FINRA Rules Exam Questions with
Complete Solutions8
A brokerage firm is permitted to hold fully paid customer securities if the brokerage firm
segregates those positions from - ANSWERS-margin securities and places them in safekeeping
Enforcement of regulations regarding trading of listed securities in the "Third Market" is
performed by - ANSWERS-FINRA
Compensation cannot be paid by the customer to the registered representative only the -
ANSWERS-broker-dealer may pay compensation to the registered representative.
To take a second job, an employee of a FINRA member firm the individual needs to
obtain_________ and amend the ________ - ANSWERS-the written permission of his or her
employer AND amend the U-4 filing with FINRA and the SEC
FINRA limits gifts related to one's activities in the securities industry to a maximum of -
ANSWERS-$100 value per person per year
Business entertainment does not fall under the - ANSWERS-$100 gift limit
Business entertainment is permitted as long as it is not _________ and _________ and it must
comply with _________ - ANSWERS-too excessive or too frequent AND must comply with the
firm's policies and procedures
Registered representatives can only share commissions or pay referral fees to - ANSWERS-other
registered persons at the same broker-dealer
, The Firm Element component of the "Continuing Education" requirement must be completed -
ANSWERS-annually
The Firm Element component of the "Continuing Education" requirement is administered by -
ANSWERS-the FINRA-member employer
After completion of his or her first Regulatory Element review, a Registered Representative,
must complete a Regulatory Element review every_________ years thereafter. - ANSWERS-3
years after
The Regulatory Element of the Continuing Education requirement must be completed by
registered persons on their ________ anniversary of registration - ANSWERS-2nd
If a registered representative fails to complete the Regulatory Element of the Continuing
Education requirement within the stated time period, that person - ANSWERS-must cease
performing all of the functions of a registered representative
If a registered representative is employed by a publicly traded member firm (say Raymond
James), generally speaking he or she cannot - ANSWERS-recommend the purchase of that
company's shares
A customer instructs a registered representative to "Buy 100 shares of IBM whenever you think
the price is right." this order can be - ANSWERS-can be accepted as given
A "Not Held" order can be accepted without a written _______ from the customer - ANSWERS-
Discretionary power of attorney from the customer
Under FINRA rules, alterations to executed order tickets are prohibited, unless the alteration is
approved in writing by a "designated person" such as - ANSWERS-a branch manager
Complete Solutions8
A brokerage firm is permitted to hold fully paid customer securities if the brokerage firm
segregates those positions from - ANSWERS-margin securities and places them in safekeeping
Enforcement of regulations regarding trading of listed securities in the "Third Market" is
performed by - ANSWERS-FINRA
Compensation cannot be paid by the customer to the registered representative only the -
ANSWERS-broker-dealer may pay compensation to the registered representative.
To take a second job, an employee of a FINRA member firm the individual needs to
obtain_________ and amend the ________ - ANSWERS-the written permission of his or her
employer AND amend the U-4 filing with FINRA and the SEC
FINRA limits gifts related to one's activities in the securities industry to a maximum of -
ANSWERS-$100 value per person per year
Business entertainment does not fall under the - ANSWERS-$100 gift limit
Business entertainment is permitted as long as it is not _________ and _________ and it must
comply with _________ - ANSWERS-too excessive or too frequent AND must comply with the
firm's policies and procedures
Registered representatives can only share commissions or pay referral fees to - ANSWERS-other
registered persons at the same broker-dealer
, The Firm Element component of the "Continuing Education" requirement must be completed -
ANSWERS-annually
The Firm Element component of the "Continuing Education" requirement is administered by -
ANSWERS-the FINRA-member employer
After completion of his or her first Regulatory Element review, a Registered Representative,
must complete a Regulatory Element review every_________ years thereafter. - ANSWERS-3
years after
The Regulatory Element of the Continuing Education requirement must be completed by
registered persons on their ________ anniversary of registration - ANSWERS-2nd
If a registered representative fails to complete the Regulatory Element of the Continuing
Education requirement within the stated time period, that person - ANSWERS-must cease
performing all of the functions of a registered representative
If a registered representative is employed by a publicly traded member firm (say Raymond
James), generally speaking he or she cannot - ANSWERS-recommend the purchase of that
company's shares
A customer instructs a registered representative to "Buy 100 shares of IBM whenever you think
the price is right." this order can be - ANSWERS-can be accepted as given
A "Not Held" order can be accepted without a written _______ from the customer - ANSWERS-
Discretionary power of attorney from the customer
Under FINRA rules, alterations to executed order tickets are prohibited, unless the alteration is
approved in writing by a "designated person" such as - ANSWERS-a branch manager
