Series 24 Exam Questions with
Verified Solutions
Form NMA - ANS-Opens 180 day window for new application for b/d registration
Finra responsibilities - ANS-Obl/authority interpret rules, fees, compliance issues,
disputes, CRD, education
Form BD - ANS-form used by B/D to register with SEC, SRO's. Must be updated within
30 days when out of date.
Form CMA - ANS-must be filed electronically when there is a change in ownership or
control.
Finra regulates which securities? - ANS-OTC nonexempt securities
Nasdaq rule 1014 - ANS-org chart, business plan, supervisory systems, financial
projections, record keeping
When are DBA's acceptable? - ANS-acceptable if filed with finra and commission
Each B/D must have a min of how many principals register (except for Sole
proprietors)? - ANS-2 principals (min)
DMR ( Dept of Member Registration) process/responsibilities? - ANS-review applicants
capital, scope of business harmony with public interest and protection of investors.
DMR issues a written decision within how many days of the pre-membership interview?
- ANS-30 days (grant the application, deny it, grant with restrictions)
Finra requires how many resident principals for Office of Supervisory Jurisdiction? -
ANS-1 resident principal
What is statutory disqualification? - ANS-disciplinary actions in the last 10 years by
SEC.
What is form MC400? - ANS-Form that needs to be completed if a firm wants to
sponsor a person who was disqualified. Disqualifications also include DUI and assault,
however, they do not pose a risk to investors and may be approved.
,What is the fee paid by firms to employee statutory disqualified employees (if approved
by finra)? - ANS-$1500 annually Tier 1
$1000 annually Tier 2
If Finra bars or suspends a Associated Person, member firms cannot - ANS-employee
these people in any capacity
What is rule 9522? - ANS-Dept of Member Regulation (DMR) has right to approve
statutory disqualified persons to become an associate of a member firm.
What is rule Rule 4530 - ANS-must report within 30 calendar days.
What is Form BDW used for ? - ANS-used to withdraw registration as a B/D
Member firms membership can be suspended/revoked if feed are not paid with in how
many days? - ANS-15 days
When is a principal required? - ANS-1)actively engaged in mngt of investment
banking/securities business
2) When supervising associated persons
How many days does a b/d have to respond to a potential employer regarding an
associated person? - ANS-10 business days
How many years of employment do principals need check before signing U-4? - ANS-3
years
Finger printing - ANS-3 attempts
summer interns do not need finger printing
non- registered persons - outside bookkeeping vendors
U-5 - ANS-1) must be completed in 30 days of termination.
2) new employer gets U-5 from Finra (not former employer)
3) if requested, new employee has 2 business days to forward u-5 to employer
Regulatory element requirements - ANS-120 days after 2nd registration anniversary and
every 3 years there after. If person fails to meet requirement, license will be "inactive'.
Cannot perform any job duties. In-Firm exemptions may apply if approved by Finra.
Firm element - ANS-annual training by firm to review regulatory developments, sup
needs, scope of member business activities.
Brokerage supervision (principals) responsibilities - ANS-1) ensure RR have good
working knowledge of WSP's.
2) SEC Act 1934
3) review accts/activity/transactions
, 4) accepts new customer accounts
make sure RR is properly qualified
5) Suitability
What should a member firm do if customer refuses to provide information for new acct?
- ANS-1) Member firm may use whatever info available to decide whether to open
account or not.
2) If no info provided, no recommendations can be made.
What is an OSJ? - ANS-order execution, market making, formation of offerings, custody
of accts, supervision of activities by RR.
Must be managed by one resident principal - review accts, WSP, inspection, maintain
records.
Designation record must be retained for how long? This is attached to the firms WSP. -
ANS-6 years
Who is exempt from inspections? - ANS-locations that only do research
How long must inspection records be kept? - ANS-3 years
What is a disciplined firm? - ANS-a firm that has been expelled from membership or
subject to an SEC order. Firm would be required to monitor telemarketing activities, if:
Level # employees # from disciplined firm
Level A 5-9 40% or more
Level B 10-19 4
Level C 20 or more 20% or more
Once approved, firm has 60 days to implement procedures for recording. Firm has one
time opportunity to reduce staff levels below thresholds to avoid requirements.
What Is a branch office? - ANS-1 or more members regularly conduct business to make
a sale.
Networking arrangements - ANS-B/D's working on a bank premise must be clearly
marked, in designated area, customer must be made aware prior to account opening (in
writing) that services are not being offered by financial institution.
Oral disclosures must also be made regarding:
not FDIC insured
No Guarantees
subject to investment risks
Retail Communications regarding B/D services - ANS-may use simplified legend to
disclose info (No FDIC, May Lose Value, No Bank Guarantee)
Verified Solutions
Form NMA - ANS-Opens 180 day window for new application for b/d registration
Finra responsibilities - ANS-Obl/authority interpret rules, fees, compliance issues,
disputes, CRD, education
Form BD - ANS-form used by B/D to register with SEC, SRO's. Must be updated within
30 days when out of date.
Form CMA - ANS-must be filed electronically when there is a change in ownership or
control.
Finra regulates which securities? - ANS-OTC nonexempt securities
Nasdaq rule 1014 - ANS-org chart, business plan, supervisory systems, financial
projections, record keeping
When are DBA's acceptable? - ANS-acceptable if filed with finra and commission
Each B/D must have a min of how many principals register (except for Sole
proprietors)? - ANS-2 principals (min)
DMR ( Dept of Member Registration) process/responsibilities? - ANS-review applicants
capital, scope of business harmony with public interest and protection of investors.
DMR issues a written decision within how many days of the pre-membership interview?
- ANS-30 days (grant the application, deny it, grant with restrictions)
Finra requires how many resident principals for Office of Supervisory Jurisdiction? -
ANS-1 resident principal
What is statutory disqualification? - ANS-disciplinary actions in the last 10 years by
SEC.
What is form MC400? - ANS-Form that needs to be completed if a firm wants to
sponsor a person who was disqualified. Disqualifications also include DUI and assault,
however, they do not pose a risk to investors and may be approved.
,What is the fee paid by firms to employee statutory disqualified employees (if approved
by finra)? - ANS-$1500 annually Tier 1
$1000 annually Tier 2
If Finra bars or suspends a Associated Person, member firms cannot - ANS-employee
these people in any capacity
What is rule 9522? - ANS-Dept of Member Regulation (DMR) has right to approve
statutory disqualified persons to become an associate of a member firm.
What is rule Rule 4530 - ANS-must report within 30 calendar days.
What is Form BDW used for ? - ANS-used to withdraw registration as a B/D
Member firms membership can be suspended/revoked if feed are not paid with in how
many days? - ANS-15 days
When is a principal required? - ANS-1)actively engaged in mngt of investment
banking/securities business
2) When supervising associated persons
How many days does a b/d have to respond to a potential employer regarding an
associated person? - ANS-10 business days
How many years of employment do principals need check before signing U-4? - ANS-3
years
Finger printing - ANS-3 attempts
summer interns do not need finger printing
non- registered persons - outside bookkeeping vendors
U-5 - ANS-1) must be completed in 30 days of termination.
2) new employer gets U-5 from Finra (not former employer)
3) if requested, new employee has 2 business days to forward u-5 to employer
Regulatory element requirements - ANS-120 days after 2nd registration anniversary and
every 3 years there after. If person fails to meet requirement, license will be "inactive'.
Cannot perform any job duties. In-Firm exemptions may apply if approved by Finra.
Firm element - ANS-annual training by firm to review regulatory developments, sup
needs, scope of member business activities.
Brokerage supervision (principals) responsibilities - ANS-1) ensure RR have good
working knowledge of WSP's.
2) SEC Act 1934
3) review accts/activity/transactions
, 4) accepts new customer accounts
make sure RR is properly qualified
5) Suitability
What should a member firm do if customer refuses to provide information for new acct?
- ANS-1) Member firm may use whatever info available to decide whether to open
account or not.
2) If no info provided, no recommendations can be made.
What is an OSJ? - ANS-order execution, market making, formation of offerings, custody
of accts, supervision of activities by RR.
Must be managed by one resident principal - review accts, WSP, inspection, maintain
records.
Designation record must be retained for how long? This is attached to the firms WSP. -
ANS-6 years
Who is exempt from inspections? - ANS-locations that only do research
How long must inspection records be kept? - ANS-3 years
What is a disciplined firm? - ANS-a firm that has been expelled from membership or
subject to an SEC order. Firm would be required to monitor telemarketing activities, if:
Level # employees # from disciplined firm
Level A 5-9 40% or more
Level B 10-19 4
Level C 20 or more 20% or more
Once approved, firm has 60 days to implement procedures for recording. Firm has one
time opportunity to reduce staff levels below thresholds to avoid requirements.
What Is a branch office? - ANS-1 or more members regularly conduct business to make
a sale.
Networking arrangements - ANS-B/D's working on a bank premise must be clearly
marked, in designated area, customer must be made aware prior to account opening (in
writing) that services are not being offered by financial institution.
Oral disclosures must also be made regarding:
not FDIC insured
No Guarantees
subject to investment risks
Retail Communications regarding B/D services - ANS-may use simplified legend to
disclose info (No FDIC, May Lose Value, No Bank Guarantee)
