Series 24 Databank - FINAL 1
The Corporate Financing Rule allows an issuer of securities that are "hot" to direct sales of that issue to
which of the following persons? - correct answer ✔✔However, new issues, whether "hot" or not, cannot
be purchased by employees or officers of FINRA member firms, unless these individuals are also
employees or officers of the issuer whose shares are being sold through the IPO.
If a member firm changes its designated principal responsible for overseeing the firm's AML program: -
correct answer ✔✔If the designated principal responsible for overseeing the member firm's AML (Anti-
Money Laundering) program is changed, FINRA must be notified promptly, but no later than 30 days
after the change. This is done through the FINRA Contact System.
Notification to the SEC is required for all of the following reasons - correct answer ✔✔FINRA and the SEC
must be notified in writing within 15 business days if the accountant resigns, is terminated, or if a new
accountant is hired. Written notice is also required if the financial statements will be filed late. There is
no requirement for written notification if the accountant renders an unqualified opinion on the financial
statements (as a result of the annual audit).
Violations of the net capital rule occur if the broker-dealer's: - correct answer ✔✔Net Capital falls below
the minimum; or
Ratio of Aggregate Indebtedness to Net Capital exceeds 1,500% after the first year or 800% during the
first year of operations; or
Ratio of subordinated debt to total capital exceeds 70% for over 90 days.
Which of the following individuals associated with a member firm MUST be registered with FINRA as
principals? - correct answer ✔✔FINRA requires managers of Branch Offices, managers of Offices of
Supervisory Jurisdiction and officers of the firm to be registered as principals. (Also note that for very
small offices, FINRA permits a non-resident branch manager to supervise these locations, with functions
delegated to a registered representative in the small branch, but the BOM is still responsible for
supervision.)
A live road show presented in connection with a Rule 405 Automatic Shelf Registered Offering is: -
correct answer ✔✔considered to be neither a graphic communication nor a free writing prospectus
The Corporate Financing Rule allows an issuer of securities that are "hot" to direct sales of that issue to
which of the following persons? - correct answer ✔✔However, new issues, whether "hot" or not, cannot
be purchased by employees or officers of FINRA member firms, unless these individuals are also
employees or officers of the issuer whose shares are being sold through the IPO.
If a member firm changes its designated principal responsible for overseeing the firm's AML program: -
correct answer ✔✔If the designated principal responsible for overseeing the member firm's AML (Anti-
Money Laundering) program is changed, FINRA must be notified promptly, but no later than 30 days
after the change. This is done through the FINRA Contact System.
Notification to the SEC is required for all of the following reasons - correct answer ✔✔FINRA and the SEC
must be notified in writing within 15 business days if the accountant resigns, is terminated, or if a new
accountant is hired. Written notice is also required if the financial statements will be filed late. There is
no requirement for written notification if the accountant renders an unqualified opinion on the financial
statements (as a result of the annual audit).
Violations of the net capital rule occur if the broker-dealer's: - correct answer ✔✔Net Capital falls below
the minimum; or
Ratio of Aggregate Indebtedness to Net Capital exceeds 1,500% after the first year or 800% during the
first year of operations; or
Ratio of subordinated debt to total capital exceeds 70% for over 90 days.
Which of the following individuals associated with a member firm MUST be registered with FINRA as
principals? - correct answer ✔✔FINRA requires managers of Branch Offices, managers of Offices of
Supervisory Jurisdiction and officers of the firm to be registered as principals. (Also note that for very
small offices, FINRA permits a non-resident branch manager to supervise these locations, with functions
delegated to a registered representative in the small branch, but the BOM is still responsible for
supervision.)
A live road show presented in connection with a Rule 405 Automatic Shelf Registered Offering is: -
correct answer ✔✔considered to be neither a graphic communication nor a free writing prospectus
