FINRA Series 10 Exam 63 Questions with Verified Answers
New Stock in registration phase.... - CORRECT ANSWER RR may NOT send out
report! This would constitute an offer.
Under Rule 144, a customer wishing to sell must file 144 'Notice of Sale' with SCC -
CORRECT ANSWER Concurrent with placement of the sale order
Allowed prior to the filing of the Registration statement - CORRECT ANSWER
NOTHING!
No Rule 144? - CORRECT ANSWER No filing is required if the sale amount every 90
days does not exceed 5000 shares nor more than $50,000.
3 Year Records - CORRECT ANSWER Order Tickets
Communications to Customers
Customer complaints (CBOE )
Advertising.
6 Year Records - CORRECT ANSWER Customer Acct Statements
Trade Bloggers
Cash receipts (disbursement blotters)
District Hearing Panel - CORRECT ANSWER Customer files standard complaint form,
which is forwarded to DHP.
Panel renders dicision within 60 days
A registered rep is fined more than $2500 - CORRECT ANSWER This must be filed
(reported) promptly with FINRA (NO LATER THAN 30 DAYS after event)
This is a reportable event.
Rule 147 - CORRECT ANSWER Intrastate offerings cannot be resold out of state for 9
months after sale date.
Requirements of Rule 147 - CORRECT ANSWER The issuer must obtain proof of
residency from each purchaser. The issuer must place a restriction legend on the
certificates. The issuer must be a resident of that state.
, Rule 10b-2 - CORRECT ANSWER Prohibits underwriter, issuer, or participant in a new
issue distribution from placing buy orders for the issue, buying the issue, or taking
options positions on the issue in the aftermarket.
Who is prohibited from buying an IPO of an equity security under Rule 5130? -
CORRECT ANSWER Portfolio Manager of an Investment Company and a Portfolio
Manager of Insurance Company (Investment Co. and Insurance Co. CAN buy an IPO).
The FINRA IPO Policy that prohibits industry "insiders" from buying new equity issues
applies to: - CORRECT ANSWER NEW COMMON ISSUES
(it does NOT apply to Debt offerings, Secondary Common stock distributions, and
Private placements under Reg D.)
Orders that are placed below the market... - CORRECT ANSWER .... are reduced on
ex-date, for cash dividends. (OBLOSS).
Orders that are placed above the market.... - CORRECT ANSWER .... are not reduced
on ex-date for cash dividends. (OSLOBS).
If there is a stock dividend or stock split... - CORRECT ANSWER then all open orders
will be adjusted.
Stock dividends that result in round lots (NYSE): - CORRECT ANSWER Number of
shares Increased and Price reduced.
Stock splits that result in Odd Lots (NYSE): - CORRECT ANSWER Number of Shares
STAYS THE SAME, and the price is still reduced.
If there is a reverse split (NYSE): - CORRECT ANSWER All open orders and cancelled.
Commission on OTC and Exchange Agency Trades - CORRECT ANSWER
COMMISSION DISCLOSED!
Mark-up on OTC Principal Transactions in NASDAQ Issues - CORRECT ANSWER
MARK-UP DISCLOSED!
Non-NASDAQ OTC Principal Transactions - CORRECT ANSWER Mark-up NOT
disclosed!
Max sales charge on Fund that DOES NOT impose 12b-1 fee: - CORRECT ANSWER 8
1/2 %
ABC corporation has 18,000,000 shares outstanding. An officer of ABC wishes to sell
ABC stock on November 15th. The prior weeks' trading volumes are:
Week Ending Volume
Nov 12th 175,000 shares
New Stock in registration phase.... - CORRECT ANSWER RR may NOT send out
report! This would constitute an offer.
Under Rule 144, a customer wishing to sell must file 144 'Notice of Sale' with SCC -
CORRECT ANSWER Concurrent with placement of the sale order
Allowed prior to the filing of the Registration statement - CORRECT ANSWER
NOTHING!
No Rule 144? - CORRECT ANSWER No filing is required if the sale amount every 90
days does not exceed 5000 shares nor more than $50,000.
3 Year Records - CORRECT ANSWER Order Tickets
Communications to Customers
Customer complaints (CBOE )
Advertising.
6 Year Records - CORRECT ANSWER Customer Acct Statements
Trade Bloggers
Cash receipts (disbursement blotters)
District Hearing Panel - CORRECT ANSWER Customer files standard complaint form,
which is forwarded to DHP.
Panel renders dicision within 60 days
A registered rep is fined more than $2500 - CORRECT ANSWER This must be filed
(reported) promptly with FINRA (NO LATER THAN 30 DAYS after event)
This is a reportable event.
Rule 147 - CORRECT ANSWER Intrastate offerings cannot be resold out of state for 9
months after sale date.
Requirements of Rule 147 - CORRECT ANSWER The issuer must obtain proof of
residency from each purchaser. The issuer must place a restriction legend on the
certificates. The issuer must be a resident of that state.
, Rule 10b-2 - CORRECT ANSWER Prohibits underwriter, issuer, or participant in a new
issue distribution from placing buy orders for the issue, buying the issue, or taking
options positions on the issue in the aftermarket.
Who is prohibited from buying an IPO of an equity security under Rule 5130? -
CORRECT ANSWER Portfolio Manager of an Investment Company and a Portfolio
Manager of Insurance Company (Investment Co. and Insurance Co. CAN buy an IPO).
The FINRA IPO Policy that prohibits industry "insiders" from buying new equity issues
applies to: - CORRECT ANSWER NEW COMMON ISSUES
(it does NOT apply to Debt offerings, Secondary Common stock distributions, and
Private placements under Reg D.)
Orders that are placed below the market... - CORRECT ANSWER .... are reduced on
ex-date, for cash dividends. (OBLOSS).
Orders that are placed above the market.... - CORRECT ANSWER .... are not reduced
on ex-date for cash dividends. (OSLOBS).
If there is a stock dividend or stock split... - CORRECT ANSWER then all open orders
will be adjusted.
Stock dividends that result in round lots (NYSE): - CORRECT ANSWER Number of
shares Increased and Price reduced.
Stock splits that result in Odd Lots (NYSE): - CORRECT ANSWER Number of Shares
STAYS THE SAME, and the price is still reduced.
If there is a reverse split (NYSE): - CORRECT ANSWER All open orders and cancelled.
Commission on OTC and Exchange Agency Trades - CORRECT ANSWER
COMMISSION DISCLOSED!
Mark-up on OTC Principal Transactions in NASDAQ Issues - CORRECT ANSWER
MARK-UP DISCLOSED!
Non-NASDAQ OTC Principal Transactions - CORRECT ANSWER Mark-up NOT
disclosed!
Max sales charge on Fund that DOES NOT impose 12b-1 fee: - CORRECT ANSWER 8
1/2 %
ABC corporation has 18,000,000 shares outstanding. An officer of ABC wishes to sell
ABC stock on November 15th. The prior weeks' trading volumes are:
Week Ending Volume
Nov 12th 175,000 shares
