A Series 24 Exam Question!

Here is a great series 24 exam question from the Supervision of Brokerage Office Operations section of the series 24 exam:

When a customer enters a sell order and the customer is in possession of the certificates, a broker dealer must determine all of the following except:


A) Whether the securities are in deliverable form

B) The location of the securities

C) Whether the client can make delivery promptly

D) Whether the transfer agent has accepted the securities

ANSWER:

D) A firm must make an affirmative determination and be reasonably sure the client can make prompt delivery. Approval of the transfer agent is not a factor when accepting a sell order.

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 from the Supervision of Brokerage Office Operations section of the series 24 exam:

When a customer enters a sell order and the customer is in possession of the certificates, a broker dealer must determine all of the following except:


A) Whether the securities are in deliverable form

B) The location of the securities

C) Whether the client can make delivery promptly

D) Whether the transfer agent has accepted the securities

ANSWER:

D) A firm must make an affirmative determination and be reasonably sure the client can make prompt delivery. Approval of the transfer agent is not a factor when accepting a sell order.

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

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

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 :

An MFP donates $2,500 to a candidate in an election where they are not able to vote. The candidate running for municipal office is an old college friend of the MFP. Which of the following is true?



A) The employing firm has no restrictions due to the relationship between the MFP and the candidate.

B) If the employing firm wants to bid on an offering in that municipality it must get prior permission from FINRA.

C) The firm is restricted from bidding on offerings in that municipality for 2 years.

D) The firm is restricted from bidding on offerings in that municipality for 270 days.

Anser:

(C) The firm is restricted from bidding on offerings is that municipality for 2 years because the donation was greater than $250 and the MFP making the donation can not vote in the election.

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

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

New Series 24 Exam 2/12/2008

The new series 24 exam outline effective 2/12/2008 will have the following test focus points.


Supervision of Investment Banking, Underwriting & Research 33 Questions
Supervision of Trading and Market Making 31 Questions
Supervision of Brokerage Office Operations 29 Questions
Sales Supervision & General Supervision of Employees 43 Questions
Compliance with Financial Responsibility Rules 14 questions

Some of the new material on the series 24 exam includes:

Regulation S-K
Regulation S-X
Regulation M-A
Regulation NMS
Regulation ATS
Regulation SHO
Sarbanes –Oxley
Step out trades
Net trading


Here are some excerpts from our new series 24 textbook:

Sarbanes-Oxley Act

The Sarbanes - Oxley Act also known as the Public Company Accounting Reform and Investor Protection Act of 2002 was enacted to help restore confidence in the financial reports and accounting standards of publicly traded companies. The Act created the Public Company Accounting Oversight Board to oversee, regulate and discipline accounting firms’ activities when performing auditing functions for publicly traded companies. Section 302 of the Sarbanes- Oxley Act requires the management of publicly traded companies affirm the accuracy of the company’s financial reports and to accept responsibility for the content of the reports by signing all annual and quarterly reports filed under The Securities Exchange Act of 1934. The principal executive officer as well as the principal financial officer must:

Sign an acknowledgement that they have read the report
Certify to their knowledge that the financial reports do not contain any untrue or misleading statements
Certify that to their knowledge the reports do not omit any material fact and accurately represent the company’s financial condition for the period covered by the report
Establish internal controls to ensure the accurate reporting of all of the issuer’s subsidiaries
Have evaluated the effectiveness of the internal controls within 90 days prior to the filing of the report and must file a report relating to the effectiveness of the internal controls
Disclose to the audit committee and the board of directors any deficiencies with internal controls or any act of fraud involving management or any employee significantly involved in the company’s internal controls
Disclose any material changes to the internal controls or any weaknesses or corrective actions taken

Section 401 of the Sarbanes-Oxley Act requires financial reports to contain detailed information regarding any off balance sheet transactions, obligations and liabilities the company may have engaged in or have outstanding. The statement may not contain any false or misleading information.

Section 402 of the Sarbanes-Oxley Act enhanced conflict of interest rules regarding loans made by the company to any officer. Section 402 of the act made it unlawful for any company to extend or maintain personal loans either directly or indirectly through a subsidiary to or for any officer of the company.

Section 403 of the Sarbanes-Oxley Act requires that the company’s management as well as any owner of 10% or more of the company’s securities file reports regarding holdings and transactions in the company’s securities. These reports must be filed within 10 days of the person becoming an officer or 10% holder. If any person subject to the reporting requirements of section 403 purchases or sells the company’s securities or enters into a security based swap agreement a report of the transaction must be filed within two business days. Such reports may be filed electronically.

Section 404 of the Sarbanes-Oxley Act requires that management file with the annual report a report detailing the company’s internal controls over financial reporting. The company’s independent auditor is required to certify management’s report regarding its internal controls.


SEC Regulation NMS

SEC Regulation NMS was designed to improve the regulation of the U S markets as a result of the development of multiple market centers. Under the “order protection rule” SEC Regulation NMS requires market centers to establish and enforce policies and procedures to ensure that trades do not get executed at inferior prices to those protected prices displayed in other market centers. A protected price or quote is one that is displayed in a market center that is immediately and automatically accessible. The access rule of Regulation NMS requires fair and non discriminatory access to quotations and establishes uniform fees for access to various trading platforms and market centers. Regulation NMS prohibits members from engaging in any activity designed to intentionally lock or cross markets and prohibits members from quoting securities valued at more than $1 in sub penny prices.


SEC Regulation ATS

Technological innovations have allowed an increasing number of market participants to develop alternative trading systems. As market participants developed new trading systems they often chose to allow access to these systems only to subscribers and as a result hidden markets developed. Trading activity in these systems has not been regulated in the way that trading is regulated on a registered exchange. As a result customer orders entered in the systems were not protected to the same degree as if the orders were entered on a registered exchange. As the trading volume and level of services offered through alternative trading systems increased, alternative trading systems began offering services traditionally only offered by registered exchanges. SEC Regulation ATS was designed to help regulate these alternative trading systems and to bring more uniformity to the national market place. Regulation ATS allows operators of alternative trading systems the choice to register with the SEC as an exchange or as a broker dealer. Regulation ATS also updated the definition of an exchange to include Any organization association, or group of persons that brings together the orders of multiple buyers and sellers and uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) under which such orders interact with each other, and the buyers and sellers entering such orders agree to the terms of a trade. The SEC also further defined the definition of an exchange by excluding from the definition of an exchange systems provided by broker dealers that:

Merely route orders to other facilities for execution;
systems operated by a single registered market maker to display its own bids and offers and the limit orders of its customers, and to execute trades against such orders; and systems that allow persons to enter orders for execution against the bids and offers of a single dealer

Good luck on your Exam!

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

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

Series 24 Tutor

Many students need a little extra help to successfully pass their series 24 exam. For students who may be having trouble in areas such as supervision of trading and market making and in supervision of investment banking, a series 24 tutor may be the perfect solution. A series 24 tutor is also a perfect solution for busy agents who simply do not have the time to attend a class. Private in person tutoring, virtual and phone tutoring are all available from coast to coast to help ensure that you pass your series 24 exam. Call The Securities Institute today to discuss which option may be the best option for you at 877 218 1776.

Take some free series 24 Questions on our site at:

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

Series 24 Tutoring

Many students need a little extra help to successfully pass their series 24 exam. For students who may be having trouble in areas such as supervision of trading and market making and in supervision of investment banking, a series 24 tutor may be the perfect solution. A series 24 tutor is also a perfect solution for busy agents who simply do not have the time to attend a class. Private in person tutoring, virtual and phone tutoring are all available from coast to coast to help ensure that you pass your series 24 exam. Call The Securities Institute today to discuss which option may be the best option for you at 877 218 1776.

Take some free series 24 Questions on our site at:

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