FINRA Exam Study Guide with Complete Solutions

FINRA Exam Study Guide with Complete Solutions SEC Rule 17a-5(d)(1)(i) - ️️ Correct-requires every broker or dealer registered to file a certified annual audit no later than 60 calendar days from their designated fiscal year end A completed SEC form X-17A-5, Part III, - ️️ Correct-Document used to identify annual audit reports & must accompany the annual audit. The form contains space for a firm's name and address, the name and address of an accountant, the oath or affirmation, and a checklist of items included in the report. Filing this report that they can receive confidential treatment for all parts other than the statement of financial condition. Member firms desiring such confidential treatment should review the provisions of subparagraph (e)(3) of SEC Rule 17a-5. Any portion that you wish to be treated as confidential should be bound separately from the statement of financial condition. 2 copies of the audited report must be filed with the Principal Office of the SEC in Washington, DC, one copy to the appropriate Regional/District Office of the SEC, and one copy to FINRA submitted through the Firm Gateway annual audit electronic TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 2/11 submission interface. The audit must be submitted to FINRA in Portable Document Format (PDF). Extension request need to be done in writing Rule 4530 - ️️ Correct-requires firms to report to FINRA certain specified events and quarterly statistical and summary information regarding written customer complaints. FINRA Rule 4530 was modeled after NASD Rule 3070 and NYSE Rule 351. Any matter that becomes subject to reporting or filing prior to July 1, 2011, must be reported or filed in accordance with the requirements of NASD Rule 3070 and NYSE Rule 351, as applicable, including the reporting and filing deadlines of those rules. Any matter that becomes subject to reporting or filing on or after July 1, 2011, must be reported or filed in accordance with the requirements of FINRA Rule 4530 Report no later than 30 calendar days after the firm knows or should have known of their existence. Must report within 30 calendar days after the firm has concluded, or reasonably should have concluded, on its own that the firm or an associated person of the firm has violated any securities-, insurance-, commodities-, financial- or investment-related laws, rules, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 3/11 regulations or standards of conduct of any domestic or foreign regulatory body or self- regulatory organization. The statistical and summary information regarding customer complaints is due quarterly by the 15th calendar day from the end of the quarter. Must be filed electronically via the Regulatory Filings Application on the FINRA Firm Gateway Short Interest Reporting - ️️ Correct-New Exchange/Market Code for Reporting Short Interest Positions Effective December 15, 2011, FINRA's Web-based Regulation Filing Applications (RFA) will include a new exchange/market code "H" for reporting short interest positions in securities listed on the BATS Exchange firms must report short interest positions in all securities—including NASDAQ, NYSE, NYSE Amex, NYSE Arca and OTC equity securities—through a single source on a bi- monthly basis: FINRA's Web-based Regulation Filing Applications (RFA) system Blue Sheets - ️️ Correct-Blue sheets provide the SEC with detailed information about trades performed by a firm and its clients. The information includes the security's name, the date traded, price, transaction size and a list of the parties involved. TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 4/11 The questionnaires came to be known as blue sheets because they were printed on blue paper. Today, due to the high volumes of trades, this information is provided electronically though electronic blue sheet systems or EBS. Advertising Regulation Electronic Files - ️️ Correct-Advertising Regulation Electronic Files (AREF) is a Web-based application that enables FINRA member firms to file communications with the public for review by FINRA's Advertising Regulation Department (Department). In addition, members may use AREF to view, print, and save Department letters about communications filed for review. Members may also access real time filing fee information via AREF. Regulation M Filings - ️️ Correct-Designed to prevent manipulation by individuals with an interest in the outcome of an offering, and prohibits activities and conduct that could artificially influence the market for an offered security. FINRA's Market Regulation Department reviews over-the-counter trading and quoting activity for prohibited purchases, bids or attempts to induce bids or purchases during the applicable restricted period, and for prohibited short sales during the five-day period prior to pricing the offering. Per FINRA rules, firms must provide FINRA with pertinent distribution-related information in a timely fashion to facilitate this component of its Regulation M compliance program. TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 5/11 Filed electronically Regulation T - ️️ Correct-Regulation T and SEC Rule 15c3-3 provide for the possibility of extensions of credit by broker-dealers to investors when they have not promptly paid for a securities transaction. Specifically, Regulation T gives an investor a maximum of five business days to pay for securities purchased in a cash or margin account. If payment due exceeds $1,000 and is not received by the end of this time period, the broker-dealer must either liquidate the position or apply for and receive an extension from its designated examining authority, such as FINRA. SEC Rule 15c3-3 pertains to a customer's obligations when securities are sold, other than short sales. The rule requires that if a security sold long has not been delivered within 10 business days after the settlement date, the broker-dealer must either buy the customer in, or apply for and receive an extension from its designated examining authority. Firms must file Regulation T and SEC Rule 15c3-3 extension of time requests via FINRA's Regulatory Extension (REX) system (formerly known as the Reg T application) TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 6/11 Reminder for Clearing Firms: Clearing firms have obligations under the Net Capital Rule relative to Regulation T and outstanding deposits and/or margin, as described in SEC Rule 15c3-1 (c) (2) (iv) (B). In addition, if a customer fails to meet his/her responsibilities to deliver a security and that failure results in a clearing firm fail-to-deliver, the Net Capital Rule requires charges under certain conditions. These changes are outlined in SEC Rule 15c3-1 (c) (2) (ix). FINRA Rule 4311(h)(2) replaced NASD Rule 3230(c)(3) - ️️ Correct-Requires that each year, by no later than July 1, each clearing/carrying member firm notify in writing the introducing/correspondent member firm's chief executive and compliance officers of the reports offered to the introducing member firm pursuant to 4311(h)(1) and the reports requested by or supplied to the introducing member firm as of such date. Rule 4311(h)(2) also requires the clearing member firm to provide to the introducing member firm's DEA a copy of both the notice of available reports and the list of reports requested by or supplied to the introducing member firm. The same process is required by NYSE Rule 382. Submission in electronic format, such as Adobe PDF, is requested. Regulatory Financial Notifications Rule 15c3-1(e) - ️️ Correct-Withdrawals of equity capital Regulatory Financial Notifications Rule 15c3-3(i) - ️️ Correct-Special Reserve Bank Account Rule 17a-4(f)(2)(i) TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD OWNER: EMILLYCHARLOTTE COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED FIRST PUBLISHED: SEPTEMBER 2024 7/11 Rule 17a-4(f)(3)(vii - ️️ Correct-Electronic storage media Rule 17a-5(f)(4) - ️️ Correct-Replacement of Accountant Rule 17a-11(b) - ️️ Correct-Net Capital Deificiency Rule 17a-11(c)(1) - ️️ Correct-Aggregate indebtedness is in excess of 1,200 percent of net capital Rule 17a-11(c)(2) - ️️ Correct-Net capital is less than 5 percent of aggregate debit items Rule 17a-11(c)(3) - ️️ Correct-Net capital is less than 120 percent of required minimum dollar amount Rule 17a-11(d) - ️️ Correct-Failure to make a