SERIES 53 TEST QUESTIONS AND VERIFIED
ANSWERS
SEC Act 1933 - ANSWER municipal and governments exempt from
registration and prospectus requirements, but bound by the antifraud rules
Securities Acts Amendments of 1975 - ANSWER amended SEC Act of 1934
requiring dealers that participated in munis be registered with the SEC and
created MSRB. 21 members now of board, 11 non muni dealer affiliations, 10
who are associated.
MSRB Fees - ANSWER initial fee, annual fee, fee based on volume,
assessment based on secondary market transactions and technology fee
MSRB Rule Making - ANSWER rule proposals allow for public comment for
up to 60 days and usually subject to approval by SEC before becoming effective
MSRB Rule Enforcement - ANSWER MSRB does not enforce the rules.
FINRA and SEC (mostly FINRA) and for dealer banks it's the Comptroller of
the Currency, Fed Reserve, FDIC
MSRB Rules Governance - ANSWER muni securities activities of firms
whether the business is conducted on a principal or an agency basis (dealer or
broker)
Period Exams - ANSWER Done at least 1 out of every 4 calendar years and
usually associated with a normally scheduled FINRA, OCC, FRB or FDIC
exam)
SEC Act 1934 - ANSWER both muni securities broker/dealers and dealer
banks must register with the SEC
Initial MSRB Registration Fee - ANSWER $1,000, and must be accompanied
with a written statement giving name, address, SEC registration number.
Increase effective 10/1/15
,MSRB Annual Fee - ANSWER $1,000, paid no later than 10/31 of the fiscal
year for which the fee is paid, increase was effective 10/1/15
MSRB Change of Status - ANSWER must notify the Board of the change (that
it is ceasing to become a muni broker or dealer)
Separately Identifiable Department - ANSWER a muni dealer which is a bank,
required to file form MSD, and refers to a unit of the bank that conducts
"municipal securities dealer activities"
2 conditions met to be considered separately identifiable - ANSWER 1. Must
be a unit that is under direct supervision of an officer or officers of the bank
who are responsible for the day to day conduct of the Bank's municipal
securities dealer activities.
2. All the records relating to the banks muni securities dealer activities must be
maintained separately or separately extractable from all the other records of the
bank. Must be accessible to allow for independent exams and enforcement
provisions of the securities acts and MSRB rules
Activities of the Bank which constitute muni securities activities - ANSWER
1. Underwriting, trading, and sales of munis
2. Providing financial advisory and consultant services for issuers in connection
with the issuance of munis
3. Processing and clearing activities with respect to munis
4. Providing research and inv advice with respect to munis.
5. Communicating, directly or indirectly, with public investors in munis
6. Maintaining records pertaining to the above activities
Associated persons - ANSWER a person employed by a dealer-bank or firm
who is directly engaged in the management, direction, supervision, or
performance of any of the muni dealers activities, such as underwriters, traders,
sales, analysts, or anyone who communicates with the public or anyone in a
supervisory capacity...does not include clerical or ministerial positions
MSRB Exam Qualifications - ANSWER wait 30 days if fail, and if fail 3 times
in a row, wait 6 months
,Associated Persons Information - ANSWER 1. Personal and business history
for at least preceding 10 years on file
2. Each firm must verify the information provided by the associated person with
all former employers for a period of 3 years immediately preceding the person's
association with the new firm, each MSRB firm that is contacted must respond
within 10 business days following the request.
3. Residential address for previous 5 years
4. Record of any disciplinary actions taken.
5. Aliases
6. Any felony convictions in prior 10 years
Form U4 is filed for associated persons at muni firms, for dealer banks its called
Form U10.
7. Must keep associated persons' questionnaire for at least 3 yrs after that person
leaves the firm.
5 classifications of associated persons - ANSWER 1. Municipal Securities
Representative
2. Municipal Securities Principal
3. Financial and Operations Principal
4. Municipal Securities Sales Principal
5. Municipal Fund Securities Principal
Municipal Securities Representative - ANSWER one who performs the
fundamental activities essential to the muni securities industry such as
underwriting, trading, selling, acting as FA, providing research, or
communicating directly or indirectly with the public.
Must pass Series 52 within 180 days. Passed Series 7 prior to 11/7/11, they
would qualify as Muni Sec. Rep. A muni securities rep is limited to doing only
munis, but NOT muni mutual funds or muni UITs.
Municipal Securities Sales Limited Rep - ANSWER If series 7 after 11/7/11,
then this person is a Limited Rep and may only be allowed to engage in sales to
and purchases from customers in munis. If a series 7 person wanted to enter into
non sales related activities (such as trading and underwriting), he/she would
need to pass the series 52.
, Municipal Securities Principal - ANSWER Directly engaged in the
management, direction and supervision of one or more of the following
activities:
1. Underwriting, trading, or selling munis
2. Reviewing accts, new act forms, transactions
3. Providing FA or consulting services in connection w munis
4. Processing, clearing munis and safekeeping of munis
5. Providing research or inv advice for munis
6. Communications regarding munis to public
7. Maintaining, enforcing, updating at least annually supervisory procedures
8. Maintaining records
9. Training muni securities reps
Must pass Series 53, prerequisite of 52 or 7.
Principal grace period of 90 days
Municipal Securities Sales Principal - ANSWER Associated person with a
muni securities dealer or broker who supervises the handling of the customer
acts and related activities
1. Approving transactions with customers
2. Approving the opening of customer acts
3. Approving discretionary acts and related transactions
4. Reviewing all customer acts regularly
5. Supervising the handling of written customer complaints
6. Reviewing correspondence regarding solicitation of sec transactions...but not
advertising
MAY NOT supervise trading, underwriting, research, or FA
Must pass 52 or 7 and then take the 9 and 10, FINRA requires the 7
Municipal Fund Securities Limited Principal - ANSWER generally acts as the
same as municipal securities principal, but limited to municipal fund
activities/securities only. Complete the series 51, but must have a 24 or 26 prior
to taking
Min number of Principals - ANSWER min of 2 unless member of FINRA or
exchange, then only 1. If fewer than 11 associated persons engaging in muni
ANSWERS
SEC Act 1933 - ANSWER municipal and governments exempt from
registration and prospectus requirements, but bound by the antifraud rules
Securities Acts Amendments of 1975 - ANSWER amended SEC Act of 1934
requiring dealers that participated in munis be registered with the SEC and
created MSRB. 21 members now of board, 11 non muni dealer affiliations, 10
who are associated.
MSRB Fees - ANSWER initial fee, annual fee, fee based on volume,
assessment based on secondary market transactions and technology fee
MSRB Rule Making - ANSWER rule proposals allow for public comment for
up to 60 days and usually subject to approval by SEC before becoming effective
MSRB Rule Enforcement - ANSWER MSRB does not enforce the rules.
FINRA and SEC (mostly FINRA) and for dealer banks it's the Comptroller of
the Currency, Fed Reserve, FDIC
MSRB Rules Governance - ANSWER muni securities activities of firms
whether the business is conducted on a principal or an agency basis (dealer or
broker)
Period Exams - ANSWER Done at least 1 out of every 4 calendar years and
usually associated with a normally scheduled FINRA, OCC, FRB or FDIC
exam)
SEC Act 1934 - ANSWER both muni securities broker/dealers and dealer
banks must register with the SEC
Initial MSRB Registration Fee - ANSWER $1,000, and must be accompanied
with a written statement giving name, address, SEC registration number.
Increase effective 10/1/15
,MSRB Annual Fee - ANSWER $1,000, paid no later than 10/31 of the fiscal
year for which the fee is paid, increase was effective 10/1/15
MSRB Change of Status - ANSWER must notify the Board of the change (that
it is ceasing to become a muni broker or dealer)
Separately Identifiable Department - ANSWER a muni dealer which is a bank,
required to file form MSD, and refers to a unit of the bank that conducts
"municipal securities dealer activities"
2 conditions met to be considered separately identifiable - ANSWER 1. Must
be a unit that is under direct supervision of an officer or officers of the bank
who are responsible for the day to day conduct of the Bank's municipal
securities dealer activities.
2. All the records relating to the banks muni securities dealer activities must be
maintained separately or separately extractable from all the other records of the
bank. Must be accessible to allow for independent exams and enforcement
provisions of the securities acts and MSRB rules
Activities of the Bank which constitute muni securities activities - ANSWER
1. Underwriting, trading, and sales of munis
2. Providing financial advisory and consultant services for issuers in connection
with the issuance of munis
3. Processing and clearing activities with respect to munis
4. Providing research and inv advice with respect to munis.
5. Communicating, directly or indirectly, with public investors in munis
6. Maintaining records pertaining to the above activities
Associated persons - ANSWER a person employed by a dealer-bank or firm
who is directly engaged in the management, direction, supervision, or
performance of any of the muni dealers activities, such as underwriters, traders,
sales, analysts, or anyone who communicates with the public or anyone in a
supervisory capacity...does not include clerical or ministerial positions
MSRB Exam Qualifications - ANSWER wait 30 days if fail, and if fail 3 times
in a row, wait 6 months
,Associated Persons Information - ANSWER 1. Personal and business history
for at least preceding 10 years on file
2. Each firm must verify the information provided by the associated person with
all former employers for a period of 3 years immediately preceding the person's
association with the new firm, each MSRB firm that is contacted must respond
within 10 business days following the request.
3. Residential address for previous 5 years
4. Record of any disciplinary actions taken.
5. Aliases
6. Any felony convictions in prior 10 years
Form U4 is filed for associated persons at muni firms, for dealer banks its called
Form U10.
7. Must keep associated persons' questionnaire for at least 3 yrs after that person
leaves the firm.
5 classifications of associated persons - ANSWER 1. Municipal Securities
Representative
2. Municipal Securities Principal
3. Financial and Operations Principal
4. Municipal Securities Sales Principal
5. Municipal Fund Securities Principal
Municipal Securities Representative - ANSWER one who performs the
fundamental activities essential to the muni securities industry such as
underwriting, trading, selling, acting as FA, providing research, or
communicating directly or indirectly with the public.
Must pass Series 52 within 180 days. Passed Series 7 prior to 11/7/11, they
would qualify as Muni Sec. Rep. A muni securities rep is limited to doing only
munis, but NOT muni mutual funds or muni UITs.
Municipal Securities Sales Limited Rep - ANSWER If series 7 after 11/7/11,
then this person is a Limited Rep and may only be allowed to engage in sales to
and purchases from customers in munis. If a series 7 person wanted to enter into
non sales related activities (such as trading and underwriting), he/she would
need to pass the series 52.
, Municipal Securities Principal - ANSWER Directly engaged in the
management, direction and supervision of one or more of the following
activities:
1. Underwriting, trading, or selling munis
2. Reviewing accts, new act forms, transactions
3. Providing FA or consulting services in connection w munis
4. Processing, clearing munis and safekeeping of munis
5. Providing research or inv advice for munis
6. Communications regarding munis to public
7. Maintaining, enforcing, updating at least annually supervisory procedures
8. Maintaining records
9. Training muni securities reps
Must pass Series 53, prerequisite of 52 or 7.
Principal grace period of 90 days
Municipal Securities Sales Principal - ANSWER Associated person with a
muni securities dealer or broker who supervises the handling of the customer
acts and related activities
1. Approving transactions with customers
2. Approving the opening of customer acts
3. Approving discretionary acts and related transactions
4. Reviewing all customer acts regularly
5. Supervising the handling of written customer complaints
6. Reviewing correspondence regarding solicitation of sec transactions...but not
advertising
MAY NOT supervise trading, underwriting, research, or FA
Must pass 52 or 7 and then take the 9 and 10, FINRA requires the 7
Municipal Fund Securities Limited Principal - ANSWER generally acts as the
same as municipal securities principal, but limited to municipal fund
activities/securities only. Complete the series 51, but must have a 24 or 26 prior
to taking
Min number of Principals - ANSWER min of 2 unless member of FINRA or
exchange, then only 1. If fewer than 11 associated persons engaging in muni
