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How long is the quote only period after a halt in trading?
5 minutes
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What is the self help exception?
Allows market participants to disregard the protected quotations of trading centers having problems
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Minimum capital requirement for a qualified block positioner?
$1m
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Minimum net capital requirement for an OTC market maker?
- $25,000 + $5000 * each security > $5
- Or $250,000
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Minimum capital requirement for a third marekt maker
- $100,000 + $20,000 * each security > $5
- Or $500,000
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What is a passive market maker’s daily purchase limit?
30% of ADT V or 200 shares (whichever is greater)
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Does a MM have to update a NASDAQ quote if it sends an order to an ECN?
No
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Stock pricing increments?
- >$1.00, $0.01
- <$1.00, $0.0001
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Does an order ticket show solicited/unsolicited?
Yes
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ADF and OTCBB— do they execute?
No
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What is a block positioner?
A MM that executes single transactions >$200,000 in value
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What is Circuit Breaker Rule?
No short sales after 10% decline. In effect until 4 PM on next business day
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Firm A posts an offer, firm B lifts. Who reports?
Firm A, the executing firm
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NASDAQ system hours>
- 4 AM to 8 PM
- 9:30 AM to 4 PM for MM requirements
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NMCES maximum access fee to quote?
$0.003
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Unexcused MM withdrawal penalty?
20 business days
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What are the large trader reporting limits (13h-1)?
- Fill out form 13-h if you exceed
- Daily: 2 million shares, $20 million
- Monthly: 20 million shares, $200 million
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CQS vs TRF vs ORF vs ADF?
- CQS - quotes for NYSE, NYSE American, regional exchnages and 3rd market
- TRF - for reporting trades on Nasdaq and Third Market
- NMCES - NASDAQ execution system
- ORT - OTC reporting
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OTCBB and OTC pink minimum size?
Depends on price (can be different for bid/ask)
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What do you have to do before quoting as an MM on OTCBB or OTC Pink?
- File form 211 which says you’ve collected and reviewed information about the company.
- Not required if stock was delisted from Nasdaq or you piggyback.
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What is the piggyback exemption
Piggybacking is when it’s been quoted in at least 12 of the last 30 days and no more than 40 days have gone without a quote
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What constitutes a penny stock?
Less than $5 per share
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Civil vs criminal penalties for insider trading?
- Civil: 3x gain/loss, disgorgement of profits
- Criminal: $5 million and 20 years
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Time to place LOO and MOO orders?
4 AM to 9:28 AM, then the Imbalance Indicator updates every second
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What order can you enter between 9:28 and 9:30?
OIO (opening imbalance only). Unexecuted gets handed back to the party that entered it
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What is the Nasdaq closing cross?
3:55 PM, an imbalance indicator begins
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When can you enter a LOC order?
- 4:00 AM to 3:55 PM,
- 3:55 PM to 3:58 PM you can only cancel for an error
- 3:58 PM you cannot cancel
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Easy to borrow or hard to borrow?
Easy to borrow
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What are exemptions from the locate requirement?
- Short sale taken from another BD that has to comply with the requirement.
- Bona fide market making
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Time limit on the locate requirement if you don’t get delivery of the security?
35 days
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LULD rule thresholds?
- S+P and Russell = 5%
- Other NMS = 10%
- $0.75 to $3.00 = 20%
- >$0.75 = the lesser of $0.15 or 75%
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What causes a 5 minute trading pause?
Limit state for 15 seconds (bid above upper price band, offer below lower price band)
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What is straddle state?
When only one part of the market is outside of price bands (NBB below or NBO above). Only one sde is executable
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Market wide circuit breaker limits?
- All in S&P 500
- 7% decline - 15 minute halt
- 13% decline - 15 minute halt
- 20% decline - remainder of the day halt
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Limits on issuers buying their own securities?
- Only one BD (can use a different after hours)
- Can’t be first transaction, last 10 mins, or 30 mins if not actively traded
- May not be higher than independent bid or last transaction
- May not exceed 25% ADTV
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Maximum number of non-accredited investors in a private placement?
35
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When is the restricted period for a new issue?
- 5 days if <$25 MM or ADTV <$100,000
- 1 day is >$25 MM and ADTV > $100,000
- No restricted period for BDs if actively traded ($150 MM and $1MM)
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How many shares can a PSMM buy before having to lower their bid to the independent bid?
200
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Green Shoe Clause maximum?
15% more shares
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.T
Not during normal hours
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.U
Not during normal hours and reported late
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Form T time limit
365 days
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.W
Weighted average or stop stock
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.P
Prior price, should have been executed at an earlier time
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