REGULATIONS FINRA REVIEWED QUESTIONS AND ANSWERS

REGULATIONS FINRA REVIEWED
QUESTIONS AND ANSWERS


What is the U.S. Government agency that has enforcement autho
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rity over the U.S. securities markets?
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A: FINRA
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B: SEC
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C: MSRB
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D: CFTC - CORRECT ANSWER-B: SEC
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All of the following statements are true regarding the U.S. securiti
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es markets EXCEPT:
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A: The Federal Reserve Board decides which securities can be tr
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aded on margin
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B: FINRA has regulatory authority over the U.S. securities market
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s and market participants in the trading of all non-
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exempt securities k


C: The Securities and Exchange Commission has regulatory aut
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hority over the U.S. securities market and market participants
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D: The MSRB has regulatory authority over the U.S securities ma
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rkets and market participants in the trading of all exempt securitie
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s - CORRECT ANSWER-
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D: The MSRB has regulatory authority over the U.S securities ma
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rkets and market participants in the trading of all exempt securitie
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s

Which of the following is an SRO?
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A: MSRB
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B: SEC
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C: SIPC
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D: FDIC - CORRECT ANSWER-A: MSRB
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,FINRA enforces regulations in all of the following markets EXCE
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PT:
A: First Market
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B: Second Market
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C: Third Market
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D: Futures Market - CORRECT ANSWER-D: Futures Market
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Who does NOT have to be licensed in a broker-dealer?
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A: President
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B: Equity trader
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C: ACATS clerk
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D: Sales individual - CORRECT ANSWER-C: ACATS clerk
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Who does NOT have to be licensed in a broker-dealer?
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A: Chief Executive Officer
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B: Partner who only provides capital
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C: Chief Financial Officer
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D: Sales individual - CORRECT ANSWER-
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B: Partner who only provides capital
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Which statement is TRUE regarding compensation?
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A: Broker-Dealers earn fees for rendering advice
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B: Investment Advisers earn commissions for executing transacti
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ons
C: Investment Advisers earn mark-ups for executing transactions
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D: Broker-Dealers earn commissions for executing transactions -
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CORRECT ANSWER-D: Broker-
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Dealers earn commissions for executing transactions
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To take a second job, under FINRA rules, a registered representa
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tive must obtain prior written approval from (the):
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A: FINRA
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B: SEC
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C: Branch Manager
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D: Financial and Operations Principal - CORRECT ANSWER-
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C: Branch Manager
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, Which statement is TRUE about a registered representative who
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wishes to take a second job under FINRA rules?
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A: This action is prohibited
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B: This action is permitted without restriction
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C: This action requires the prior written approval of FINRA
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D: This action requires the prior written approval of the member or
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ganization employer - CORRECT ANSWER- k k k k


D: This action requires the prior written approval of the member or
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ganization employer k




A registered representative at a FINRA member firm has been el
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ected to his cooperative apartment building's Board of Directors.
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Which statement is TRUE? k k k


A: This event must be reported to FINRA
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B: This event must be reported to his or her employer
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C: This event must be reported to both FINRA and his or her empl
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oyer
D: No report is required to either FINRA or the employing member
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firm - CORRECT ANSWER-
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B: This event must be reported to his or her employer
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A registered representative has done fund raising and charitable
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work for a not-for-
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profit hospital for many years and has just been invited to join the
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hospital's Board of Directors. She will get no compensation for thi
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s. Does she have to get permission of her broker-
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dealer to do this? k k k


A: No, because it is charitable work
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B: No, because she has been fund raising for the hospital for man
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y years
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C: No, because she is not being compensated
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D: Yes, because this is an outside business activity -
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CORRECT ANSWER-
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D: Yes, because this is an outside business activity
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A registered representative wants to form a Limited Liability Com
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pany (LLC) to start investing in commercial property. The other o
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