Exam Alert: Free writing prospectuses must comply with FINRA communication rules

A free writing prospectus is a written offer to sell (or solicitation of an offer to buy). Effective October 21, 2010, a free writing prospectus Continue reading

A free writing prospectus is a written offer to sell (or solicitation of an offer to buy).  Effective October 21, 2010, a free writing prospectus distributed by a broker-dealer to the public must be approved by a registered principal and must comply with FINRA content standards and filing requirements for advertisements and sales literature.  This is a change from previous interpretive guidance that excluded free writing prospectuses from these requirements. Relevant to: Series 24, Series 62, Series 79.

http://www.finra.org/Industry/Regulation/Notices/2010/P122311

Exam Alert: Outside business activities require prior notice

Effective December 15, 2010, registered persons must provide prior written notice to their member firms before engaging in Continue reading

Effective December 15, 2010, registered persons must provide prior written notice to their member firms before engaging in outside business activities.  The previous rule only required registered persons to provide prompt written notice.  The new rule also requires that firms review the proposed activities.  For registered persons who were engaged in outside business activities as of December 15, 2010, firms have until June 15, 2011 to review such activities. Relevant to: Series 7, Series 6, Series 24, Series 26, Series 79, Series 62.

http://www.finra.org/Industry/Regulation/Notices/2010/P122271

Exam Alert: FINRA investigations require encrypted information

As of December 29, 2010, when providing information for a FINRA investigation via a portable media device, the information must be encrypted. This includes Continue reading

As of December 29, 2010, when providing information for a FINRA investigation via a portable media device, the information must be encrypted.  This includes information on flash drives, CDs, laptop computers, and other digital storage devices.  The encryption must meet industry standards for strong encryption and the encryption key must be provided to FINRA staff in a communication (email, fax, or letter) separate from the information. Relevant to: Series 6, Series 24, Series 26, Series 79, Series 62.

Solomon Exam Prep boosts Series 79 Investment Banking Exam Simulator

For many, the hardest part of the FINRA Series 79 Investment Banking Exam relates to material covered in section one of the FINRA exam outline Continue reading

For many, the hardest part of the FINRA Series 79 Investment Banking Exam relates to material covered in section one of the FINRA exam outline: Collection, Analysis and Evaluation of Data. “Not only is this first section particularly challenging,” says Solomon Exam Prep President Jeremy Solomon, “it contains 75 questions or 43% of the 175-question exam. To pass the Series 79 exam, it’s imperative that the test-taker understand this subject matter.” To help customers gain a better understanding of this material, Solomon Exam Prep has added new valuation and transaction analysis questions to its Series 79 online exam simulator. These questions are based on original financials that the exam simulator customer must read and interpret, like the actual Series 79 investment banking exam.

Solomon Exam Prep publishes FINRA Series 26 Practice Exams with Bonus Questions

If you have to take the FINRA Investment Company Products/Variable Contracts Limited Principal Exam, taking practice tests is one of the best ways to study. Continue reading

If you have to take the FINRA Investment Company Products/Variable Contracts Limited Principal Exam, taking practice tests is one of the best ways to study. Solomon Exam Prep has created 420 high quality practice questions that test the five subject areas for the FINRA Series 26 exam and offer detailed rationales so students can learn from their mistakes.

Priced at $29.95, the Solomon Exam Prep Series 26 product is a terrific deal. “On a per question basis, the Solomon Exam Prep Series 26 practice test product is less than half the price of most the competition,” says President, Jeremy Solomon. “We’re committed to helping our customers pass their FINRA and NASAA exams quickly and affordably.”

Three sample questions:

First State Bank serves as trustee of the Milton Family Trust. As trustee, First State Bank has received information as to ownership of securities and would like to use this information to solicit purchases. Based on FINRA Rule 2060, which of the following is most accurate regarding First State Bank’s ability to use this information?

A. Because First State Bank serves as trustee, they are entitled to use this information to solicit purchases, sales or exchanges

B. Because First State Bank serves as trustee, they are never permitted to use this information to solicit purchases, sales or exchanges

C. Because First State Bank serves as trustee, they are not permitted to use this information to solicit purchases, sales or exchanges except at the request and on behalf of the issuer

D. Because a financial institution is the trustee, First State Bank does not serve a fiduciary role and may use this information to solicit purchases, sales or exchanges

Correct Answer: C

Why: FINRA Rule 2060 states that information obtained through a fiduciary capacity may not be used to solicit purchases, sales or exchanges except at the request and on behalf of the issuer. As trustee, First State Bank is considered a fiduciary and such rule is applicable. Other fiduciary roles this rule applies to include paying agent, transfer agent, and others who operate in a similar fiduciary capacity.

All of the following statements regarding an investment company are considered misleading except which of the following?

A. XYZ company has outperformed the S&P Index for the past 10 years

B. XYZ has the most effective and experienced management company in the state

C. On average, XYZ clients experience a 5% greater return than the average return for clients at ABC company

D. XYZ is the oldest investment company in the state

Correct Answer: D

Why: If accurate, stating that XYZ is the oldest investment company in the state is not a misleading statement regarding the characteristics of the investment company. All of the other statements are considered misleading because they either exaggerate claims about management skills, or give performance data which is not properly warranted or explained.

You have a brokerage account with a broker-dealer fully insured by SIPC containing securities worth $375,000 and $150,000 in cash. The broker-dealer suddenly seeks bankruptcy protection. How big of a check do you receive from the SIPC?

A. $450,000

B. $475,000

C. $500,000

D. $525,000

Correct Answer: B

Why: Your account holdings are insured up to a maximum of $500,000, of which no more than $100,000 can be in cash. You would receive $375,000 for your securities and $100,000 for the cash in your account, and would then be a general creditor of the firm for the remaining $50,000.

To order, go to: Solomon Exam Prep

For more information about the Series 26 exam, see the FINRA exam outline

Big Changes Ahead for the Series 7 Exam

At the FINRA annual conference in May in Baltimore, FINRA announced that it is in what sounds like the final stages of a substantial revision to the Series 7 Continue reading

At the FINRA annual conference in May in Baltimore, FINRA announced that it is in what sounds like the final stages of a substantial revision to the Series 7 General Securities Representative Exam. The new Series 7 exam will test five major job functions, down from the current seven. Within the five major job functions, the revised Series 7 exam will test 29 tasks associated with the major job functions of a registered representative. According to the FINRA, the new Series 7 exam will contain “200+ knowledge statements” associated with the five functions and the 29 tasks.

The five job functions of the new Series 7 General Securities Representative Exam will be:

“Seeks business for the broker-dealer through customers and potential customers”

“Evaluates customers’ financial status, financial needs and risk tolerance, and helps them identify their investment objectives”

“Opens accounts, transfers assets and maintains appropriate account records”

“Provides customers with information on investments and makes suitable recommendations”

“Obtains and verifies customer’s purchase and sales instructions, enters orders and follows up”

These five functions are the same or substantially similar to ones on the current Series 7 exam. A notable change from the existing Series 7 exam is the addition of evaluating customer “risk tolerance.”

Removed or merged into other categories are:

“Explains the organization, participants, and functions of various securities markets and the principal factors that affect them”

“Monitors the customer’s portfolio and makes recommendations consistent with changes in economic and financial conditions as well as the customer’s needs and objectives”

The revised Series 7 will still be 250 questions long with an additional ten non-scored “pre-test” questions that will be randomly distributed on the exam. The revised Series 7 exam will remain six hours in length, broken into two three-hour segments.

Although no specific timeline was provided, the FINRA announcement said that the new Series 7 content outline would be submitted to the SEC first and then once the SEC approves the proposed changes, the new content outline would be posted on the FINRA web site and then some time after that the test would be launched at the testing centers.

Meet us in Baltimore at the FINRA Annual Conference

Solomon Exam Prep will be an exhibitor at the FINRA Annual Conference May 26-28 in Baltimore at the Baltimore Marriott Waterfront Hotel. Continue reading

Solomon Exam Prep will be an exhibitor at the FINRA Annual Conference May 26-28 in Baltimore at the Baltimore Marriott Waterfront Hotel.

For more information, please go to finra.org

Solomon Exam Prep Publishes First Series 7 Training App for the Blackberry

Do you need to take the FINRA Series 7 exam? Do you have limited time to study? Do you own a Blackberry? If you answered yes to these questions, Continue reading

Do you need to take the FINRA Series 7 exam? Do you have limited time to study? Do you own a Blackberry? If you answered yes to these questions, then you’ve come to the right place!

Officially known as the Qualification Examination for General Securities Registered Representatives, the Series 7 exam qualifies a candidate to sell all types of securities. The examination tests candidates’ knowledge of the critical functions of the General Securities Registered Representative. The Series 7 exam was developed and is administered by the Financial Industry Regulatory Authority FINRA.

The Solomon Exam Prep Series 7 BlackBerry® app offers 350 practice questions from the same topic categories the seven critical functions of a registered representative and in the same proportion as the actual Series 7 exam.

Each practice exam on the Solomon Exam Prep Series 7 BlackBerry app is 50 questions long. Each question is followed by an immediate answer and explanation, as well as an opportunity to review the question. Users may pause at any time and resume at the same point later on. At the end of each 50 question practice test, users receive a score and a pass/fail grade.

To order, please go to Blackberry App World here:

Solomon Exam Prep Publishes first Series 79 Exam Simulator

According to FINRA and the SEC, after May 3, anyone performing the duties of an investment banker will need to pass the new Investment Banking Representative Qualification Examination, aka the Series 79. Continue reading

According to FINRA and the SEC, after May 3, anyone performing the duties of an investment banker will need to pass the new Investment Banking Representative Qualification Examination, aka the Series 79.

This is not an easy exam, as many have discovered, and so Solomon Exam Prep has created a high quality online exam simulator with over 750 questions and detailed rationales.

If you have to sit for the Series 79 and bone up on private placements, transaction structures, bidding procedures, Chinese Wall policies and procedures and fairness opinions, there is no better way than to use Solomon Exam Prep’s online Exam Simulator.

Solomon Exam Prep Publishes Series 62 Exam Simulator

Continuing its strong tradition of experience-based learning products, Solomon Exam Prep has published an innovative exam simulator for the Series 62. Continue reading

Continuing its strong tradition of experience-based learning products, Solomon Exam Prep has published an innovative exam simulator for the FINRA Corporate Securities Limited Representative Exam.  With 900+ questions and detailed explanatory rationales, the Solomon Exam Prep Series 62 exam simulator provides full practice exams, with feedback, as well as topical quizzes.

If you trade corporate securities only, including corporate stocks and bonds, rights, warrants, REITs, collateralized mortgage obligations (CMOs) and exchange traded funds (ETFs) and you have to take the the FINRA Series 62 exam, “there is no better way to pass the Series 62 exam than by taking practice exams on an exam simulator” according to Jeremy Solomon, President.