Series 24 key terms

A uniform form used to register an associated person with FINRA and states. It collects employment history, qualifications, and disciplinary disclosures, and must be kept accurate and amended when facts change.

A uniform termination notice a member firm files when a registered person leaves. It states the reason for termination and discloses reportable events, starting the clock on registration retention and disclosure.

A legal condition, such as certain criminal convictions, court injunctions, or regulatory orders, that bars a person from association with a member firm unless the firm obtains relief or approval.

A rule requiring most associated persons to be fingerprinted soon after hire so the FBI can check criminal history; firms must file the results with the designated agency.

A branch location where the firm conducts key supervisory functions, such as reviewing orders, hiring, or structuring offerings. It must be registered and inspected at least annually.

Compensated employment or a business activity outside the member firm that an associated person must disclose. The firm reviews it for conflicts, time demands, and supervisory concerns.

A sale of securities by an associated person outside the firm. The person must give prior written notice, and the firm may approve, reject, or require the deal to go through the firm.

Ongoing training for registered persons. The Regulatory Element is prescribed and taken periodically; the Firm Element is an annual needs-based program set by the member firm.

The firm's written policies and procedures describing how it supervises each business line to comply with applicable rules. They must be maintained, updated, and reasonably designed.

The firm's internal framework of policies, reviews, and controls used to supervise its businesses. It must be reasonably designed to achieve compliance with securities laws and rules.

A yearly certification by the firm's CEO, under FINRA Rule 3130, that the supervisory control system is reasonably designed to achieve compliance; it must describe the system and any changes.

Records a broker-dealer must create and keep under SEC Rules 17a-3 and 17a-4, such as blotters, ledgers, confirmations, and correspondence, for specified retention periods.

A written plan for continuing operations and recovering from disruptions such as disasters or system failures. It must be reviewed and updated at least annually.

A required program with written policies, a designated AML compliance officer, ongoing training, and independent testing, designed to detect and report money laundering and suspicious activity.

A confidential report filed with FinCEN when a firm knows, suspects, or has reason to suspect illegal activity. The firm may not tell the customer that a report was filed.

Procedures required by the USA PATRIOT Act to verify a customer's identity, keep records of the verification, and check government lists before opening an account.

An SEC rule requiring a broker-dealer to act in a retail customer's best interest when recommending securities, with care, disclosure, conflict, and compliance obligations.

The firm's duty to learn essential facts about each customer, including identity, finances, and investment goals, so it can supervise the account and make suitable recommendations.

An account for which the customer gives written authority allowing a representative to choose securities or timing. The firm must approve the account and supervise its activity.

Written authority letting someone other than the account holder place trades or withdraw assets. The firm reviews the document, often a power of attorney, before allowing activity.

Before options trading, the firm must collect customer financial and experience information, approve the account under its procedures, and deliver the Options Disclosure Document.

A written notice sent at or before settlement that states the security, price, commission, and other key terms of a transaction, as required by SEC Rule 10b-10.

A written grievance from a customer about the firm's activities. Firms must log and investigate complaints and report certain ones to FINRA under Rule 4530.

A firm that continuously quotes bid and ask prices in a security and stands ready to buy and sell for its own account. It must honor its quotes and meet related obligations.

The duty to seek the most favorable terms reasonably available for customer orders, considering price, speed, and likelihood of execution under current market conditions.

A FINRA rule that generally bars a firm from trading ahead of a customer's marketable order in the same security, protecting customer orders from being disadvantaged.

The difference between the price a firm pays or receives in a principal trade and the price charged to the customer. It must be fair and reasonable, not excessive.

A requirement before a short sale that the firm identify shares available to borrow or document a reasonable basis to believe they can be borrowed, under Regulation SHO.

Securities with persistent failures to deliver. Regulation SHO imposes close-out and pre-borrow requirements on short sales in these securities to reduce settlement problems.

Exchange price bands that pause trading in an individual stock when it moves outside specified percentages in a short period, helping limit extreme volatility.

SEC Rule 606 requires firms to publish quarterly reports showing where customer orders are routed, including venues and any payment for order flow.

The process of raising capital by selling a company's securities to investors. An underwriter buys the securities or sells them for the issuer and performs due diligence.

A group of underwriters that jointly distribute a securities offering and share the risk. The managing underwriter typically allocates securities and sets the offering terms.

The reasonable investigation an underwriter and its counsel conduct into an issuer, its business, and the offering to confirm that disclosure is accurate and complete.

A period after an IPO when research coverage is restricted. FINRA Rule 2241 limits publishing research and communications by managers and participating analysts for set periods.

A written communication that analyzes a security or issuer and usually includes a recommendation. It is subject to FINRA Rule 2241 content, approval, and disclosure rules.

Policies and physical or electronic controls that stop confidential investment banking information from reaching research or trading staff who could misuse it.

An opinion that the consideration in a transaction is fair from a financial point of view. FINRA Rule 5150 requires disclosure of the opinion and conflicts.