Series 24 flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Form BD

Uniform broker-dealer registration application filed through Web CRD; it must be amended within 30 days of any material change to the information it contains.

Form U5 deadline

Uniform termination notice for an associated person; it must be filed with CRD within 30 days after the person's association with the member firm ends.

Statutory disqualification

A registration bar arising from events such as a securities-related felony conviction, injunction, or SEC order entered within the past 10 years, unless relief is granted.

Regulatory Element timing

Computer-based continuing education due within 120 days of the second anniversary of registration and every three years thereafter; until completed, the representative's registration is inactive.

Firm Element training

Annual training for registered persons based on a written needs analysis covering relevant products, rules, and sales practices; it must be documented and delivered each year.

Minimum net capital

Rule 15c3-1 sets a $5,000 minimum for firms that receive but do not hold customer funds, and $250,000 for firms that carry customer accounts.

Form BR purpose

Registers each branch office through CRD; a branch is generally a non-residential location where one or more associated persons regularly conduct retail securities business.

Six-year retention rule

Rule 17a-4 requires most books and records to be kept six years with the first two years readily accessible; communications such as correspondence are kept three years.

Annual compliance meeting

FINRA Rule 3110 requires each registered representative to attend at least one meeting each year at which compliance matters relevant to the firm are discussed.

Business continuity plan

FINRA Rule 4370 requires a written plan naming a designated officer, addressing emergency scenarios, and reviewed and updated at least annually by the firm.

Gift limit rule

FINRA Rule 3220 limits gifts and gratuities to employees of other firms to $100 per person per year; business entertainment is excluded but must be reasonable and recorded.

Outside business activity notice

FINRA Rule 3270 requires an associated person to give the firm prior written notice before accepting outside employment or compensation so the activity can be supervised.

SAR filing deadline

A suspicious activity report must be filed with FinCEN within 30 days of initial detection, or within 60 days when no suspect has been identified.

AML program elements

FINRA requires a written AML program with a designated compliance officer, ongoing training, independent testing at least every 12 months, and customer identification procedures.

Form CRS

A short relationship summary that must be delivered to retail investors at the start of the relationship and again after any material change to its information.

Variable annuity principal review

FINRA Rule 2330 requires a principal to review and approve a deferred variable annuity application before submission, or within seven business days after submission to the insurer.

Trusted contact requirement

FINRA Rule 4512 requires reasonable efforts to obtain the name and contact information of a trusted contact person for every natural-person customer account.

Exploitation hold period

FINRA Rule 2165 permits a temporary hold on disbursements when financial exploitation is reasonably suspected, for 15 business days, extendable once by 10 business days.

Rule 10b-10 confirmation

Requires a written confirmation at or before settlement disclosing the firm's capacity, its remuneration, and whether it received payment for order flow on the transaction.

Account record updates

Rule 17a-3 customer account records must be updated at least every 36 months, and a principal must approve an options account before the first options transaction.

Statement frequency

FINRA Rule 2231 requires customer account statements at least quarterly, and monthly for accounts with activity during the month, sent to the customer's designated address.

Market access rule

Rule 15c3-5 requires firms with market access to apply pre-trade financial and regulatory risk controls and to have the CEO certify those controls annually.

Short sale locate

Reg SHO Rule 203 prohibits a short sale unless the firm has borrowed the security or has reasonable grounds to believe it can be borrowed by settlement date.

Alternative uptick rule

Rule 201 restricts short sales to a price above the current national best bid for the remainder of the day and the following day after a 10% price decline.

Manning rule

FINRA Rule 5320 generally bars a member from trading its own account at a price that would satisfy an executable customer order the firm is holding.

Five percent markup guideline

FINRA Rule 5210 requires fair markups and markdowns; a markup above 5% of the prevailing market price is presumed unfair unless the firm documents justification.

Circuit breaker thresholds

Market-wide circuit breakers halt trading for 15 minutes at 7% and 13% declines in the S&P 500 and close the market for the day at a 20% decline.

New issue restricted persons

FINRA Rule 5130 bars allocating new issue shares to broker-dealer personnel, their immediate family members, and finders, subject to specific defined exceptions.

Spinning prohibition

FINRA Rule 5131 prohibits allocating IPO shares to executives or directors of investment banking clients as a reward for, or inducement to, banking business.

Research quiet period

Under FINRA Rule 2241, a managing underwriter generally may not publish research until 10 days after an IPO or three days after a secondary offering.

Research information barrier

FINRA Rule 2241 requires separation between research and investment banking and bars banking personnel from directing analyst coverage decisions or analyst compensation.

Passive market making

Regulation M Rule 103 permits passive market making during a distribution, but passive bids may not exceed the highest independent bid for the security.