FINRA SERIES 24 STUDY QUESTIONS
Securities Act of 1933 - Answer -Enacted to regulate how securities are registered,
issued and distributed to the public. Primary market focused. AKA the Paper act.
Securities Exchange Act of 1934 - Answer -Regulated broker-dealers and how existing
securities are traded in the secondary market. Created the SEC and SROs. AKA the
People Act
Securities Exchange Act of 1934 (5 things) - Answer -1. It contains important trading
laws
2. It gave the Federal Reserve Board the power to regulate margin requirements
3. It created the SEC to be responsible for the creating and enforcement of securities
laws
4. It allows securities exchanges to regulate themselves
5. It allows broker-dealers to regulate themselves
FINRA - Answer -Only fully registered national securities association. All BDs must
register with FINRA except bank dealers and those who deal in exempt securities.
Self-regulatory organizations - Answer -Exchanges and national securities associations
can regulate themselves. FINRA, MSRB, NASDAQ, NYSE, CBOE
Form BD - Answer -An application for registration which identifies the type and nature
of the applicants business. Also must identify all owners and officers of the firm.
Fingerprint card - Answer -Every officer or employee of a member firm who sells,
handles, or processes securities, or who supervises those who do, must be
fingerprinted
Investment adviser - Answer -The Investment Advisors Act of 1940 defines an
investment adviser as any person or firm that is in the business of providing advice or
reports about securities for compensation
Exempt from Advisers Act - Answer -Advice is incidental to its business:
Lawyers, accountants, teachers, engineers (LATE)
Banks, broker-dealers, publishers
Only U.S. government securities or GSEs
RIA registration - Answer ->$100mm in AUM
Pension consultants of plans >$200mm
principal office in Wyoming
Advisers to registered investment companies
, Form ADV Part I - Answer -Part I - general information about the business and its
ownership, clients, employees, business practices and any disciplinary events of the
adviser or its employees.
Form ADV Part II - Answer -Part II - plain english narrative about business practice,
investment strategies, fees, conflicts of interest, disciplinary information
Securities Investor Protection Corporation (SIPC) - Answer -Nonprofit corporation that
provides insurance for the assets contained in investors' securities accounts.
General Principal (Series 24) - Answer -A person engaged in managing or supervising
registered employees with respect to all activities of her office, except those involving
options accounts or financial reporting to regulators. A general principal may also
approve advertising and sales literature, including communications regarding municipal
securities
General Security Sales Supervisor (Series 9 & 10) - Answer -Supervises sales
activities but cannot supervise investment banking, trading or market making, or
approve advertising or sales literature
Financial & Ops Principal (Series 27) - Answer -Prepares the financial reports for a
clearing firm, filed with FINRA and the SEC
Limited Financial & Ops Principal (Series 28) - Answer -Prepares the less-involved
financial reports for a non-clearing firm, filed with FINRA and the SEC
Investment Companies & Variable Annuities Principal (Series 26) - Answer -Supervises
sales of redeemable securities such as annuities, variable life insurance, and mutual
funds
Direct Participation Program Principal (Series 39) - Answer -Manages firms solely
engaged in the sales of limited partnerships such as real estate or energy products
Municipal Fund Securities Limited Principal (Series 51) - Answer -Manages activities in
municipal funds securities such as college savings plans and local government
investment pools but may not supervise any other type of municipal security
Municipal Principal (Series 53) - Answer -Supervises the purchase and sale of
municipal securities
Legal Reporting Requirements - Answer -Must report to FINRA within 30 calendar days
whenever the member firm or any of its associated persons:
- Violates or is alleged to have violated any securities laws
- Customer complaint
Securities Act of 1933 - Answer -Enacted to regulate how securities are registered,
issued and distributed to the public. Primary market focused. AKA the Paper act.
Securities Exchange Act of 1934 - Answer -Regulated broker-dealers and how existing
securities are traded in the secondary market. Created the SEC and SROs. AKA the
People Act
Securities Exchange Act of 1934 (5 things) - Answer -1. It contains important trading
laws
2. It gave the Federal Reserve Board the power to regulate margin requirements
3. It created the SEC to be responsible for the creating and enforcement of securities
laws
4. It allows securities exchanges to regulate themselves
5. It allows broker-dealers to regulate themselves
FINRA - Answer -Only fully registered national securities association. All BDs must
register with FINRA except bank dealers and those who deal in exempt securities.
Self-regulatory organizations - Answer -Exchanges and national securities associations
can regulate themselves. FINRA, MSRB, NASDAQ, NYSE, CBOE
Form BD - Answer -An application for registration which identifies the type and nature
of the applicants business. Also must identify all owners and officers of the firm.
Fingerprint card - Answer -Every officer or employee of a member firm who sells,
handles, or processes securities, or who supervises those who do, must be
fingerprinted
Investment adviser - Answer -The Investment Advisors Act of 1940 defines an
investment adviser as any person or firm that is in the business of providing advice or
reports about securities for compensation
Exempt from Advisers Act - Answer -Advice is incidental to its business:
Lawyers, accountants, teachers, engineers (LATE)
Banks, broker-dealers, publishers
Only U.S. government securities or GSEs
RIA registration - Answer ->$100mm in AUM
Pension consultants of plans >$200mm
principal office in Wyoming
Advisers to registered investment companies
, Form ADV Part I - Answer -Part I - general information about the business and its
ownership, clients, employees, business practices and any disciplinary events of the
adviser or its employees.
Form ADV Part II - Answer -Part II - plain english narrative about business practice,
investment strategies, fees, conflicts of interest, disciplinary information
Securities Investor Protection Corporation (SIPC) - Answer -Nonprofit corporation that
provides insurance for the assets contained in investors' securities accounts.
General Principal (Series 24) - Answer -A person engaged in managing or supervising
registered employees with respect to all activities of her office, except those involving
options accounts or financial reporting to regulators. A general principal may also
approve advertising and sales literature, including communications regarding municipal
securities
General Security Sales Supervisor (Series 9 & 10) - Answer -Supervises sales
activities but cannot supervise investment banking, trading or market making, or
approve advertising or sales literature
Financial & Ops Principal (Series 27) - Answer -Prepares the financial reports for a
clearing firm, filed with FINRA and the SEC
Limited Financial & Ops Principal (Series 28) - Answer -Prepares the less-involved
financial reports for a non-clearing firm, filed with FINRA and the SEC
Investment Companies & Variable Annuities Principal (Series 26) - Answer -Supervises
sales of redeemable securities such as annuities, variable life insurance, and mutual
funds
Direct Participation Program Principal (Series 39) - Answer -Manages firms solely
engaged in the sales of limited partnerships such as real estate or energy products
Municipal Fund Securities Limited Principal (Series 51) - Answer -Manages activities in
municipal funds securities such as college savings plans and local government
investment pools but may not supervise any other type of municipal security
Municipal Principal (Series 53) - Answer -Supervises the purchase and sale of
municipal securities
Legal Reporting Requirements - Answer -Must report to FINRA within 30 calendar days
whenever the member firm or any of its associated persons:
- Violates or is alleged to have violated any securities laws
- Customer complaint
