Financial Industry Regulatory Authority (FINRA) Exam 54
Questions with Verified Answers
A registered representative with ABC Securities, a FINRA member broker/dealer,
terminates his registration and affiliates with XYZ Securities, another FINRA
member broker/dealer. Which of the following statements is CORRECT? -
CORRECT ANSWER Continuing commissions on clients remaining with ABC can be
paid to the registered representative if it is in the representative's contract.
As long as the new affiliation takes place within two years of the termination,
there would not be a requirement to re-qualify by examination.
Continuing commissions may be paid on business that "continues" to accrue at
the initial B/D as long as it is in the employee's contract. There is a two-year limit
on re-registering without need to re-take the exam. It would be a prohibited
practice to remove files from the office and there is nothing to stop the
representative's clients from changing their B/D of record to the new firm
FINRA was established to - CORRECT ANSWER encourage just and equitable
principles of trade.
adopt and enforce its Conduct Rules among brokers and dealers.
Which of the following statements about FINRA are TRUE? - CORRECT ANSWER It
has authority to regulate the OTC market in nonexempt securities.
All branch offices of a member broker/dealer must be registered with FINRA.
Firms transacting business in the over-the-counter market and/or members of the
New York Stock Exchange must register with the SEC and are eligible for
membership in FINRA. If a broker/dealer is a member, each branch office of the
broker/dealer must be registered with FINRA. Not all broker/dealers are required
to be FINRA members, and they may also hold membership in other exchanges.
Which of the following changes to a U-4 form must be communicated to the
registered representative's broker/dealer and to FINRA? - CORRECT ANSWER
Bankruptcy
The broker/dealer and FINRA must be notified if a registered representative files
for bankruptcy; the other occurrences listed do not require FINRA notification
, If a FINRA member firm suspends a registered representative, the firm must
report the suspension to: - CORRECT ANSWER FINRA.
The firm must report the suspension to its designated examining authority (DEA),
in this case, the Financial Industry Regulatory Authority (FINRA).
A change to which of the following items requires amending the Form U-4? -
CORRECT ANSWER A home address change requires an amendment to Form U-4.
A change to the member firm's address requires the firm to amend its Form BD,
but not the representative's Form U-4. Marital status and vacation home address
are not items of information on Form U-4.
FINRA fees paid by a member firm are based on which of the following - CORRECT
ANSWER FINRA fees are determined by the number of registered representatives,
principals, and branch offices registered with FINRA.
Regarding offices of FINRA member firms, which of the following statements is
CORRECT - CORRECT ANSWER All member firms must have at least one OSJ,
managed by at least one resident principal. All branch offices must be registered
with FINRA and may be managed by a principal or qualified registered rep.
Which of the following are among the purposes and objectives of FINRA -
CORRECT ANSWER To promote self-discipline among members
To investigate and adjust grievances between members.
FINRA is the self-regulatory organization (SRO) for the over-the-counter markets
and for NYSE members. It enforces the Conduct Rules, provides mediation and
arbitration services, and promotes self-discipline among members, all with the
end in view of protecting the investing public
To which of the following persons may a broker/dealer pay commissions under a
continuing commission contract? - CORRECT ANSWER A FINRA member firm may
continue to pay commissions to either a retired employee or a former employee's
widowed spouse if a prior written contract exists. Commissions may be paid only
on business generated while employed.
Questions with Verified Answers
A registered representative with ABC Securities, a FINRA member broker/dealer,
terminates his registration and affiliates with XYZ Securities, another FINRA
member broker/dealer. Which of the following statements is CORRECT? -
CORRECT ANSWER Continuing commissions on clients remaining with ABC can be
paid to the registered representative if it is in the representative's contract.
As long as the new affiliation takes place within two years of the termination,
there would not be a requirement to re-qualify by examination.
Continuing commissions may be paid on business that "continues" to accrue at
the initial B/D as long as it is in the employee's contract. There is a two-year limit
on re-registering without need to re-take the exam. It would be a prohibited
practice to remove files from the office and there is nothing to stop the
representative's clients from changing their B/D of record to the new firm
FINRA was established to - CORRECT ANSWER encourage just and equitable
principles of trade.
adopt and enforce its Conduct Rules among brokers and dealers.
Which of the following statements about FINRA are TRUE? - CORRECT ANSWER It
has authority to regulate the OTC market in nonexempt securities.
All branch offices of a member broker/dealer must be registered with FINRA.
Firms transacting business in the over-the-counter market and/or members of the
New York Stock Exchange must register with the SEC and are eligible for
membership in FINRA. If a broker/dealer is a member, each branch office of the
broker/dealer must be registered with FINRA. Not all broker/dealers are required
to be FINRA members, and they may also hold membership in other exchanges.
Which of the following changes to a U-4 form must be communicated to the
registered representative's broker/dealer and to FINRA? - CORRECT ANSWER
Bankruptcy
The broker/dealer and FINRA must be notified if a registered representative files
for bankruptcy; the other occurrences listed do not require FINRA notification
, If a FINRA member firm suspends a registered representative, the firm must
report the suspension to: - CORRECT ANSWER FINRA.
The firm must report the suspension to its designated examining authority (DEA),
in this case, the Financial Industry Regulatory Authority (FINRA).
A change to which of the following items requires amending the Form U-4? -
CORRECT ANSWER A home address change requires an amendment to Form U-4.
A change to the member firm's address requires the firm to amend its Form BD,
but not the representative's Form U-4. Marital status and vacation home address
are not items of information on Form U-4.
FINRA fees paid by a member firm are based on which of the following - CORRECT
ANSWER FINRA fees are determined by the number of registered representatives,
principals, and branch offices registered with FINRA.
Regarding offices of FINRA member firms, which of the following statements is
CORRECT - CORRECT ANSWER All member firms must have at least one OSJ,
managed by at least one resident principal. All branch offices must be registered
with FINRA and may be managed by a principal or qualified registered rep.
Which of the following are among the purposes and objectives of FINRA -
CORRECT ANSWER To promote self-discipline among members
To investigate and adjust grievances between members.
FINRA is the self-regulatory organization (SRO) for the over-the-counter markets
and for NYSE members. It enforces the Conduct Rules, provides mediation and
arbitration services, and promotes self-discipline among members, all with the
end in view of protecting the investing public
To which of the following persons may a broker/dealer pay commissions under a
continuing commission contract? - CORRECT ANSWER A FINRA member firm may
continue to pay commissions to either a retired employee or a former employee's
widowed spouse if a prior written contract exists. Commissions may be paid only
on business generated while employed.
