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What form is filed for FINRA membership? How long does it take to process? What fees are associated?
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Series 26
Series 26 - Hiring and Qualifications
| Question | Answer |
|---|---|
| Branch Office Registration | Form BR - electronically, within 30 days of opening |
| What form is filed for FINRA membership? How long does it take to process? What fees are associated? | Form BD - A. will be processed within 180 calendar days B. Will pay membership fee AND separate annual assessment based on gross income generated |
| Where is the membership interview conducted and what is the timeframe for additional information? | Conducted at the FINRA District Office ***if any additional info is needed before interview, will be requested within 30 days of received app - respondent has 60 days to provide info*** |
| What is an executive representative and what position must they hold? | Votes and acts for the member on FINRA matters - must be member of senior management or principal |
| When is FINRA required to inspect a newly registered broker/dealer? | Conducted within six months of member's registration to determine if they are operating in conformity with financial rules |
| What form is filed when a member is terminated, and when does it take place? | Form BD-W - filed electronically A. Will not take into effect until 30 days after receipt |
| If a member cancels their FINRA membership or it is revoked, how long does FINRA have jurisdiction? | 2 years |
| Investor Protection and Education - each member firm must annually provide the following: | -Statement as to availability of investor brochure that includes info describing Public Disclosure Program -FINRA Public Disclosure Program Hotline -FINRA website -BrokerCheck contact information |
| What would a member of AP have to do if they are seeking an Order of Expungement from the Web CRD? | Obtain an order from a court of competent jurisdiction, directing such expungement or confirming arbitration award containing expungement relief |
| Statutory Disqualification - Firm will be denied membership if application or any AP: | -Has been expelled/suspended by another SRO -Is subject to SEC order denying/suspending/revoking registration -Filed false or misleading application |
| Statutory Disqualification - Individual will be disqualified as applicant if the individual: | -Made willful misstatements of fact on app -Is subject to felony conviction -Has been suspended/expelled from another SRO or was cause of another BD's or AP's expulsion/suspension -Is under SEC order suspending/revoking registration |
| What are Forms MC-400 and MC-400A? | Used for eligibility proceedings that can, under certain circumstances, allow a person currently associated with a member but subject to SD OR a SD person applying for registration, to be permitted association with a member |
| What is the difference between Forms MC-400 and MC-400A, and what is the filing fee? | MC-400 is for individuals, MC-400A is for firms, filing fee is $1500 |
| Who renders the decision of allowing a SD person to be associated with a member, and who reviews and approves that? | Decision rendered by Department of Member Regulation, reviewed and approved by the NAC |
| If registration for a SD person is approved, FINRA examiners will conduct periodic examinations to ensure compliance. FINRA classifies individuals and members into 3 tiers with corresponding examination requirements. What are they? | 1. Tier I: most serious offenders, requires annual examination 2. Tier II: Disqualifying misconduct, conducted during FINRA's routine examinations of member firm 3. Tier II: no special supervision |
| What is the associated cost for supervision of an SD person when it is required? | -Tier I: $1500 annually -Tier II: $1000 annually -Tier III: no charge |
| What form would you still have to file if you wanted a SD person to be employed in a clerical position? | MC-400 |
| What are the requirements when registering an associated person? | -Sponsored by member firm -Principal must verify employment for past 3 years -Firm checks background to verify Form U4 |
| What information is required on the Form U4? | -Name, address, aliases -5-year residency history -10-year employment history (principal only verifies last 3) -Info on charges, arrests, convictions to any felony or misdemeanor relating to business |
| How long does one have to amend their U4 of any changes? What if it involves SD? | -30 days after member becomes aware of change -10 business days if it involves SD |
| How long does one have to submit a Form U5? | 30 upon termination |
| Define parking the license. | Trying to keep license active during period when it is not being used - prohibited by FINRA |
| What happens when a person goes on active military service? | A. Placed on inactive during deployment - unable to perform duties but can receive/share commission B. Not required to complete CE C. 90 days from completion of active service to reregister with member |
| What is the taping rule? | When a member hires a registered rep previously associated with a disciplined firm - may be required to establish procedures to monitor telemarketing activities - 60 days to put them in place, maintain for 3 years and send quarterly reports to FINRA |
| What is the criteria for the taping rule? | Level A - 5-9 reps employed, 40% or more Level B - 10-19 reps employed, 4 or more Level C - 20 reps employed, 20% or more |
| Persons Exempt from FINRA Registration | -Exclusively clerical duties -Not actively engaged in investment banking/securities activities -Have functions only relating to executing transactions in municipal securities/commodities |
| How must foreign associates register if they conduct all of their securities activities in areas outside the jurisdiction of the U.S. and do not engaged in these activities with any U.S. citizen? | Must be registered with FINRA but are exempt from having to pass qualification exam |
| What can a licensed Series 6 rep sell? | Mutual fund shares, UITs, Face Amounts, and closed-end investment company shares of IPOs only |
| What can a licensed Series 11 assistant rep do? | Provide quotes and process orders but not solicit transactions or new accounts, render investment advice, recommend, or effect transactions |
| What can a licensed Series 26 principal do and not do? | Can - supervise solicitation of investment company products and variable contracts sold by prospectus, review and approve advertising Cannot - supervise underwriting, trading, or market-making activities |
| What are the three characteristics of investment advisers according to the IA Act of 1940? | Provide investment advice, provide it as regular part of business, receive compensation specifically for that advice |
| Who is exempt from the definition of an investment adviser? | -Advisers who maintain offices in 1 state, clients are all in that state, and do not give advice on securities listed on any national exchange -Advisers whose clients are only insurance companies -Private fund advisers |
| A foreign advisor with no place of business in the United States who has fewer than ______ U.S. based clients and an AUM of less than _____ million is exempt from the definition of an investment adviser. | 15 clients, 25 million |
| Other than LATE, who is excluded from the definition of an investment adviser? | -Banks, bank holding companies -Publishers of newspapers that do not render specific advice and must not be published based on market events -BDs whose advice is incidental and no commission is received -Persons that advise solely on U.S. gov. sec.s |
| The following advisers must register with the SEC (federal level) according to the IA Act of 1940: | -Advisers with $110 mil or more in AUM -Advisers managing an investment company registered under the IA Act of 1940 |
| An investment adviser with $100 mil and lower in AUM registers at the _______ level. If already registered at the federal level, an adviser would not register at a state level under their AUM fell below _____ million. | State, 90 million |
| It is unlawful to use the term investment counsel unless: | The adviser's principal business consists of acting as investment adviser, and a substantial part of their business consists of rendering investment supervisory services |
| Define investment adviser representative. | Any partner, officer, director of investment adviser or any person directly/indirectly controlling or controlled by investment adviser except clerical |
| Investment adviser representatives must pass what qualifying exams? | Series 65 or 66 but not the 26. |
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