Chapter Three Practice Question Answers
1. Answer: A. A municipal securities firm must pay an initial registration fee of $1,000 and an annual registration fee of $1,000.
2. Answer: D. Failure to pay the annual fee may result in a $25 monthly late fee, as well as an additional fee on the unpaid balance. The annual fee must be paid by October 31. Form A-12 must be affirmed by January 31 each year and must be updated within 30 days of becoming inaccurate.
3. Answer: C. Municipal advisors must maintain copies of their WSPs for five years.
4. Answer: A. Even contributions to federal offices such as the U.S. Senate or the Presidency are subject to the pay-to-play rule. The ban can be triggered if the candidate currently holds an office that can direct business to the advisory firm. This is certainly true of the governor of Nebraska. Municipal advisor professionals who are eligible to vote for the candidate may donate up to $250 per election to the candidate without triggering the ban.
5. Answer: C. Municipal advisory professionals (MAPs) are allowed to make contributions up to $250 per election to candidates for whom they can vote without triggering MSRB Rule G-37’s two-year ban on business for their firms. Since Donnie lives in Virginia, and his contribution is less than $250, he can contribute to the candidate from that state without triggering the ban. However, since he doesn’t live in Maryland, he cannot contribute to the candidate from that state without triggering the ban. In the latter case, the amount of his contribution is irrelevant; the ban will be triggered for any contribution that Donnie makes.
6. Answer: B. In order to avoid a ban on engaging in municipal advisory business with State A, the representative must contribute no more than $250 per election to each official of the state.
7. Answer: B. Advisors prohibited from engaging in municipal advisory business under this rule may qualify for an automatic exemption from the rule if t