Series 24 Exam Tip!

Here is some great information for the series 24 exam regarding customer account transfers / ACATS. Series 24 exam students sometimes get tripped up on the ACAT process. Reading the flowing information can greatly help you master the account transfer process for the series 24 exam.

Account Transfer




Clients from time to time will wish to have their accounts transferred from one brokerage firm to another. This is usually accomplished through an Automated Client Account Transfer, or an ACAT. The ACAT provides transfer and delivery instructions to the firm, which will be required to deliver the account to the client’s new firm. Once transfer instructions are received, no new orders may be accepted and all open orders must be cancelled, except for open orders for options that expire within seven days. The firm that receives the transfer instructions is required to validate the instructions or take exception to them within one business day. Upon validation, the transfer instructions must be sent back to the receiving firm with a list of the positions to be transferred, the value of the positions and a description for any securities that do not have a CUSIP number. Once the instructions have been validated, the firm has another three business days to complete the account transfer. A firm may only take exception to the instructions for the following reasons:



 The customer’s signature is missing or invalid

 The account title does not match the carrying firm’s account title

 The social security number does not match

 The account number is wrong



A difference in securities positions and free credit balances is not a reason to take exception to the transfer instructions. From time to time, certain investment positions will not be able to be transferred from the old firm to the new firm. The customer must be informed of this fact in writing and the customer is required to give specific instructions as to what should be done with that investment. The customer may elect to:



 Leave the investment at the old firm

 Have it liquidated

 Have it shipped to them



If the position is liquidated, the proceeds must be forwarded to the customer within five business days. If the customer is transferring an account that has a checking account, debit, or credit card connected to the account, the customer must return or destroy the checks and the card. Broker dealers that engage in partial account transfers from one broker dealer to another use the DTC to settle the transfers. If the old firm fails to deliver a position to the new firm, the old firm has a fail to deliver and the new firm has a fail to receive. Securities or cash positions that are transferred to the new firm that were not on the ACAT form are known as “residual credits”. Occasionally after the account has been transferred dividends and interest payment may get posted to the customer’s account at the original carrying firm. If this happens the original firm is required to continue to send any residual credits for six months and must make the transfer within 10 business days of the credit being posted to the customer’s former account.


Take some free series 24 exam questions on our site at::

http://www.securitiesce.com/web/pages/series24/index.php

series 24 Exam

Here is some great information for the series 24 exam relating to net transactions with customers:


Net Transactions With Customers:




A broker dealer when acting as principal may execute a transaction for a customer as a “net transaction”. In a net transaction the broker dealer will purchase the security in the market place at one price and sell it to the customer at a higher price for a profit instead of charging the customer a markup. The profit received by the broker dealer is not reported on the customer’s confirmation, which only shows the net price. Because the trades take place at two different prices both trades must reported to the tape though the NASDAQ TRF. Individual customers must give the broker dealer written permission for each trade to be executed on a net basis. Institutional customers may approve net transactions orally, in writing or may give blanket consent by not replying to a negative consent letter which would allow the institution to opt out of net transactions by replying to the letter.

take some free series 24 exam questions on our site at:
 
http://www.securitiesce.com/web/pages/series24/index.php

Series 24 Exam Question

Here is a great series 24 exam question regarding electronic communications between departments at FINRA member firms.

Regarding electronic communications between a firm's research department and non-research departments all of the following are true except:

A) Pre- approval of FINRA is required
B) Pre-approval by the principal is required for certain public communications
C) Copies of the electronic communications must sent to the firm's legal department
D) Copies of the electronic communications must be sent to the firm's compliance department

A) Both the NYSE and FINRA rules require that electronic communications between the research and non-research departments be copied to the firm's legal and compliance departments. Additionally, the principal is required to pre-approve all sales literature (eg: a research report). FINRA does not approve internal communications, advertising or sales literature.



take some  free series 24 exam questions on our site at:

http://www.securitiesce.com/web/pages/series24/index.php

How Hard is The Series 24 Exam?

We get asked questions about the pass rates for the series 24 exam all of the time. The series 24 exam is among the most challenging for students for several reasons.

1) Most students have not sat on trading desks or made markets in securties

and

2) Most have students have not been part of a syndicate that have structured corporate or municipal securities offerings.

These are the areas that tend to give students the most difficulty. We recommend that students spend a lot of time reviewing this sections to ensure that they are well prepared for the series 24 exam.

Take some free series 24 sample questions on our site at:

http://www.securitiesce.com/web/pages/series24/index.php


Good Luck on your series 24 exam!