series 63

  1. Meaning of "Broker-Dealer"?
    means any person engaged in the business of effecting transactions in securities for the account of others or for (the person's) own account.  further: broker dealers help people effect transactions in securities ( buy or sell stocks, bonds etc)
  2. What are the six categories of an Institutional Investors?
    • Someone or something that fits into one of the following categories:
    • 1 a bank, savings institution, or trust company
    • 2 an insurance company
    • 3 an investment company(mutual fund)
    • 4 a broker-dealer
    • 5 a pension or profit sharing trust
    • 6 another financial institution or institutional buyer
  3. Are broker-dealers required net capital requirements?
    yes, safe to say substantial net capital requirements and states cannot require b-d's to meet net capital requirements that exceed SEC net capital requirements
  4. What does "effect transactions" mean?
  5. Who is expected/exempt from the the definition of a broker-dealer?
  6. What is an "Agent" of a broker dealer?
  7. What is the basic definition of an issuer?
  8. How does a customer's state of residence affect the need to register as a broker-dealer?
  9. What are the rules regarding customers for a broker dealer to avoid state registration?
  10. What are the "limits of employment or association" for broker-dealers?
  11. A broker dealer may only register at the state level if what requirements is met?
    • is if all transactions and all aspects ofthe transactions are conducted or expected to be conducted with in the state boundaries.
    • Meeting net capital requirements
    • Meeting bonding requirements
    • acceptance of registration by a state's securities administrator
  12. When do registrations for BD's typically become effective?
    effective at noon on the 30th day after the application is initially filed
  13. What are the most common post-registration requirements for broker dealers?
    • -Financial reports
    • -Record keeping
    • -Audits
    • -Bond and Insurance required
  14. How long must broker dealer records be kept?
    client records and marketing material on file for three years, the first two years in an easily accessible place, even if the broker dealer goes out of business.  Some records must be kept for six years
  15. What record keeping responsibility does a broker dealer have if they go out of business?
    easily accessible records
  16. What types of action can be taken against a broker-dealers license or application?
    • Denial
    • Revocation
    • Suspension
    • Withdrawal
    • Restrictions/Limitation
  17. What are the 12 main reasons broker-dealers may be disciplined?
    • 1 Filing Incomplete applciation
    • 2 Violating State Securities Regualtions
    • 3 W/in the last 10yrs, having Prior Felony Convictions or Securities Related 4 Misdemeanors
    • 5 Receiving Prior Disciplinary Orders of the Administrator
    • 6 W/in the last 10 yrs, Violations of Other 7 Securities Acts
    • 8 Unethical Behavior
    • 9 Insolvency
    • 10 Foreign Violations
    • 11 Unqualified Agent
    • 12 Failure to Supervise
    • Failure to File
  18. When a broker dealer acts in its________ capacity, it acts as the go-between for its customer and someone else interested in buying or selling a security.
  19. When a firm acts in its_______ capacity and buys, sells or trades for its own account
Card Set
series 63
chapter 3