Your FREE Series 24 Flashcards 2026 – 250+ Cards

Series 24 Flashcards

Office of Supervisory Jurisdiction (OSJ)

An office where any of these occur: order execution/market making, structuring offerings, maintaining customer funds/securities, final approval of new accounts, review/endorsement of customer orders, or final approval of communications. Each OSJ must have an on-site principal.

Written Supervisory Procedures (WSPs)

FINRA Rule 3110(b) requires each firm to establish, maintain, and enforce WSPs to supervise its business and associated persons for compliance with securities laws and FINRA rules. They must be reasonably designed and kept current.

FINRA Rule 3110

The core Supervision rule. Requires a supervisory system, WSPs, a designated principal for each business, OSJ designation and on-site principals, internal inspections, and review of correspondence and transactions.

OSJ inspection frequency

OSJs and supervisory branch offices: inspect at least annually. Non-supervisory branch offices: at least every 3 years. Non-branch locations: on a regular periodic schedule (presumed at least every 3 years).

FINRA Rule 3120

Supervisory Control System. Requires the firm to test and verify that its supervisory procedures are reasonably designed, and to create/amend procedures where needed. The annual report goes to senior management.

FINRA Rule 3130 (CEO certification)

The CEO must certify annually that the firm has processes to establish, maintain, review, test, and modify WSPs and supervisory controls reasonably designed to achieve compliance.

FINRA Rule 4370 (Business Continuity Plan)

Each member must create and maintain a written BCP addressing how it will respond to a significant business disruption, plus emergency contact information. The plan must be reviewed at least annually.

Form BD

The Uniform Application for Broker-Dealer Registration — filed in CRD to register a broker-dealer with the SEC, FINRA, and the states. Form BDW withdraws registration; Form BR registers branch offices.

Form U4 vs Form U5

Form U4 registers (and amends the record of) an associated person. Form U5 reports a registered person's termination. The firm must file the U5 within 30 days of termination and amend it within 30 days of learning new facts.

U4/U5 amendment deadline

A firm must amend a Form U4 or U5 within 30 days after learning of facts or circumstances that make the existing filing inaccurate (10 business days for certain statutory-disqualification matters).

Statutory disqualification

A person is statutorily disqualified by certain felonies (any felony within 10 years, plus securities/financial felonies), specified misdemeanors, bars, expulsions, or willful false statements. The firm needs FINRA approval (MC-400 / Rule 19h-1) to associate with such a person.

Heightened supervision

An enhanced, written, individualized supervisory plan a firm imposes on a registered person with a disciplinary history or other risk factors, typically with a designated supervisor and specific review steps.

Regulatory Element vs Firm Element CE

Regulatory Element (FINRA Rule 1240): completed annually by Dec 31. Firm Element: an annual, firm-designed training program for covered registered persons who deal with customers, covering products, services, and compliance.

Rule 17f-2 (fingerprinting)

SEA Rule 17f-2 requires broker-dealers to fingerprint partners, directors, officers, and certain employees and submit the prints to the FBI through FINRA.

FINRA Rule 1220

Defines registration categories and the qualification exams for each (e.g., General Securities Representative, General Securities Principal, Financial and Operations Principal). It sets the permissible activities for the Series 24 principal.

Series 24 prerequisite & corequisite

Corequisite: SIE. Prerequisite: one rep license — Series 7, 57, 62, 79, or 82 (or the 17/37/38 modules). You must already be a representative before you can become a General Securities Principal.

Rule 15b7-1

An SEC rule (and FINRA By-Laws Art. V) requiring that an associated person be properly registered/qualified for the activities they perform — a firm may not let an unqualified person engage in registrable activity.

RIA vs broker-dealer

A broker-dealer effects securities transactions and is regulated under the '34 Act (SEC/FINRA/states). A registered investment adviser provides advice for compensation under the Advisers Act of 1940 (SEC or state). Different registrations and standards apply.

FINRA Rule 2010

Standards of Commercial Honor and Principles of Trade — the catch-all ethics rule: a member must observe high standards of commercial honor and just and equitable principles of trade.

FINRA Rule 2020

Prohibits the use of manipulative, deceptive, or other fraudulent devices to induce the purchase or sale of any security.

FINRA Rule 3270 (Outside Business Activities)

A registered person must give prior written notice to the firm before engaging in any outside business activity for compensation. The firm evaluates and may limit or prohibit it.

FINRA Rule 3280 (Private Securities Transactions)

A registered person must give prior written notice of any private securities transaction. If selling-away for compensation, the firm must approve it in writing and supervise it as its own; if uncompensated, the firm must acknowledge it.

FINRA Rule 3240 (Borrowing/lending with customers)

Generally prohibits borrowing from or lending to a customer unless the firm has a written policy permitting it and the arrangement fits an allowed category (e.g., immediate family, a lending business, or a personal/business relationship), with required notice/approval.

FINRA Rule 3210 (Accounts at other firms)

An associated person must get prior written consent from the employer firm before opening a securities account at another firm, and must notify the executing firm of the association so duplicate confirmations/statements can be sent.

FINRA Rule 3220 (Gifts limit)

Caps gifts to another firm's employees at $100 per person per year in relation to the recipient's business. Ordinary business entertainment and certain promotional items are treated separately.

Cash vs non-cash compensation (Rule 2320(g))

For variable contracts and investment company products, non-cash compensation is restricted: generally only firm-paid items, certain occasional gifts under the gift limit, and training/education meetings meeting specified conditions are allowed.

FINRA Rule 3160 (Networking arrangements)

Governs broker-dealers operating on bank premises: clear disclosure that investment products are not FDIC-insured, not bank-guaranteed, and may lose value, plus physical/setting requirements.

FINRA Rule 2040 (Payments to unregistered persons)

A member may not pay transaction-based compensation (commissions) to any person not properly registered, unless an exemption applies. Continuing commissions to retired reps are allowed under limited conditions with a written contract.

Insider trading — Rule 10b-5

Prohibits fraud in connection with the purchase or sale of a security, including trading on material nonpublic information (MNPI) in breach of a duty. The classical and misappropriation theories both apply.

Rule 10b5-1 plan

An affirmative defense to insider trading: a pre-arranged written trading plan adopted in good faith when the person was NOT aware of MNPI, specifying amounts, prices, and dates (or a formula). It is not itself a violation.

Rule 10b5-2

Defines the duties of trust or confidence that trigger misappropriation-theory insider-trading liability — e.g., an agreement of confidentiality, a history of sharing confidences, or certain family relationships.

Section 21A (insider-trading penalties)

SEA §21A allows the SEC to seek civil penalties up to 3× the profit gained or loss avoided (treble damages) from insider traders and certain controlling persons.

FINRA Rule 3110(d) (transaction review)

Requires firms to have risk-based supervisory procedures to review securities transactions for potential insider trading and manipulative/fraudulent activity by the firm and its associated persons.

Net capital rule (SEA Rule 15c3-1)

Requires a broker-dealer to maintain minimum net liquid assets (net capital) so it can meet obligations to customers and counterparties. It applies haircuts to securities positions and sets minimum dollar and ratio requirements.

Customer Protection Rule (SEA Rule 15c3-3)

Protects customer cash and securities. The firm must maintain a Special Reserve Bank Account for the exclusive benefit of customers and obtain physical possession or control of fully-paid and excess-margin securities.

Aggregate indebtedness ratio

Under the basic (aggregate-indebtedness) method of 15c3-1, a firm's aggregate indebtedness may not exceed 1500% (15:1) of net capital — and 800% (8:1) during its first year of operations.

Early-warning / Rule 15c3-1 alternative method

Under the alternative standard, minimum net capital is the greater of $250,000 or 2% of aggregate debit items. Firms must file early-warning notice (Rule 17a-11) if net capital falls below specified thresholds.

Regulation T

Federal Reserve Board credit rule for broker-dealers. Initial margin requirement is 50% for marginable equity securities, with a payment deadline (generally settlement + 2 business days = T+4 historically; now tied to T+1 settlement).

FINRA Rule 4210 (margin)

Sets FINRA margin requirements, including the 25% minimum maintenance margin for long equity positions and 30% for short positions, plus day-trading margin and pattern-day-trader rules.

FINRA Rule 4311 (carrying agreements)

Governs introducing/clearing arrangements. A carrying agreement allocates functions between the introducing firm and the clearing firm and must be approved by FINRA; certain duties cannot be allocated away.

FINRA Rule 4360 (fidelity bonds)

Members with employees must maintain a blanket fidelity bond covering fraud and dishonesty; the minimum coverage is tied to the firm's net capital requirement, reviewed annually.

FINRA Rule 4560 (short-interest reporting)

Members must report total short positions in all customer and proprietary firm accounts in equity securities to FINRA on a regular (twice-monthly) basis.

SIPC coverage

The Securities Investor Protection Corporation protects customers if a broker-dealer fails: up to $500,000 per customer, including a $250,000 limit for cash. It covers missing securities/cash, not market losses.

Rule 17a-3 vs Rule 17a-4

17a-3 lists the books and records a broker-dealer must MAKE. 17a-4 lists how long records must be PRESERVED and how (including non-rewriteable, non-erasable WORM electronic storage under 17a-4(f)).

Record retention periods (general)

Many records are kept at least 6 years (e.g., blotters, ledgers), and certain account/communication records at least 3 years, with the first 2 years in an easily accessible place. Some (e.g., partnership/corporate documents) are kept for the life of the firm.

FINRA Rule 3170 (taping rule)

Requires certain firms that hired a threshold percentage of registered persons from previously disciplined ('taping') firms to tape-record and review their reps' telephone conversations.

FINRA Rule 4530 (reporting requirements)

Members must promptly report specified events to FINRA — e.g., regulatory actions, certain customer complaints, criminal/civil findings — generally within 30 calendar days, and report statistical complaint data quarterly.

FINRA Rule 4513 (customer complaint records)

Each OSJ must keep a record of written customer complaints and their disposition (or a reference to a central file). FINRA Rule 4530 separately requires reporting certain complaints.

FINRA Rule 8312 (BrokerCheck)

Governs the information FINRA releases through BrokerCheck about members and their registered persons — registration, employment history, and disclosure events.

FINRA Code of Procedure (8000/9000 series)

The disciplinary process: investigation (8000 series), then a formal complaint and hearing before a Hearing Panel (9000 series), with appeal to the National Adjudicatory Council and then to the SEC and federal courts.

FINRA Code of Arbitration (12000/13000 series)

Customer disputes use the 12000 Code; intra-industry disputes use the 13000 Code. Arbitration is generally required between members and associated persons; customer cases require a customer agreement or customer election.

FINRA Rule 2080 (expungement)

Expungement of customer-dispute information from CRD requires a court order confirming a FINRA arbitration award that found the claim factually impossible/clearly erroneous, false, or that the rep was not involved.

FINRA Rule 8310 (sanctions)

FINRA may impose sanctions for rule violations: censure, fine, suspension, expulsion, bar, or revocation of registration. Sanctions follow the FINRA Sanction Guidelines.

Mediation (FINRA 14000 series)

A voluntary, non-binding process in which a neutral mediator helps the parties reach a settlement. It can run alongside arbitration and does not affect the arbitration timeline unless the parties agree.

Customer Identification Program (CIP)

Under the BSA/USA PATRIOT Act, a firm must verify each customer's identity at account opening using name, date of birth, address, and an identification number (e.g., SSN/TIN), and keep records of the process.

Anti-Money Laundering program (FINRA Rule 3310)

Each firm must have a written AML program with: policies/procedures to detect and report suspicious activity, a designated AML compliance officer, ongoing training, and independent testing (annually for most firms).

Suspicious Activity Report (SAR)

Filed with FinCEN for transactions of $5,000 or more that a firm suspects involve illegal funds, are designed to evade BSA rules, have no business purpose, or facilitate criminal activity. Generally filed within 30 days; the customer is not told.

Currency Transaction Report (CTR)

Filed with FinCEN for cash transactions exceeding $10,000 in a single business day (aggregated). It is informational, not a suspicion report.

OFAC

The Treasury's Office of Foreign Assets Control administers economic sanctions and the SDN (Specially Designated Nationals) list. Firms must screen customers/transactions and block prohibited dealings.

The three stages of money laundering

Placement (introducing illicit cash into the financial system), layering (moving/disguising it through transactions), and integration (returning the now-clean funds to the launderer).

FINRA Rule 2090 (Know Your Customer)

Requires firms to use reasonable diligence to know the essential facts about every customer and the authority of each person acting on the account, at account opening and throughout the relationship.

Regulation S-P

The SEC privacy rule: firms must give customers privacy notices, allow opt-out of sharing nonpublic personal information with nonaffiliated third parties (with exceptions), and safeguard customer information.

Regulation S-ID (identity theft red flags)

Requires firms with covered accounts to maintain a written Identity Theft Prevention Program to detect, prevent, and mitigate identity theft.

FINRA Rule 2231 (customer account statements)

Customers must generally receive an account statement at least quarterly (monthly if there is activity), showing securities positions, money balances, and account activity.

ACATS / FINRA Rule 11870

The Automated Customer Account Transfer Service governs transferring a customer account between firms. The carrying firm validates within 1 business day and completes the transfer within 3 business days of validation.

FINRA Rule 2210 (communications categories)

Three categories: retail communications (to >25 retail investors in 30 days), correspondence (to ≤25 retail investors in 30 days), and institutional communications. Approval and filing requirements differ by category.

Retail communication principal approval

A registered principal must approve each retail communication before first use (or filing), unless an exception applies (e.g., another firm already filed it, or it does not promote a product/service).

FINRA Advertising Regulation filing windows

New member firms file retail communications at least 10 business days before first use for the first year. Certain communications (e.g., for registered investment companies, options, CMOs) require filing within 10 business days of first use.

FINRA Rule 3230 (telemarketing / Do-Not-Call)

Restricts cold calls to between 8:00 a.m. and 9:00 p.m. (called party's time), requires maintaining a firm-specific do-not-call list, and honoring the National Do-Not-Call Registry, with limited exceptions (e.g., established business relationship).

Regulation Best Interest (Reg BI / Rule 15l-1)

Requires a broker-dealer to act in the retail customer's best interest when making a recommendation, without placing its own interests ahead. It has four obligations: Disclosure, Care, Conflict of Interest, and Compliance.

Form CRS (Rule 17a-14)

A short Customer/Client Relationship Summary that retail firms must deliver, summarizing relationships, services, fees, conflicts, and disciplinary history, with links to more information.

FINRA Rule 2111 (suitability)

Requires a reasonable basis to believe a recommendation is suitable, based on the customer's investment profile. It has three components: reasonable-basis, customer-specific, and quantitative (anti-churning) suitability. Reg BI now layers on top for retail.

FINRA Rule 2121 (fair prices and commissions)

Prices and commissions must be fair and reasonable, considering all relevant factors. The traditional '5% policy' is a guideline, not a rule — markups can be unfair even below 5%.

FINRA Rule 2130 (day-trading approval)

Before approving a non-institutional customer's account for a day-trading strategy, the firm must furnish a risk disclosure and either approve the account for day trading or obtain a written statement that the customer does not intend to day-trade.

FINRA Rule 2232 (customer confirmations)

Requires delivery of a written confirmation at or before completion of each transaction, disclosing required terms (capacity, price, commission, and for certain corporate/agency debt, mark-up/mark-down).

FINRA Rule 3260 (discretionary accounts)

A discretionary account requires the customer's prior written authorization and firm acceptance in writing; each discretionary order must be approved promptly by a principal, and the account must be reviewed frequently to detect excessive trading (churning).

FINRA Rule 2342 (breakpoint sales)

Prohibits selling mutual fund shares in dollar amounts just below a breakpoint (where a sales charge would be reduced) to earn a higher commission, when doing so is contrary to the customer's interest.

Regulation SHO

The SEC short-sale rule framework: order marking (long/short/short-exempt) under Rule 200, the locate requirement under Rule 203, and the close-out requirement for fails-to-deliver under Rule 204.

Reg SHO locate requirement (Rule 203)

Before accepting or effecting a short sale, a firm must have reasonable grounds to believe the security can be borrowed and delivered (a 'locate'), unless an exception applies (e.g., bona fide market making).

Reg SHO close-out (Rule 204)

A participant must close out a fail-to-deliver by the beginning of regular trading on the settlement day after the settlement date (T+1 for most), or T+3-style timing for certain market-making fails — failure triggers pre-borrow ('penalty box') restrictions.

Best execution (FINRA Rule 5310)

A firm must use reasonable diligence to obtain the best market for a customer order so the price is as favorable as possible under prevailing conditions. It must conduct regular and rigorous reviews of execution quality.

Regulation NMS

The SEC framework for the national market system, including the Order Protection Rule (611), market data and quote rules (601-603), the access rule (610), and minimum pricing increments (612).

Order Protection Rule (Reg NMS Rule 611)

Prohibits 'trade-throughs' — executing an order at a price inferior to a protected (automated, top-of-book) quotation displayed by another trading center, subject to exceptions.

FINRA Rule 5320 (Manning rule)

Prohibits a firm from trading ahead of a customer order for its own account at a price that would satisfy the customer order, unless it immediately fills the customer at that price or better (with large-order/institutional exceptions).

FINRA Rule 5270 (front running)

Prohibits trading in a security or related financial instrument while in possession of material nonpublic information about an imminent block transaction.

FINRA Rule 5280 (trading ahead of research)

Prohibits a firm from establishing, increasing, decreasing, or liquidating an inventory position based on advance knowledge of the content/timing of a research report it is about to publish.

SEC Rule 15c3-5 (market access rule)

Requires firms with market access (including sponsored access) to have risk-management controls and supervisory procedures — pre-trade financial and regulatory checks — to prevent erroneous or non-compliant orders.

Limit Up-Limit Down (LULD)

A volatility mechanism that prevents trades in NMS stocks outside price bands set around a reference price; sustained moves to the band can trigger a brief trading pause (FINRA Rule 6190 / Reg NMS plan).

Market-wide circuit breakers

Halt all trading when the S&P 500 falls 7% (Level 1) or 13% (Level 2) from the prior close (15-minute halts), or 20% (Level 3, halt for the day). They differ from single-stock LULD pauses.

Regulation M

Anti-manipulation rules during a distribution: Rule 101 (distribution participants), Rule 102 (issuers/selling holders), Rule 103 (Nasdaq passive market making), Rule 104 (stabilizing), and Rule 105 (short selling before a covered offering).

Stabilizing bid (Reg M Rule 104)

A bid to support an offering price during a distribution. It must never be made at a price above the offering price, must be identified ('stabilizing bid'), and is the only permitted form of price manipulation.

Settlement cycle (Rule 15c6-1)

The standard settlement cycle for most securities is T+1 (trade date plus one business day), effective May 2024. Some instruments (e.g., certain government securities) settle same-day or next-day by convention.

Rule 10b-10 (confirmations)

The SEC rule requiring delivery of a customer confirmation disclosing the trade's terms — capacity (agent/principal), price, time (on request), commission, and other required details — at or before completion of the transaction.

TRACE (FINRA 6700 series)

The Trade Reporting and Compliance Engine — FINRA's facility for reporting OTC transactions in eligible fixed-income (corporate, agency, securitized) securities, generally within 15 minutes of execution.

Consolidated Audit Trail (CAT)

A comprehensive database (FINRA 6800 series) tracking the lifecycle of every order in NMS securities and OTC equities. Industry members report order events with synchronized clocks for regulatory surveillance.

Trade Reporting Facility (TRF)

A FINRA facility for reporting off-exchange trades in NMS stocks. The executing/seller side generally reports; trades must be reported within the required timeframe (e.g., 10 seconds for most during market hours).

Buy-in (FINRA 11800 series)

If a seller fails to deliver securities by settlement, the buyer may, after required notice, 'buy in' the securities in the open market and charge the defaulting party for any loss.

Securities Act §5 (the three periods)

Pre-filing (no offers/sales), waiting/cooling-off (oral offers, preliminary 'red herring' prospectus, tombstones, indications of interest — but NO sales), and post-effective (sales permitted with final prospectus delivery).

Red herring (preliminary prospectus)

The prospectus used during the waiting period. It contains most information but no final public offering price and cannot be used to accept orders or money.

FINRA Rule 5110 (Corporate Financing Rule)

Requires members to file public-offering documents with FINRA and prohibits unfair or unreasonable underwriting terms and arrangements (including total underwriting compensation).

FINRA Rule 5121 (conflicts of interest)

Governs public offerings where a participating member has a conflict of interest (e.g., the issuer is an affiliate). It generally requires prominent disclosure and, in some cases, a Qualified Independent Underwriter (QIU).

FINRA Rule 5130 (new-issue / IPO restrictions)

Prohibits selling equity IPOs (new issues) to 'restricted persons' — broker-dealers, their employees, and certain immediate family — to prevent industry insiders from getting hot-issue allocations.

FINRA Rule 5131 (new issue allocations)

Addresses abuses in IPO allocations: prohibits 'spinning' (allocating to executives to win business), quid pro quo allocations, and improper market-order/penalty-bid practices.

FINRA Rule 5150 (fairness opinions)

Requires disclosure of conflicts when a member provides a fairness opinion in a merger or acquisition — e.g., contingent compensation, prior relationships, and whether the opinion was approved by a fairness committee.

Firm commitment vs best efforts

Firm commitment: the underwriter buys the whole issue as principal and bears the risk of unsold shares. Best efforts: the underwriter acts only as agent and takes no inventory risk — unsold shares return to the issuer.

Regulation D (private placements)

The safe harbor for §4(a)(2) private offerings. Rule 506(b): unlimited raise from accredited investors plus up to 35 sophisticated non-accredited, no general solicitation. Rule 506(c): general solicitation allowed but accredited-only, with verification.

Accredited investor

Qualifies by income ($200,000 individually / $300,000 jointly for two years), net worth over $1 million excluding the primary residence, or holding certain professional licenses (Series 7/65/82) — Reg D Rule 501.

Form D

The notice filing made with the SEC within 15 days after the first sale of securities in a Regulation D offering. It is a notice, not a registration.

Rule 144

Governs the resale of restricted and control securities: a holding period (6 months for reporting issuers, 1 year for non-reporting), volume limits and Form 144 for affiliates, plus current public information and manner-of-sale conditions.

Rule 144A

Permits the resale of restricted securities to Qualified Institutional Buyers (QIBs) — institutions owning/managing at least $100 million in securities — creating a deep institutional private market.

Tender offer (Williams Act)

A public offer to buy shares directly from holders, for a limited time, usually at a premium. The Williams Act (SEA §§13(d), 13(e), 14(d), 14(e)) regulates disclosure, timing, and equal treatment.

Rule 14e-1 (minimum offer period)

A tender offer must remain open at least 20 business days, and at least 10 additional business days after any change in price or the percentage of securities sought.

Rule 14d-10 (all-holders / best-price)

A tender offer must be open to all holders of the subject class (all-holders rule), and all tendering holders must receive the highest consideration paid to any holder (best-price rule).

Rule 14e-3 (tender-offer insider trading)

Prohibits trading on material nonpublic information about a tender offer once substantial steps have been taken. Unlike Rule 10b-5, no breach of a fiduciary duty is required.

Schedule 13D vs 13G

Filed by beneficial owners of more than 5% of a registered equity class. 13D: activists with intent to influence/control (the long form). 13G: passive holders/qualified institutions (the short form, less burdensome).

Information barrier (Chinese wall)

Internal policies/procedures separating investment banking (which receives MNPI) from research and trading, restricting information flow and supervised under FINRA rules and the firm's WSPs.

FINRA Rule 2241 (research analysts)

Governs research reports and analysts: requires information barriers between research and banking, limits banking influence over research, mandates conflict disclosures, and imposes quiet periods around offerings.

SEC Regulation AC (Analyst Certification)

Requires research analysts to certify that the views in a research report accurately reflect their personal views, and to disclose whether they were compensated in connection with the specific recommendation.

Section 28(e) (soft dollars)

A safe harbor allowing a money manager to use client commissions to pay for brokerage and research services that provide lawful and appropriate assistance, without breaching fiduciary duty.

Free writing prospectus (FWP)

Any written offer to sell securities that goes beyond the statutory prospectus. It is permitted after a registration statement is filed under Rules 164 and 433, subject to filing and legend conditions.

FINRA By-Laws Article IV

Governs membership: application for membership, the executive representative, resignation, retention of jurisdiction for 2 years after termination, and registration of branch offices.

Retention of jurisdiction

FINRA retains jurisdiction over a formerly registered person for at least 2 years after termination for purposes of complaints/investigations into conduct while registered.

Form BR (branch registration)

The Uniform Branch Office Registration Form, filed in CRD to register, amend, or close a branch office of a broker-dealer.

Form BDW

The Uniform Request for Broker-Dealer Withdrawal — used to withdraw a firm's registration. Withdrawal generally becomes effective 60 days after filing (subject to SEC action).

Permissive registration (Rule 1210.02)

A firm may register or maintain the registration of an associated person who does not currently perform a registrable function, so long as it is consistent with the firm's business and supervised.

Maintaining Qualifications Program (MQP)

Lets an individual who terminates a registration elect to maintain it for up to 5 years by completing prescribed continuing education, instead of re-taking the qualification exam.

FINRA Rule 1230

Identifies persons exempt from registration (e.g., certain clerical/ministerial functions and limited foreign-associate roles).

Rule 17a-3(a)(12) (associated-person records)

Requires the firm to keep a record for each associated person, including the U4, qualification/registration information, and compensation/agreement details.

Prehire review

Before hiring, a firm must investigate the applicant's good character, business reputation, qualifications, and experience — including reviewing the most recent Form U5 and other available records (Rule 3110(e)).

FINRA Rule 1122

Prohibits filing membership or registration information that is incomplete or inaccurate, or failing to correct such filings after notice.

Two-year felony bar window

A conviction for any felony (or specified misdemeanor) within the preceding 10 years is a statutory disqualification; a person may seek FINRA/SEC relief to associate despite it.

FINRA Rule 3110.12 (standards for review)

Sets standards for the reasonable review of correspondence and internal communications, allowing risk-based and lexicon/sampling review methods rather than reviewing every item.

FINRA Rule 2150

Prohibits improper use of customers' securities or funds, guarantees against loss to customers, and sharing in customer accounts except in proportion to the associated person's own contribution (with firm approval).

Sharing in a customer account

Permitted only with the customer's and firm's prior written authorization AND the sharing is proportional to the associated person's financial contribution (immediate-family exception eases the proportionality requirement).

FINRA Rule 2060

Prohibits using or benefiting from information obtained in a fiduciary capacity in a way that is contrary to the customer's interest.

Rule 17a-11 (early-warning notice)

Requires a broker-dealer to notify the SEC/FINRA the same day if its net capital falls below the required minimum, and within 24 hours for certain ratio or recordkeeping deficiencies.

FOCUS report (Rule 17a-5)

The Financial and Operational Combined Uniform Single Report — periodic (monthly/quarterly) financial reports broker-dealers file showing net capital and financial condition, plus an annual audited report.

FINRA Rule 4120/4160

4120: regulatory notification and business curtailment when capital is impaired. 4160: verification of assets on FINRA's request — a firm must obtain written confirmation from a counterparty holding its assets.

Rule 15c2-1 / 8c-1 (hypothecation)

Limit how a broker-dealer may rehypothecate (re-pledge) customer securities: it cannot commingle customers' securities without consent or pledge them for more than the customers owe.

SOX §404

Requires management to assess and report on the effectiveness of internal control over financial reporting (applies to public companies; relevant when supervising issuer/financial disclosures).

FINRA Rule 4511 (general recordkeeping)

Requires members to make and preserve books and records as required by FINRA rules, the Exchange Act, and SEA rules, and to preserve them in a permitted format (e.g., for 6 years unless a shorter period is specified).

Rule 17a-4(f) (WORM storage)

Permits electronic storage of records if the medium preserves them in a non-rewriteable, non-erasable (Write Once Read Many) format, with required indexing and a designated third-party access undertaking.

FINRA Rule 4570 (custodian of books and records)

A firm ceasing operations must designate a custodian responsible for the firm's books and records and notify FINRA of who and where they are.

CEO/CCO annual certification timing

Under Rule 3130, the CEO must certify compliance processes annually; the certification must be reviewed with the CCO and presented to the board/audit committee (or equivalent).

Networking arrangement (bank BD)

Rule 3160 governs broker-dealer services on bank premises — unregistered bank employees may refer customers and receive only a nominal, non-transaction-based fee, with required NDIP disclosures.

FINRA Rule 2080 court-confirmation requirement

Expungement relief in an arbitration award is not self-executing — the member/associated person must obtain a court order confirming the award (FINRA is named as a party unless it waives).

Three-pronged 2111 suitability

Reasonable-basis (the product is suitable for some investors), customer-specific (suitable for this customer's profile), and quantitative (the series of recommendations is not excessive/churning).

FINRA Rule 2010 as a catch-all

Even conduct not specifically barred by another rule can violate Rule 2010 if it falls short of high standards of commercial honor and just and equitable principles of trade.

Free-credit-balance rule (15c3-2 / 15c3-3)

Customers' free credit balances must be promptly available on demand and properly reflected in the firm's reserve computation; the firm cannot use them improperly.

Subordinated loan (Appendix D to 15c3-1)

A satisfactory subordination agreement lets borrowed funds count as net capital because the lender's claim is subordinated to customers/creditors; it must be approved before the loan counts.

Beneficial-ownership rule (CDD)

Under FinCEN's Customer Due Diligence rule, firms must identify and verify beneficial owners (25%+ ownership) and a control person of legal-entity customers at account opening.

FINRA Rule 4512 (customer account information)

Requires firms to maintain specified account information for each customer (name, address, whether of legal age, the associated person responsible, and signatures for discretionary/options accounts).

FINRA Rule 2270 (day-trading risk disclosure)

A firm promoting a day-trading strategy must furnish a risk disclosure statement to non-institutional customers before opening the account.

FINRA Rule 2264 (margin disclosure)

Customers must receive a margin disclosure statement at account opening and annually, explaining margin risks (e.g., the firm can sell securities without contacting the customer).

FINRA Rule 2266 (SIPC information)

Members must provide SIPC's website and telephone number to customers at account opening and annually, so customers can request the SIPC brochure.

FINRA Rule 2268 (predispute arbitration)

Sets the required disclosures and formatting for predispute arbitration clauses in customer agreements, and prohibits limiting a customer's forum rights.

Reg BI Care Obligation

Requires understanding the potential risks, rewards, and costs of a recommendation and having a reasonable basis to believe it is in the retail customer's best interest, considering reasonably available alternatives.

Reg BI Conflict of Interest Obligation

Requires written policies and procedures to identify and at least disclose (and in some cases eliminate or mitigate) conflicts, including sales contests and quotas based on specific securities.

FINRA Rule 2212/2213 (rankings & ratings)

2212 governs the use of investment company rankings in retail communications; 2213 governs the use of bond mutual fund volatility ratings — both require balanced, non-misleading presentation.

FINRA Rule 2216 (CMO communications)

Sets specific requirements for retail communications about collateralized mortgage obligations, including required disclosures and a prohibition on comparing CMOs to certificates of deposit.

FINRA Rule 156 / Rule 482

Rule 156 (Securities Act): investment company sales literature standards. Rule 482: 'omitting prospectus' advertising by investment companies that must include required performance/standardized data.

Established business relationship (DNC exception)

A firm may call a person on the National Do-Not-Call list if there is an established business relationship or prior express written consent, within the rule's time limits.

FINRA Rule 3250 (designation of accounts)

Customer accounts must be designated by name or number; if by number/symbol, the firm must keep a written statement of the customer's identity signed by the customer.

FINRA Rule 2114 (OTC equity recommendations)

Before recommending a non-exchange-listed (OTC) equity security, a firm must review current financial information and have a reasonable basis, given the higher risk of thin/manipulated markets.

Markup disclosure on retail debt

For most retail principal trades in corporate and agency debt, the confirmation must disclose the mark-up/mark-down as a total dollar amount and a percentage (when the firm also traded the same security that day).

Market maker obligations

A registered market maker must maintain continuous two-sided quotations (a firm bid and offer) during normal market hours in the securities in which it is registered, subject to size and spread rules.

FINRA Rule 5210 (publication of transactions/quotes)

Prohibits publishing or circulating any report of a transaction or quotation that the member knows or has reason to believe is fictitious or manipulative (e.g., painting the tape, matched orders).

FINRA Rule 5220 (offers at stated prices)

A member that makes an offer to buy or sell at a stated price must be prepared to honor it for at least one normal unit of trading (a 'firm quote'), unless otherwise stated.

FINRA Rule 5250 (payments for market making)

Prohibits a member from accepting payment or other consideration from an issuer for publishing a quotation or acting as a market maker, to keep markets independent.

Trade-through exceptions (Reg NMS 611)

Allowed exceptions include intermarket sweep orders (ISOs), self-help against a non-responsive market center, flickering/crossed quotes, and benchmark/stopped-stock trades.

Locked vs crossed market

Locked: the bid equals the offer. Crossed: the bid is higher than the offer. Reg NMS Rule 610 / FINRA rules require firms to avoid displaying quotes that lock or cross the market.

Order marking under Reg SHO

Every sell order must be marked 'long,' 'short,' or 'short exempt.' A 'long' marking requires the seller to be deemed to own the security and reasonably expect delivery.

Threshold security (Reg SHO)

A security with large, persistent fails-to-deliver appearing on a threshold list; extended fails trigger mandatory close-out and pre-borrow ('penalty box') requirements.

FINRA Rule 6432 (15c2-11 compliance)

Before publishing a quotation in an OTC equity security, a member must have current issuer information available to the public, supporting SEC Rule 15c2-11.

TRACE reporting timeframe

Most TRACE-eligible transactions must be reported within 15 minutes of the time of execution (shorter windows apply to certain Treasury securities).

TRF reporting party

For a TRF trade between two members, the executing (sell-side) member reports; if only one party is a member, that member reports. Trades during market hours are generally reported within 10 seconds.

CAT clock synchronization

Industry members must synchronize their business clocks used to record CAT-reportable events to within a specified tolerance of the NIST atomic clock (e.g., 50 milliseconds for computer systems).

FINRA Rule 5340 (pre-time stamping)

Prohibits using a time stamp on an order ticket before the order is actually received, which would misrepresent the order's true sequence.

Passive market making (Reg M Rule 103)

Permits a distribution participant to make a market in the offered Nasdaq security during the restricted period, subject to bid and volume limits, as an exception to Reg M's bidding prohibition.

Penalty bid / syndicate covering

A penalty bid lets the lead underwriter reclaim the selling concession from a syndicate member whose customers flip new-issue shares; syndicate covering transactions buy back shares to cover an over-allotment.

Volatility trading pause vs halt

A LULD pause is a brief (typically 5-minute) single-stock pause when trading would occur outside price bands; a regulatory halt (e.g., for news or 6121 volatility) stops trading more broadly and is lifted by the primary listing market.

Shelf registration (Rule 415)

Lets an issuer register securities once and sell them 'off the shelf' over time as market conditions allow; well-known seasoned issuers (WKSIs) get automatic effectiveness under Rule 405.

Underwriter's spread (gross spread)

The underwriter's total compensation in an offering = the management fee + the underwriting fee + the selling concession.

Greenshoe (over-allotment option)

An option allowing the syndicate to sell up to 15% more shares than originally offered, used to cover over-allotments and help stabilize the price after the offering.

Regulation A (Reg A+)

A conditional small-issues exemption: Tier 1 up to $20 million and Tier 2 up to $75 million per 12 months. Tier 2 preempts state blue-sky review but requires audited financials and ongoing reporting.

Rule 147 / 147A (intrastate)

Exemptions for genuine intrastate offerings — the issuer and the purchasers must meet residency and 'doing business within the state' requirements (147A relaxes the offer-only-in-state limit).

Regulation S

Exempts offers and sales of securities that occur outside the United States (offshore), under Rules 901-904, from Securities Act registration.

QIB (Qualified Institutional Buyer)

An institution that, in the aggregate, owns and invests on a discretionary basis at least $100 million in securities of unaffiliated issuers — the gatekeeper for Rule 144A resales.

Schedule TO vs Schedule 14D-9

Schedule TO is the tender-offer statement filed by the bidder. Schedule 14D-9 is the subject company's required response (recommend, reject, or remain neutral) to the offer.

FINRA Rule 5122/5123 (member private placements)

5122 governs a member's private placement of ITS OWN securities (disclosure, use-of-proceeds, filing). 5123 requires members to file most private placements they sell with FINRA within 15 days of first sale.

FINRA Rule 5141 (fixed price offerings)

Prohibits members from offering or selling securities in a fixed-price offering at a price below the stated public offering price (no selling at a discount to favored buyers).

FINRA Rule 5190

Sets notification requirements to FINRA for members participating in offerings — including the restricted period determination under Reg M and pricing/trading information.

Rule 145 (reclassifications)

Treats certain reclassifications, mergers, consolidations, and asset transfers requiring a shareholder vote as 'offers/sales' of securities subject to Securities Act registration (often on Form S-4).

Section 16 (insiders)

Directors, officers, and 10%+ beneficial owners must report their holdings (Forms 3/4/5) and disgorge short-swing profits from purchases and sales within any 6-month period.

Rule 13e-3 (going private)

Governs going-private transactions by an issuer or its affiliates, requiring detailed disclosure (Schedule 13E-3) about fairness to unaffiliated shareholders.

HSR Act (Hart-Scott-Rodino)

Requires pre-merger notification to the FTC and DOJ and a waiting period before transactions above size thresholds can close, allowing antitrust review.

Quiet period / research blackout (Rule 2241)

Restricts a participating member from publishing research on an issuer for a defined period after an IPO or around a secondary offering, to prevent banking from influencing research timing.

Rule 134 (tombstone)

A communication that is deemed not to be a 'prospectus' — a limited, factual notice of an offering. It cannot be used to solicit orders and must contain required legends.

Rule 15c2-8 (prospectus delivery)

Requires broker-dealers to take reasonable steps to deliver a preliminary or final prospectus in connection with a registered offering, including to anyone who requests one.

WKSI (well-known seasoned issuer)

A large, seasoned reporting issuer (Rule 405) eligible for automatic shelf registration, more flexible communications, and free writing prospectuses with fewer restrictions.

Bankruptcy absolute priority

Order of claims in liquidation: secured creditors, then unsecured creditors (including bondholders), then subordinated debt, then preferred stockholders, and finally common stockholders (the residual).

Due diligence defense (§11 / Rule 176)

Conducting a 'reasonable investigation' of an offering gives underwriters a due-diligence defense against Section 11 liability for a materially false or misleading registration statement.

Designated principal

FINRA Rule 3110 requires the firm to designate one or more appropriately registered principals with authority to carry out supervisory responsibilities for each type of business in which it engages.

Form U5 'for cause' termination

If a person is terminated for cause (e.g., violating laws/rules), the U5 must describe the reason; a defamatory or knowingly false U5 disclosure can expose the firm to liability.

FINRA Rule 1010 (electronic filing)

Requires that Forms U4, U5, BD, BDW, BR and related uniform forms be filed electronically through the CRD/Web CRD system.

Disclosure events on Form U4

Customer complaints, regulatory actions, criminal charges/convictions, certain financial events (bankruptcies, liens, judgments), and terminations must be disclosed and timely amended.

FINRA Rule 3120 annual report contents

The supervisory-controls report to senior management summarizes the firm's supervisory system, the test results, and any significant deficiencies and remedial measures.

Annual compliance meeting (Rule 3110(a)(7))

Each registered person must attend at least one interview/meeting per year with a principal to discuss compliance matters relevant to their activities.

FINRA Rule 2150(c) (sharing limits)

An associated person may share in a customer account only in direct proportion to their financial contribution, with both firm and customer written approval (immediate-family accounts are excepted from proportionality).

FINRA Rule 3110(c) (internal inspections)

Requires firms to conduct internal inspections of offices on the prescribed schedule, with written inspection reports addressing supervisory deficiencies and required controls (e.g., customer-fund handling, change of address).

Customer reserve formula (15c3-3)

A weekly (or monthly for some) computation comparing customer credits to customer debits; any net credit must be deposited in the Special Reserve Bank Account for the Exclusive Benefit of Customers.

Possession or control (15c3-3)

The firm must have physical possession or control of customers' fully paid and excess-margin securities and promptly resolve any deficits (e.g., by buy-in or recall).

FINRA Rule 4540 (clearing-firm reporting)

Requires clearing/carrying firms to submit specified reports and data to FINRA in the format and timeframe FINRA prescribes.

Statutory underwriter risk in records

A principal must ensure the firm's recordkeeping captures the data needed for net-capital and reserve computations; missing records can themselves trigger early-warning under 17a-11.

FINRA Rule 4530 reporting categories

Includes the firm finding it/an associated person violated rules, being subject to certain written customer complaints alleging theft/forgery, certain settlements, and being named in specified proceedings.

FINRA Rule 8210 (information requests)

FINRA can require a member or associated person to provide information, testimony, and access to books and records; failing to respond is itself a serious violation.

Acceptance, Waiver and Consent (AWC)

A settlement in which a respondent accepts findings and a sanction without a hearing and waives appeal rights; a common resolution under the FINRA Code of Procedure.

Minor Rule Violation (MRV) plan

Lets FINRA dispose of minor, technical rule violations with a fine (capped, e.g., $2,500) and a letter, without a formal disciplinary proceeding, if the respondent does not contest it.

FINRA Rule 13200 (industry arbitration)

Disputes between or among members and associated persons arising out of the business must be arbitrated under the Code if requested, except statutory discrimination claims (which require agreement).

Simplified arbitration

For smaller customer/industry claims (at or below the threshold, e.g., $50,000), a single arbitrator decides, often on the papers without an in-person hearing unless requested.

FINRA Rule 2261 (disclosure of financial condition)

A member must make specified financial information (balance sheet) available to a customer on request, reflecting the firm's most recent FOCUS/audited figures.

FINRA Rule 4160 (verification of assets)

On FINRA's request, a member must obtain written verification from a counterparty (e.g., a bank or another BD) confirming assets the member maintains there for net-capital purposes.

Reg T payment / Rule 15c3-3(m)

If a customer does not pay for a cash-account purchase by the Reg T deadline, the firm must cancel or liquidate the position (and may need a Reg T extension); frequent extensions are scrutinized.

Free-riding (cash account)

Buying and selling a security in a cash account without paying for the purchase (using sale proceeds to cover the buy). Reg T prohibits it and can trigger a 90-day account freeze.

Fidelity bond minimum & deductible

Coverage scales with the firm's required net capital; the maximum allowable deductible is limited (a deductible above the threshold reduces net capital).

FINRA Rule 4520 (sweep/financial recordkeeping)

Supports FINRA's risk monitoring by requiring members to provide financial and operational data; principals must ensure timely, accurate submissions.

Carrying vs introducing firm

An introducing firm sends customer orders/accounts to a clearing (carrying) firm that holds customer funds/securities and handles settlement; the 4311 carrying agreement allocates these duties.

FINRA Rule 4330 (use of customer securities)

Governs a firm's permissible use of customer securities (e.g., fully paid lending programs), requiring written agreements, disclosures, and reasonable assurance the firm can replace them.

Two-year accessibility rule

Under 17a-4, records required to be retained must be kept readily accessible for the first 2 years (in or near the office), even if the full retention period is longer (e.g., 6 years).

Numbered/numerical account

Allowed under Rule 3250 only if a signed statement attesting to ownership is on file; used for privacy, not to hide the customer's identity from the firm.

Transfer-on-death (TOD) account

A registration that passes account assets directly to named beneficiaries at death, avoiding probate; the firm must follow its procedures to retitle on proper documentation.

FINRA Rule 2090 essential facts

'Essential facts' are those needed to effectively service the account, act on special handling instructions, understand the authority of each person on the account, and comply with laws/rules.

SAR confidentiality

A firm and its employees may not disclose to anyone involved that a SAR has been filed; doing so ('tipping off') is a violation of the Bank Secrecy Act.

AML independent testing frequency

Most firms must conduct independent AML testing annually; firms that do not execute transactions with customers or hold customer accounts may test every 2 years.

Reg BI vs suitability

Reg BI raises the standard for retail recommendations to 'best interest,' adding explicit Disclosure, Care, Conflict, and Compliance obligations beyond traditional Rule 2111 suitability.

FINRA Rule 2210 content standards

All communications must be fair, balanced, and not misleading; predictions/projections of performance are prohibited (with narrow exceptions), and risks must be disclosed alongside benefits.

Institutional communication

A communication distributed only to institutional investors (e.g., banks, registered firms, entities with $50 million in assets). It does not require pre-use principal approval but the firm must supervise it.

Filing exclusions (Rule 2210)

Certain retail communications are excluded from FINRA filing — e.g., those that do not promote a product/service, prospectuses/red herrings already filed with the SEC, and tombstones.

FINRA Rule 2213 (volatility ratings)

A bond mutual fund volatility rating may be used only if it is based on objective criteria and accompanied by required disclosures; predictive 'risk' labels are restricted.

Holding of customer mail (Rule 3150)

A firm may hold a customer's mail for a limited time on the customer's written instruction (e.g., travel), with conditions, but cannot hold it indefinitely to conceal account activity.

FINRA Rule 2124 (net transactions)

Before executing a 'net' transaction with a non-institutional customer (where the firm's compensation is built into the price), the firm must obtain the customer's prior written consent.

Senior investor protections (2165/4512)

Firms may place a temporary hold on disbursements where financial exploitation of a 'specified adult' is suspected, and should obtain a trusted-contact person at account opening.

Day-trading risk disclosure timing

The Rule 2270 disclosure must be delivered before opening a non-institutional account that the firm promotes for day trading (or before approving it for the strategy).

Three-quote rule (best execution)

In illiquid non-quoted securities, historic FINRA guidance suggested obtaining quotes from multiple (e.g., three) dealers to satisfy the duty of best execution; the duty is now a 'regular and rigorous' review.

Interpositioning

Inserting a third party (another broker-dealer) between the firm and the best market without justification, adding cost to the customer — prohibited under best-execution rules (Rule 5310).

Bona fide market making (Reg SHO)

An exception to the locate requirement for market makers establishing/liquidating positions in connection with bona fide market making — not for speculative naked shorting.

NMS stock vs OTC equity

NMS stocks are exchange-listed and subject to Reg NMS; OTC (non-listed) equities trade through inter-dealer systems and have their own quoting rules (e.g., Rule 15c2-11, FINRA 6400 series).

Trade-reporting 'as/of'

A trade not reported within the required window must be reported as soon as possible and marked late ('.SLD'/as-of), and persistent late reporting is a supervisory red flag.

Riskless principal trade

A trade where the firm, after receiving a customer order, buys (or sells) as principal and then offsets it to fill the customer at the same price plus a disclosed mark-up; reporting and confirmation rules apply.

Order Audit Trail (superseded by CAT)

OATS was FINRA's legacy order-event audit system; it has been retired in favor of the SEC-mandated Consolidated Audit Trail (CAT).

FINRA Rule 6121 (volatility halts)

Authorizes trading halts in NMS stocks due to extraordinary market volatility, coordinated with the Reg NMS LULD plan and market-wide circuit breakers.

Penny stock (Rule 3a51-1)

Generally an equity security under $5 that is not exchange-listed; selling penny stocks to new customers triggers heightened disclosure, suitability, and account-statement requirements (15g rules).

Regulation ATS

Governs alternative trading systems (e.g., ECNs, dark pools): registration as a broker-dealer, Form ATS filing, fair access, and confidentiality/recordkeeping requirements.

Securities Act §11 liability

Imposes liability on issuers, directors, underwriters, and experts for a registration statement containing a material misstatement or omission as of its effective date.

Securities Act §12(a)(2)

Imposes liability for selling securities by means of a prospectus or oral communication containing a material misstatement or omission; the seller can defend by showing reasonable care.

Section 4(a)(2)

The statutory private-offering exemption — transactions by an issuer not involving any public offering. Regulation D is the safe harbor that operationalizes it.

Rule 506(b) vs 506(c)

506(b): no general solicitation; up to 35 sophisticated non-accredited investors plus unlimited accredited. 506(c): general solicitation permitted but accredited-only, with reasonable-steps verification.

Restricted vs control securities

Restricted securities are acquired in an unregistered transaction (carry a holding period); control securities are held by an affiliate (subject to volume/manner limits). Both resell under Rule 144.

Rule 144 volume limit (affiliates)

An affiliate's resales in any 3-month period are capped at the greater of 1% of outstanding shares or the average weekly trading volume over the prior 4 weeks, with Form 144 filed for larger sales.

Confidential Information Memorandum (CIM)

The detailed marketing document a sell-side advisor sends to qualified, NDA-bound buyers describing the target company in an M&A process.

Engagement letter

The contract between an investment bank and its client setting scope, fees, exclusivity, indemnification, and the 'tail' period in which a later-closed deal still earns a fee.

FINRA Rule 5160

Requires disclosure of the price and concession terms among members in selling agreements for a fixed-price offering.

Stabilization vs manipulation

Stabilizing bids (Reg M Rule 104) are the only legally permitted price support during a distribution — capped at the offering price and disclosed; all other manipulation is prohibited under §9, §10(b), and Rule 10b-5.

Spinning (Rule 5131)

Allocating shares of a hot IPO to executives/directors of a current or prospective investment-banking client to win or reward business — prohibited.

Rule 137/138/139 (research safe harbors)

Permit the publication/distribution of certain research around a distribution without it being an 'offer': 137 (non-participants), 138 (other securities of the issuer), 139 (issuer-specific, for covered issuers).

Pre-filing communications

Before a registration statement is filed, offers are prohibited; limited factual business communications (Rule 168/169) and, for EGCs/WKSIs, certain testing-the-waters/Rule 163 communications are allowed.

Underwriting syndicate documents

The Agreement Among Underwriters (AAU) binds syndicate members; the Underwriting Agreement is between the issuer and the lead; Selected Dealers' Agreements bring in the broader selling group.

FINRA Rule 6130 (IPO transactions)

Requires the underwriters/managing underwriter to provide FINRA specified information related to initial public offerings (e.g., the indications and final pricing data).

Section 2(a)(11) underwriter definition

Defines an 'underwriter' broadly as anyone who buys from an issuer with a view to distribution or participates in such a distribution — Rules 144/144A provide safe harbors out of underwriter status.