaining a list of shareholders and their contact information Signup and view all the answers

What does a broker-dealer do when acting in an agency capacity?

Selling a security to an investor Signup and view all the answers

In what capacity does a firm charge a markup on a stock transaction?

Dealer (principal) capacity Signup and view all the answers

What does a market maker do when providing liquidity?

Consistently buying and selling securities Signup and view all the answers

What information is conveyed in a market maker's quote: 7.10 – 7.15, 20 x 10?

Bid and ask prices with trading volume Signup and view all the answers

What qualification deems a married couple as accredited investors?

$1,000,000 net worth excluding primary residence Signup and view all the answers

What is the limit to the percentage of returns registered representatives can share if they invested 30% in a joint account with a customer?

30% Signup and view all the answers

What is an example of a violation referred to as freeriding?

Using the proceeds of a sale to pay for the purchase Signup and view all the answers

Who is prohibited from using the proceeds of a short sale to pay for another stock purchase?

Customers Signup and view all the answers

What restriction do FINRA member firms have regarding purchasing equity IPOs?

They are restricted from purchasing equity IPOs for immediate family members Signup and view all the answers

In the context of insider trading, who would be considered to have violated laws if material, non-public information (MNPI) is posted by a government official on an online bulletin board?

Both the government official and the person executing trades Signup and view all the answers

Stock Transfer Agent vs Registrar Quiz

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