SIE Domain 4 (Quiz 4): Overview of the Regulatory Framework

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Domain 4 (Set 4): Overview of the Regulatory Framework. (25 questions)

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SIE, Overview of Regulatory Framework,SIE

An associated person of a Financial Industry Regulatory Authority (FINRA) member firm would not be considered a municipal finance professional (MFP) if involved solely in which of the following?

A) Underwriting municipal securities for the firm

B) Research involving municipal securities for the firm

C) Municipal securities sales to customers

D) Municipal securities communications with customers

None

SIE, Overview of Regulatory Framework,SIE

In order for a registered representative of a member firm to receive any form of compensation, such as commissions, after terminating employment, all of the following statements are correct except

A) earnings from referred business from existing clients would be eligible for payment.

B) it would be permissible to pay continuing commissions to a surviving spouse.

C) the agreement must be entered into before the termination of employment.

D) there must be a contract in effect calling for these continuing commissions.

None

SIE, Overview of Regulatory Framework,SIE

A registered representative has a customer who is interested in using options strategies such as spreads and straddles. The registered representative's firm does not offer options transactions as part of their existing business model. As such, the registered representative directs the customer to another broker-dealer that allows for option trading. This is

A) an example of selling away.

B) an acceptable practice.

C) a private securities transaction.

D) an example of placing away.

None

SIE, Overview of Regulatory Framework,SIE

A registered representative was guilty of an undetected minor rule violation during the last year of employment at a broker-dealer firm. The representative has now decided to leave the industry. For how long might the representative still be subject to fines or other sanctions by Financial Industry Regulatory Authority (FINRA) if the violation is belatedly detected?

A) 6 months

B) 30 calendar days

C) 2 years

D) FINRA no longer has jurisdiction

None

SIE, Overview of Regulatory Framework,SIE

Financial Industry Regulatory Authority (FINRA) is concerned about potential conflicts of interest in providing incentives or rewards for selling a sponsor's product. Which of the following situations regarding a product sponsors product training or education for outside RRs would FINRA disallow?

A) A member firm's permission for its registered representatives to attend is required.

B) A training location is chosen based on its being convenient for attendees to get to and its proximity to the main office.

C) Spouses are included in the invitation with travel expenses paid for.

D) Separate outings are planned in conjunction with the training at the expense of the attendees if they wish to participate.

None

SIE, Overview of Regulatory Framework,SIE

A broker-dealer may allow a registered representative to work from home – that is, to have a home office. If this is the case, the registered representative must

A) not specify the office as a place of business in advertising.

B) use the office only to perform clerical functions.

C) expect the office to be treated like any branch office.

D) carry out sales presentations in some other location.

None

SIE, Overview of Regulatory Framework,SIE

If after a registered representative terminates the firm learns of something that should have been reported to the Central Registration Depository, how long does the firm have to make an amendment if that information would cause statutory disqualification?

A) 45 days

B) 20 days

C) 10 days

D) 30 days

None

SIE, Overview of Regulatory Framework,SIE

A representative of a dealer who solicits municipal securities business from an official of an issuer contributes $275 to the official's city council reelection campaign during the general election. Under what circumstance would the contribution invoke a ban on the dealer's municipal securities business with that issuer?

A) The dealer seeks to engage in a negotiated underwriting with the issuer.

B) The dealer seeks to engage in a competitive underwriting with the issuer.

C) The representative resides in the official's city.

D) The representative contributed $250 during the primary election.

None

SIE, Overview of Regulatory Framework,SIE

The U-4 form requires registered representatives to disclose all of the following except

A) 10-year residency history.

B) any aliases.

C) information on any criminal charges, even if found innocent.

D) 10-year employment history.

None

10.

SIE, Overview of Regulatory Framework,SIE

A U-5 form should be filed with the Central Registration Depository within how many days after termination of a registered representative?

A) 30 days

B) Next business day

C) 10 business days

D) 15 business days

None

11.

SIE, Overview of Regulatory Framework,SIE

A broker-dealer firm managing an initial public offering (IPO) wishes to give a gift to an associated person of one of the selling group members. Which of the following would be an unacceptable gift under the rules?

A) A $150 leather briefcase with the broker-dealer's name and logo on it

B) A dinner at an expensive restaurant with a representative of the broker-dealer

C) A ticket to a major league ball game to attend with a principal of the broker-dealer

D) A $125 designer edition fountain pen and desk holder

None

12.

SIE, Overview of Regulatory Framework,SIE

To keep up with recent developments in the industry regarding regulatory changes and other requirements imposed by Financial Industry Regulatory Authority (FINRA), as well as needs identified by the broker-dealer firm, registered persons must fulfill the firm's

A) yearly sales development (SD) requirement.

B) regulatory development (RD) requirement.

C) continuing education (CE) requirement.

D) requirement to hold yearly meetings of all office personnel.

None

13.

SIE, Overview of Regulatory Framework,SIE

A broker-dealer wants to give an employee of another firm a gift. This is permitted provided all of the following conditions are met except

A) the gift or compensation doesn't exceed the annual $100 limit.

B) the gift or compensation is not conditional on sales.

C) the gift or compensation is preapproved by the firm's self-regulatory organization (SRO).

D) the gift or compensation has the employing member firm's prior approval.

None

14.

SIE, Overview of Regulatory Framework,SIE

Those persons employed by a Financial Industry Regulatory Authority (FINRA)-registered broker-dealer to do nothing other than provide training for its associated persons

A) need not be registered.

B) must be registered as a representative.

C) must be registered as a principal.

D) are exempt from the firm element of the firm's continuing education requirement.

None

15.

SIE, Overview of Regulatory Framework,SIE

When an employee is either terminated from, or willfully leaves, a member firm, Form U-5 must be filed. Under these circumstances, which of the following is true?

A) Under either circumstance, the employee is responsible for filing Form U-5.

B) The employee is responsible for filing Form U-5 only when leaving the firm willfully.

C) The employing firm is responsible for filing Form U-5 only if it has terminated the employee.

D) Under either circumstance, the employing firm is responsible for filing Form U-5.

None

16.

SIE, Overview of Regulatory Framework,SIE

Updates to the Form U4 such as a change in address, and that do not point to disciplinary action must be made promptly but no later than

A) 10 business days.

B) 90 days.

C) 60 days.

D) 30 days.

None

17.

SIE, Overview of Regulatory Framework,SIE

Should a registered representative enter into a private securities transaction that would entail earning compensation, the employing member will

A) have the opportunity to approve or disapprove of the associated person's participation.

B) not require any notification because the compensation makes the transaction the responsibility of the accommodating firm.

C) require a compensation split of least 50-50 with the associated person.

D) provide all execution services for the transaction.

None

18.

SIE, Overview of Regulatory Framework,SIE

All of the following are required when completing Form U-4 except

A) employment history for the past 10 years.

B) date of birth.

C) legal name and any aliases used.

D) educational degrees.

None

19.

SIE, Overview of Regulatory Framework,SIE

Members and non-members alike can look into a broker's service and qualifications record by accessing which of the following services?

A) The Central Registration Depository

B) Municipal Securities Rule Board (MSRB)

C) BrokerCheck

D) Form U-4

None

20.

SIE, Overview of Regulatory Framework,SIE

Firm element training requires member firms to prepare training how frequently?

A) Biannually

B) Quarterly

C) Annually

D) Semiannually

None

21.

SIE, Overview of Regulatory Framework,SIE

Regarding registered representatives working from their residence, commonly known as their home office, all of the following would be true except

A) home office address and telephone numbers may be used for normal advertising purposes.

B) the office is subject to a premise visit by Financial Industry Regulatory Authority (FINRA) examiners as often as they see fit.

C) prospects would not be allowed to visit and be on the premises at this location.

D) the office would be subject to a premise visit and review by a principal of the firm.

None

22.

SIE, Overview of Regulatory Framework,SIE

An individual would most likely be statutorily disqualified from working in the securities industry for which of the following reasons?

A) Willful failure to disclose personal bankruptcy or unsatisfied liens

B) Charged with driving under the influence of alcohol resulting in personal injury—a felony

C) Conviction for misdemeanor assault

D) Willful failure to disclose motor vehicle fines in excess of $1,000

None

23.

SIE, Overview of Regulatory Framework,SIE

The firm element of a broker-dealer's continuing education (CE) requirement must be undergone by all registered persons who

A) have direct contact with the public.

B) have not had such training in the past six months.

C) have disciplinary actions pending.

D) have purely clerical duties with the firm.

None

24.

SIE, Overview of Regulatory Framework,SIE

An investment company wishes to provide incentives for registered representatives of several broker-dealer firms to sell their investment products. The company proposes to send some selected representatives to a sales training seminar. Which of the following would be acceptable features of the trip? I. The venue of the seminar is a resort in the Canary Islands. II. There is an incidental tour the representatives may attend at their own expense. III. The representatives may bring their spouses, whose expenses will also be paid. IV. The representatives must obtain their employing firms' permission to attend.

A) I and III

B) I and IV

C) II and III

D) II and IV

None

25.

SIE, Overview of Regulatory Framework,SIE

Continuing education requirements are a part of the securities industry's ongoing commitment to furthering the knowledge base for registered representatives. Which of the following CE requirements are needed by a registered rep? I. Blue-sky requirement II. Registration requirement III. Firm element training IV. Regulatory element training

A) I and III

B) III and IV

C) I and III

D) II and IV

None

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