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
In order for an issuer to qualify for a "safe harbor" under SEC Rule 168,
factual or forward-looking information disclosure is: - correct answer ✔The
rule permits these disclosures anytime - as long as they are not being made in
connection with a securities offering and as long as they are being made in
the regular, normal fashion in which prior similar disclosures were made.
Under the FINRA Review of the Committee on Corporate Financing, finders
may be compensated in a new issue offering with all of the following EXCEPT:
- correct answer ✔The Committee on Corporate Financing requires that any
stock acquired by an underwriter or other parties involved in the underwriting
(such as finders, accountants, lawyers) in connection with a new issue
offering, be restricted for 6 months. This means that the stock cannot be
transferred (sold). Thus, the stock is not freely transferable. It is acceptable
under the Committee's rules to give options, cheap stock, or a fee to finders,
accountants, and lawyers involved in the offering.
A WKSI that is registering securities under Rule 405 would pay SEC
registration fees on a(n): - correct answer ✔Under the automatic shelf
registration rule (SEC Rule 405), rather than paying the registration fee in
advance of actually issuing securities, issuers are permitted to use a "pay-as-
you-go" basis.
In order to recommend a variable annuity to a customer, which statements are
TRUE? - correct answer ✔Consider this to be a learning question. All of the
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
In order for an issuer to qualify for a "safe harbor" under SEC Rule 168,
factual or forward-looking information disclosure is: - correct answer ✔The
rule permits these disclosures anytime - as long as they are not being made in
connection with a securities offering and as long as they are being made in
the regular, normal fashion in which prior similar disclosures were made.
Under the FINRA Review of the Committee on Corporate Financing, finders
may be compensated in a new issue offering with all of the following EXCEPT:
- correct answer ✔The Committee on Corporate Financing requires that any
stock acquired by an underwriter or other parties involved in the underwriting
(such as finders, accountants, lawyers) in connection with a new issue
offering, be restricted for 6 months. This means that the stock cannot be
transferred (sold). Thus, the stock is not freely transferable. It is acceptable
under the Committee's rules to give options, cheap stock, or a fee to finders,
accountants, and lawyers involved in the offering.
A WKSI that is registering securities under Rule 405 would pay SEC
registration fees on a(n): - correct answer ✔Under the automatic shelf
registration rule (SEC Rule 405), rather than paying the registration fee in
advance of actually issuing securities, issuers are permitted to use a "pay-as-
you-go" basis.
In order to recommend a variable annuity to a customer, which statements are
TRUE? - correct answer ✔Consider this to be a learning question. All of the
