| About the Series 24 Exam |
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xix | |
| About this Book |
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xxiii | |
| About the Test Bank |
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xxiv | |
| About the Securities Institute of America |
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xxv | |
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Chapter 1 Brokerage Office Procedures |
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1 | (30) |
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1 | (1) |
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Resignation of a Registered Representative |
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2 | (2) |
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4 | (1) |
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Persons Ineligible to Register |
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4 | (1) |
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Disciplinary Actions Against a Registered Representative |
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5 | (1) |
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6 | (1) |
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6 | (1) |
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Private Securities Transactions |
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7 | (1) |
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7 | (1) |
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Sharing in a Customer's Account |
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8 | (1) |
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Borrowing and Lending Money |
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9 | (1) |
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9 | (1) |
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10 | (1) |
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11 | (1) |
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12 | (1) |
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Clearly Erroneous Reports |
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12 | (1) |
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12 | (1) |
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Corporate and Municipal Securities Settlement Options |
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13 | (2) |
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15 | (1) |
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Government Securities Settlement Options |
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15 | (1) |
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16 | (1) |
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17 | (1) |
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17 | (2) |
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19 | (1) |
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20 | (1) |
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20 | (1) |
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Delivery of Bond Certificates |
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21 | (1) |
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21 | (1) |
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21 | (1) |
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Customer Account Statements |
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22 | (1) |
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Carrying of Customer Accounts |
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22 | (1) |
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23 | (4) |
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27 | (4) |
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Chapter 2 Record Keeping, Financial Requirements, and Reporting |
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31 | (28) |
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31 | (1) |
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32 | (1) |
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32 | (1) |
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Subsidiary (Secondary) Records |
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32 | (1) |
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Securities Position Book (Ledger) Stock Record |
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32 | (1) |
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33 | (1) |
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Confirmations and Notices |
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33 | (1) |
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Monthly Trial Balances and Net Capital Computations |
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33 | (1) |
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33 | (1) |
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Records Required to Be Maintained for Three Years |
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33 | (1) |
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Records Required to Be Maintained for Six Years |
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34 | (1) |
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Records Required to Be Maintained for the Life of the Firm |
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34 | (2) |
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Requirement to Prepare and Maintain Records Under SEC 17a-3 and 17a-4 |
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36 | (1) |
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37 | (3) |
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40 | (1) |
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40 | (2) |
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42 | (1) |
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Missing and Lost Securities |
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42 | (1) |
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The Customer Protection Rule |
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43 | (4) |
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47 | (1) |
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FINRA Financial Requirements |
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48 | (1) |
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49 | (1) |
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Temporary Subordination Agreements |
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50 | (1) |
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51 | (1) |
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51 | (2) |
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53 | (6) |
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Chapter 3 Issuing Corporate Securities |
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59 | (34) |
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60 | (1) |
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61 | (1) |
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61 | (1) |
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Providing the Prospectus to Aftermarket Purchasers |
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62 | (1) |
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62 | (1) |
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63 | (1) |
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63 | (1) |
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Free Riding and Withholding/FINRA Rule 5130 |
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64 | (1) |
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Underwriting Corporate Securities |
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65 | (1) |
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Types of Underwriting Commitments |
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66 | (2) |
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68 | (1) |
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68 | (1) |
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The Underwriting Syndicate |
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69 | (1) |
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69 | (1) |
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Underwriter's Compensation |
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69 | (1) |
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70 | (1) |
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Factors That Determine the Size of the Underwriting Spread |
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71 | (1) |
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Review of Underwriting Agreements by FINRA |
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71 | (1) |
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Underwriter's Compensation |
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71 | (1) |
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Unreasonable Compensation |
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72 | (1) |
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Offering of Securities by FINRA Members |
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73 | (1) |
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74 | (1) |
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75 | (6) |
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81 | (1) |
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Rule 147 Intrastate Offering |
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82 | (1) |
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83 | (1) |
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Rule 138 Nonequivalent Securities |
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83 | (1) |
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Rule 139 Issuing Research Reports |
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83 | (1) |
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Rule 415 Shelf Registration |
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84 | (1) |
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Securities Offering Reform Rules |
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85 | (1) |
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85 | (1) |
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Additional Communication Rules |
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86 | (1) |
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87 | (2) |
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89 | (4) |
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Chapter 4 Trading Securities |
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93 | (76) |
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93 | (4) |
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97 | (1) |
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Priority of Exchange Orders |
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98 | (1) |
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The Role of the Designated Market Maker |
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98 | (3) |
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101 | (1) |
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101 | (1) |
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Adjustments for Stock Splits |
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102 | (1) |
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103 | (1) |
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104 | (1) |
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104 | (1) |
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104 | (1) |
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Super Display Book (SDBK) |
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104 | (1) |
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105 | (1) |
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Affirmative Determination |
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105 | (1) |
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106 | (1) |
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Rule 200 Definitions and Order Marking |
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106 | (1) |
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Rule 203 Security Borrowing and Delivery Requirements |
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107 | (1) |
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108 | (1) |
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109 | (1) |
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110 | (1) |
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110 | (1) |
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Limit Up Limit Down (LULD) |
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111 | (1) |
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Listing Requirements for the NYSE |
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111 | (1) |
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Reading the Consolidated Tape |
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112 | (2) |
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114 | (1) |
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114 | (11) |
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High Frequency and Algorithmic Trading |
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125 | (2) |
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127 | (1) |
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128 | (1) |
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128 | (1) |
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129 | (2) |
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131 | (1) |
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131 | (1) |
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132 | (1) |
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132 | (1) |
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Nasdaq Market Center for Listed Securities |
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132 | (1) |
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133 | (1) |
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133 | (1) |
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Market Maker Regulations and Responsibilities |
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134 | (1) |
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Times for Entering a Quote |
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134 | (3) |
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137 | (1) |
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Handling and Displaying Customer Limit Orders |
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138 | (2) |
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The Order Audit Trail System (OATS) |
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140 | (1) |
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141 | (1) |
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Automated Confirmation System (ACT)/Trade Reporting Facility (TRF) |
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141 | (1) |
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142 | (1) |
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Nasdaq Trade Reporting Facility (TRF) |
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142 | (4) |
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146 | (1) |
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Market Making During Syndication |
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147 | (1) |
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147 | (1) |
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148 | (1) |
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148 | (1) |
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148 | (1) |
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Passive Market Makers' Daily Purchase Limit |
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149 | (1) |
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149 | (2) |
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Syndicate Short Positions |
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151 | (1) |
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151 | (1) |
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Trade Reporting and Compliance Engine (TRACE) |
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151 | (3) |
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154 | (1) |
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FINRA S Percent Markup Policy |
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154 | (1) |
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Markups/Markdowns When Acting as a Principal |
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155 | (1) |
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Riskless Principal Transactions |
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156 | (1) |
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157 | (1) |
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Dominated and Controlled Markets |
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157 | (1) |
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Net Transactions with Customers |
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158 | (1) |
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158 | (1) |
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The Firm Quote Compliance System (FQCS) |
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159 | (1) |
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Trade Complaints Between Members |
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159 | (1) |
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160 | (1) |
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160 | (3) |
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163 | (6) |
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Chapter 5 Recommendations to Customers |
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169 | (26) |
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170 | (2) |
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Capital Asset Pricing Model (CAPM) |
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172 | (1) |
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172 | (2) |
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174 | (1) |
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175 | (1) |
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Developing the Client Profile |
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175 | (1) |
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176 | (1) |
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Professional Conduct when Making Recommendations |
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177 | (1) |
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Recommending Mutual Funds |
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178 | (1) |
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179 | (1) |
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Mutual Fund Current Yield |
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179 | (1) |
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Fair Dealings with Customers |
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179 | (4) |
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Recommendations to an Institutional Customer |
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183 | (1) |
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Short Sales in Connection with Recommendations |
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184 | (1) |
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184 | (3) |
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187 | (1) |
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Recommendations through Social Media |
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187 | (4) |
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191 | (4) |
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Chapter 6 General Supervision |
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195 | (18) |
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The Role of the Principal |
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195 | (1) |
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Supervisor Qualifications and Prerequisites |
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196 | (1) |
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197 | (2) |
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199 | (1) |
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Heightened Supervisory Requirements |
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199 | (1) |
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Information Obtained from an Issuer |
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200 | (1) |
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200 | (1) |
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201 | (1) |
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201 | (2) |
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203 | (1) |
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204 | (1) |
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204 | (1) |
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205 | (1) |
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206 | (1) |
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206 | (1) |
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207 | (1) |
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FINRA Rules on Financial Exploitation of Seniors |
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207 | (2) |
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209 | (4) |
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Chapter 7 Customer Accounts |
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213 | (24) |
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215 | (1) |
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The Depository Trust Company (DTC) |
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216 | (1) |
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217 | (1) |
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217 | (1) |
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217 | (1) |
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Joint Tenants with Rights of Survivorship (JTWROS) |
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217 | (1) |
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Joint Tenants in Common (JTIC) |
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218 | (1) |
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218 | (1) |
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218 | (1) |
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219 | (1) |
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219 | (1) |
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220 | (1) |
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220 | (1) |
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Operating a Discretionary Account |
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220 | (1) |
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Managing Discretionary Accounts |
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221 | (1) |
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Third-Party and Fiduciary Accounts |
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221 | (2) |
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Uniform Gifts to Minors Act (UGMA) |
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223 | (2) |
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225 | (1) |
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Accounts for Employees of Other Broker Dealers |
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226 | (1) |
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226 | (1) |
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226 | (1) |
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227 | (1) |
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228 | (2) |
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Guaranteeing a Customer's Account |
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230 | (1) |
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230 | (1) |
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Commingling Customer's Pledged Securities |
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230 | (1) |
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231 | (1) |
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231 | (2) |
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233 | (4) |
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Chapter 8 Margin Accounts |
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237 | (22) |
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237 | (3) |
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240 | (1) |
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Establishing a Long Position in a Margin Account |
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240 | (1) |
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An Increase in the Long Market Value |
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241 | (2) |
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Special Memorandum Account (SMA) Long Margin Account |
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243 | (1) |
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A Decrease in the Long Market Value |
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244 | (1) |
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The Minimum Equity Requirement for Long Margin Accounts |
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245 | (1) |
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Establishing a Short Position in a Margin Account |
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246 | (1) |
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A Decrease in the Short Market Value |
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247 | (1) |
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An Increase in the Short Market Value |
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248 | (1) |
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The Minimum Equity Requirement for Short Margin Accounts |
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249 | (1) |
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Margin Requirements for Day Trading |
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250 | (1) |
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251 | (1) |
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Portfolio Margin Accounts |
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252 | (1) |
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Securities Backed Lines of Credit |
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252 | (1) |
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Minimum Margin for Leveraged ETFs |
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253 | (2) |
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255 | (4) |
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Chapter 9 Investment Companies |
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259 | (36) |
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Investment Company Philosophy |
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259 | (1) |
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Types of Investment Companies |
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260 | (1) |
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Open-End vs. Closed-End Funds |
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261 | (1) |
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Exchange-Traded Funds (ETFs) |
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262 | (1) |
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Exchange-Traded Notes (ETNs) |
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262 | (1) |
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ETFs That Track Alternatively Weighted Indices |
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263 | (1) |
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Diversified vs. Nondiversified |
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263 | (1) |
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Investment Company Registration |
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264 | (1) |
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Registration Requirements |
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264 | (2) |
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Investment Company Components |
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266 | (3) |
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269 | (1) |
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269 | (1) |
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Distribution of No-Load Mutual Fund Shares |
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270 | (1) |
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Distribution of Mutual Fund Shares |
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270 | (1) |
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270 | (2) |
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Additional Disclosures by a Mutual Fund |
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272 | (1) |
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272 | (1) |
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273 | (1) |
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Valuing Mutual Fund Shares |
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273 | (1) |
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274 | (1) |
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Sales Charges for Open-End Funds |
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275 | (1) |
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Sales Charges for Closed-End Funds |
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275 | (1) |
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275 | (1) |
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276 | (1) |
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Other Types of Sales Charges |
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276 | (1) |
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Recommending Mutual Funds |
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277 | (1) |
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277 | (1) |
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Calculating a Mutual Fund's Sales Charge Percentage |
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278 | (1) |
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Finding the Public Offering Price |
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279 | (1) |
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279 | (1) |
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280 | (1) |
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280 | (1) |
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281 | (1) |
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281 | (1) |
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Automatic Reinvestment of Distributions |
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282 | (1) |
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282 | (1) |
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Conversion or Exchange Privileges |
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282 | (1) |
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30-Day Emergency Withdrawal |
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283 | (1) |
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283 | (1) |
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284 | (1) |
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284 | (1) |
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Voluntary Accumulation Plans |
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284 | (1) |
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285 | (1) |
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Contractual Accumulation Plans |
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286 | (1) |
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287 | (1) |
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Floating Rate Bank Loan Funds |
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288 | (1) |
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Structured Retail Products/SRPs |
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288 | (1) |
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Real Estate Investment Trusts (REITs) |
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289 | (1) |
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289 | (2) |
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291 | (4) |
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Chapter 10 Variable Annuities and Retirement Plans |
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295 | (30) |
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295 | (5) |
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300 | (1) |
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301 | (1) |
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301 | (1) |
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302 | (1) |
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Factors Affecting the Size of the Annuity Payment |
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303 | (1) |
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304 | (1) |
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304 | (1) |
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Variable Annuity vs. Mutual Fund |
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304 | (1) |
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305 | (1) |
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305 | (1) |
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Individual Retirement Accounts (IRAs) |
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305 | (6) |
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311 | (1) |
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Tax-Sheltered Annuities (TSAs) and Tax-Deferred Accounts (TDAs) |
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312 | (2) |
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314 | (2) |
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Employee Stock Ownership Plans (ESOPs) |
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316 | (1) |
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316 | (1) |
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316 | (1) |
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Rolling Over a Pension Plan |
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317 | (1) |
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Employee Retirement Income Security Act of 1974 (ERISA) |
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317 | (1) |
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The Department of Labor Fiduciary Rules |
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318 | (3) |
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321 | (4) |
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Chapter 11 Securities Industry Rules and Regulations |
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325 | (50) |
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The Securities Exchange Act of 1934 |
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325 | (1) |
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The Securities and Exchange Commission (SEC) |
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326 | (1) |
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327 | (1) |
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327 | (1) |
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Issuers Repurchasing Their Own Securities |
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327 | (2) |
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329 | (1) |
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330 | (1) |
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The National Association of Securities Dealers (NASD) |
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331 | (2) |
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Becoming a Member of FINRA |
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333 | (2) |
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335 | (1) |
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Compensation Paid to Unregistered Persons |
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335 | (1) |
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Registration of Agents/Associated Persons |
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335 | (1) |
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Retiring Representatives/Continuing Commissions |
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336 | (1) |
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336 | (1) |
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Retail Communications/Communications with the Public |
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337 | (1) |
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FINRA Rule 2210 Communications with the Public |
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338 | (2) |
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340 | (1) |
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341 | (1) |
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341 | (1) |
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341 | (1) |
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342 | (1) |
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342 | (1) |
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Misleading Communications |
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343 | (1) |
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Securities Investor Protection Corporation Act of 1970 |
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343 | (1) |
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343 | (2) |
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The Securities Acts Amendments of 1975 |
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345 | (1) |
|
The Insider Trading and Securities Fraud Enforcement Act of 1988 |
|
|
345 | (1) |
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346 | (1) |
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The Trust Indenture Act of 1939 |
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346 | (1) |
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346 | (1) |
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The Penny Stock Cold Call Rule |
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347 | (1) |
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Violations and Complaints |
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348 | (1) |
|
Resolution of Allegations |
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349 | (1) |
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349 | (1) |
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350 | (1) |
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350 | (1) |
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351 | (1) |
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351 | (2) |
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353 | (1) |
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Investment Adviser Registration |
|
|
354 | (1) |
|
Investment Adviser Representative |
|
|
355 | (1) |
|
The National Securities Markets Improvement Act of 1996 |
|
|
355 | (1) |
|
Investment Adviser Registration |
|
|
356 | (1) |
|
Investment Adviser Capital Requirements |
|
|
356 | (1) |
|
Exams for Investment Advisers |
|
|
357 | (1) |
|
Investment Adviser Advertising and Sales Literature |
|
|
357 | (1) |
|
Investment Adviser Brochure Delivery |
|
|
358 | (1) |
|
|
|
358 | (2) |
|
Broker Dealers on the Premises of Other Financial Institutions |
|
|
360 | (1) |
|
The Uniform Securities Act |
|
|
361 | (1) |
|
|
|
361 | (2) |
|
|
|
363 | (1) |
|
|
|
363 | (2) |
|
The Hart-Scott-Rodino Act |
|
|
365 | (1) |
|
FINRA Rule 5150 (Fairness Opinion) |
|
|
366 | (1) |
|
|
|
366 | (3) |
|
|
|
369 | (6) |
| Answer Keys |
|
375 | (10) |
| Appendix |
|
385 | (34) |
| Glossary of Exam Terms |
|
419 | (66) |
| Index |
|
485 | |
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