Chapter 2 Practice Questions
1. A person must be registered as a Municipal Securities Representative to engage in all of the following except:
A. Communicating with public investors in municipal securities
B. Underwriting municipal securities
C. Providing investment advice about municipal securities
D. Trading municipal bond funds
2. Which of the following statements about MSRB Rule G-27 (regarding supervisory responsibilities) is incorrect?
A. Broker-dealers are obligated to ensure that their firms and all employees comply with applicable rules and laws.
B. Broker-dealers must conduct a review of their municipal securities activities once every two years to ensure compliance with MSRB and SEC rules.
C. Broker-dealers must designate appropriate principals to enforce supervisory controls.
D. Broker-dealers must establish and maintain written compliance procedures as a guide for employee behavior.
3. Which of the following would be least likely to trigger the requirement to update written supervisory procedures under MSRB Rule G-27?
A. Changes to MSRB disclosure requirements
B. The addition of 529 savings plans to a broker-dealer’s product line
C. Changes in personnel at a firm
D. The addition of dealer services where a firm had previously only acted as a broker
4. Which of the following statements about principal requirements is true?
A. All municipal securities firms, including bank dealers, must have at least one FINOP.
B. There are no exceptions to the rule that all municipal securities broker-dealers have at least two Municipal Securities Principals.
C. If a firm’s activities are limited to municipal fund securities, a Municipal Fund Securities Limited Principal may be counted as a Municipal Securities Principal.
D. A broker-dealer with fewer than eleven full-time employees engaged in the performance of its municipal secu