Series 24 - Unit 5 - Supervision of
Brokerage Office Operations
The UPC (Uniform Practice Code) of FINRA was created to set rules for
dealer-to-dealer transactions in the ____ market. - correct answer ✔OTC
The UPC Code applies only to _____ securities - correct answer
✔nonexempt
Does not apply to transactions ...
- executed on an exchange floor,
- in exempt securities,
- in redeemable investment company securities such as mutual funds,
- settled outside the U.S.
Settlement Rules...
- Equity,
- Corporates, munis & agencies,
- Treasuries (all maturities),
- Equity options,
- Index options,
- Cash settlement - correct answer ✔- Equity: 3 business days,
- Corporates, etc.: 3 business days,
- Treasuries: next business day,
- Equity options: next business day,
- Index options: next business day,
- Cash settlement: same day (b4 2:30 pm)
, If a member wants to have a trade nullified or adjusted, it must notify Nasdaq
Market Operations within ____ of the execution.
- Initial notification is made to Nasdaq Market Operations.
- Appeals must be made to the Market Operations Review Committee
(MORC)
- the decisions of MORC are final and binding. - correct answer ✔30 minutes
For round lot sales of common stock delivery must be made in denominations
that add up to ___ shares or are divisible by ____ shares. - correct answer
✔100 shares, 100 shares
Ask yourself; can you take the certificates and make stacks of 100 shares? If
the answer is yes, it's good delivery.
Dividends; order of dividend distribution dates is helped by DERP... - correct
answer ✔- D: declaration date,
- E: ex-date,
- R: record date
- P: payment date
DRP - all determined by board of directors
E - determined by FINRA or exchange
For regular way trades, the ex-date is ___ business days ___ to the record
date. - correct answer ✔2, prior
Buy-Ins; if securities not delivered to the buying member on settlement, buyer
may close out the position NO EARLIER THAN... - correct answer ✔3rd
business day following settlement date
Brokerage Office Operations
The UPC (Uniform Practice Code) of FINRA was created to set rules for
dealer-to-dealer transactions in the ____ market. - correct answer ✔OTC
The UPC Code applies only to _____ securities - correct answer
✔nonexempt
Does not apply to transactions ...
- executed on an exchange floor,
- in exempt securities,
- in redeemable investment company securities such as mutual funds,
- settled outside the U.S.
Settlement Rules...
- Equity,
- Corporates, munis & agencies,
- Treasuries (all maturities),
- Equity options,
- Index options,
- Cash settlement - correct answer ✔- Equity: 3 business days,
- Corporates, etc.: 3 business days,
- Treasuries: next business day,
- Equity options: next business day,
- Index options: next business day,
- Cash settlement: same day (b4 2:30 pm)
, If a member wants to have a trade nullified or adjusted, it must notify Nasdaq
Market Operations within ____ of the execution.
- Initial notification is made to Nasdaq Market Operations.
- Appeals must be made to the Market Operations Review Committee
(MORC)
- the decisions of MORC are final and binding. - correct answer ✔30 minutes
For round lot sales of common stock delivery must be made in denominations
that add up to ___ shares or are divisible by ____ shares. - correct answer
✔100 shares, 100 shares
Ask yourself; can you take the certificates and make stacks of 100 shares? If
the answer is yes, it's good delivery.
Dividends; order of dividend distribution dates is helped by DERP... - correct
answer ✔- D: declaration date,
- E: ex-date,
- R: record date
- P: payment date
DRP - all determined by board of directors
E - determined by FINRA or exchange
For regular way trades, the ex-date is ___ business days ___ to the record
date. - correct answer ✔2, prior
Buy-Ins; if securities not delivered to the buying member on settlement, buyer
may close out the position NO EARLIER THAN... - correct answer ✔3rd
business day following settlement date
