LOMA 311 EXAM SCRIPT 2026 FULL
SOLUTIONS VERIFIED CORRECT
RESPONSES HIGH SCORING
◉ Closed-end investment companies.
Answer: A closed-end investment company
is an investment company that issues a fixed number of shares to
the public
and does not redeem shares that are outstanding.
◉ Unit Investment Trust (UIT)
Answer: The separate accounts of most life insurers are registered
with the SEC as unit investment trusts. These unit investment trusts
own and hold assets for the participants in variable life insurance
and variable annuity contracts. Each separate account may be
divided into subaccounts. Each subaccount may invest in a different
open-end investment company. The open-end investment companies
in which the separate accounts are invested must be registered as
investment companies.
◉ Prospectus
Answer: a communication, usually in writing,
, that offers a security for sale and that must contain detailed
information
about the issuer of the security and the security itself.
◉ Securities Broker and dealer
Answer: a person, corporation, or other legal entity engaged in the
business of
buying and selling securities for the accounts of OTHERS. Securities
brokers
often operate as both a securities broker and a securities dealer.
securities dealer is a person, corporation, or other legal entity
that is engaged in the business of buying and selling securities for
its
OWN account.
The term broker-dealer is often
used to refer to individuals and firms that transact securities
business.
◉ Financial Industry Regulatory Authority (FINRA)
,Answer: a nonprofit organization of member firms and is
responsible for regulating all securities firms doing business in the
United States. FINRA
is supervised by the SEC.
Generally, two levels of qualification
and registration are available:
-A registered representative is
a person who is associated with a FINRA member, engages in the
securities business on behalf of the member by soliciting the sale of
securities or by training securities salespeople, and has passed the
applicable examination administered by FINRA.
- A principal is generally an officer and/or manager of a FINRA
member and is involved in the day-to-day operation and supervision
of the securities business, has qualified as a registered
representative, and has passed additional examinations
administered by FINRA.
We use the term registered person to refer to both registered
representatives
and principals. A person who solicits the sale of variable life
insurance
and/or variable annuities must be registered with FINRA and
licensed by
, the state as an insurance agent.
◉ FINRA Rules
Answer: =Broker-dealers must establish and MAINTAIN a system to
supervise the activities of the registered persons who work under
their control.
This system must reasonably ensure compliance with regulatory
requirements.
A principal must directly supervise the activities of each registered
representative.
++When making an investment recommendation to a customer, a
registered person must have reasonable grounds to believe the
recommendation is suitable for the customer.
=Advertisements, sales literature, and correspondence that broker-
dealers and registered persons use to communicate with the public
must meet certain requirements. For
instance, sales materials must NOT contain promises of specific
investment
results.
=Broker-dealers must file certain public communication materials
with FINRA for review. During the first year a broker-dealer is a
FINRA member, the broker-dealer must submit all such materials to
SOLUTIONS VERIFIED CORRECT
RESPONSES HIGH SCORING
◉ Closed-end investment companies.
Answer: A closed-end investment company
is an investment company that issues a fixed number of shares to
the public
and does not redeem shares that are outstanding.
◉ Unit Investment Trust (UIT)
Answer: The separate accounts of most life insurers are registered
with the SEC as unit investment trusts. These unit investment trusts
own and hold assets for the participants in variable life insurance
and variable annuity contracts. Each separate account may be
divided into subaccounts. Each subaccount may invest in a different
open-end investment company. The open-end investment companies
in which the separate accounts are invested must be registered as
investment companies.
◉ Prospectus
Answer: a communication, usually in writing,
, that offers a security for sale and that must contain detailed
information
about the issuer of the security and the security itself.
◉ Securities Broker and dealer
Answer: a person, corporation, or other legal entity engaged in the
business of
buying and selling securities for the accounts of OTHERS. Securities
brokers
often operate as both a securities broker and a securities dealer.
securities dealer is a person, corporation, or other legal entity
that is engaged in the business of buying and selling securities for
its
OWN account.
The term broker-dealer is often
used to refer to individuals and firms that transact securities
business.
◉ Financial Industry Regulatory Authority (FINRA)
,Answer: a nonprofit organization of member firms and is
responsible for regulating all securities firms doing business in the
United States. FINRA
is supervised by the SEC.
Generally, two levels of qualification
and registration are available:
-A registered representative is
a person who is associated with a FINRA member, engages in the
securities business on behalf of the member by soliciting the sale of
securities or by training securities salespeople, and has passed the
applicable examination administered by FINRA.
- A principal is generally an officer and/or manager of a FINRA
member and is involved in the day-to-day operation and supervision
of the securities business, has qualified as a registered
representative, and has passed additional examinations
administered by FINRA.
We use the term registered person to refer to both registered
representatives
and principals. A person who solicits the sale of variable life
insurance
and/or variable annuities must be registered with FINRA and
licensed by
, the state as an insurance agent.
◉ FINRA Rules
Answer: =Broker-dealers must establish and MAINTAIN a system to
supervise the activities of the registered persons who work under
their control.
This system must reasonably ensure compliance with regulatory
requirements.
A principal must directly supervise the activities of each registered
representative.
++When making an investment recommendation to a customer, a
registered person must have reasonable grounds to believe the
recommendation is suitable for the customer.
=Advertisements, sales literature, and correspondence that broker-
dealers and registered persons use to communicate with the public
must meet certain requirements. For
instance, sales materials must NOT contain promises of specific
investment
results.
=Broker-dealers must file certain public communication materials
with FINRA for review. During the first year a broker-dealer is a
FINRA member, the broker-dealer must submit all such materials to
