Exam Alert: FINRA Revises Public, Non-public Arbitrator Standards

Effective June 26, 2015, FINRA will alter its rules regarding who will be consider a public or non-public arbitrator. The change will make it so that any arbitrator who has worked in the financial industry for any period of time will be considered a non-public arbitrator. Also, arbitrators who represent investors or the financial industry as a significant part of their business will be considered non-public arbitrators, but may become public arbitrators after a cooling-off period. Continue reading

Exam AlertEffective June 26, 2015, FINRA will alter its rules regarding who will be considered a public or non-public arbitrator. The change will make it so that any arbitrator who has worked in the financial industry for any period of time will be considered a non-public arbitrator. Also, arbitrators who represent investors or the financial industry as a significant part of their business will be considered non-public arbitrators, but may become public arbitrators after a cooling-off period. The cooling-off period lasts five years if they were disqualified from being a public arbitrator based on their own actions. The cooling-off period lasts two years if they were disqualified from being a public arbitrator based on someone else’s actions.

Source: SEC Approves Amendments to Arbitration Codes to Revise the Definitions of Non-Public and Public Arbitrator

This alert applies to the Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 62, Series 79, and Series 82.

Study Question of the Month – June

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 24, 26, 27, 28, 62, and 99. –ANSWER POSTED– Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Study Question

Question (Relevant to the Series 24Series 26Series 27, Series 28, Series 62, and Series 99):

Which of the following is true regarding lost and stolen security reporting requirements?

I. All reports of securities that have been lost for one business day should be reported to the Commission

II. All reports of lost securities in which there is a substantial belief that theft was involved should be reported to the Commission

III. All reports of lost or stolen securities should be reported promptly to the FBI

IV. All reports of lost securities in which there is a substantial belief that theft was involved should be reported to the FBI

Answers:

A. I and III

B. II and IV

C. I and IV

D. II and III

Correct Answer: B. II and IV

Rationale: All reports in which there is substantial belief that theft was involved should be reported to the Commission within one business day of such a discovery. In addition, when there is believed to be criminal activity involved, it should be reported to the Federal Bureau of Investigation. Securities that have been lost for two business days should be reported to the Commission when criminal activity is not suspected.

Congratulations Roseann L., this month’s Study Question of the Month winner!

All study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Month – May

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 24, 26, 27, and 28. –ANSWER POSTED– Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Study Question

Question (Relevant to the Series 6, Series 7, Series 24, Series 26, Series 27, and Series 28):

According to the Code of Arbitration, excluding claims alleging discrimination or sexual harassment, arbitration of disputes is mandatory for all of the following except:

Answers:

A. Disputes between two member firms

B. Disputes brought by member firms against customers, if required by contract

C. Disputes brought by member firms against customers for claims in excess of $25,000

D. Disputes brought by associated persons against customers, if the customer consents

Correct Answer: C. Disputes brought by member firms against customers for claims in excess of $25,000

Rationale: Arbitration of disputes involving customers is mandatory only if the customer consents to arbitration or if required by contract. Claims alleging discrimination or sexual harassment cannot be arbitrated, except by agreement of all disputing parties.

(No winner this month. There were no correct answers submitted. Try back next month!)

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Month – March

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, 24, 27, 62, 79, 82, and 99. –ANSWER POSTED– Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

Study Question

Question (Relevant to the Series 7, Series 24, Series 27, Series 62, Series 79, Series 82, and Series 99):

Jenny is an employee of a broker-dealer. She is a receptionist at the firm and is not a registered representative. She would like to purchase shares in an IPO that she has recently heard about at her office. Which of the following BEST describes her participation?

Answers:

A. Jenny may purchase shares of the IPO on the same basis as other customers.

B. Jenny is prohibited from purchasing shares of the IPO, but her spouse who she supports may purchase shares on the same basis as other customers.

C. Jenny may purchase shares of the IPO as long as the purchase quantity doesn’t exceed 200 shares.

D. Jenny is prohibited from purchasing shares of the IPO.

Correct Answer: D. Jenny is prohibited from purchasing shares of the IPO.

Rationale: FINRA Rule 5130 – Restrictions on the Purchase and Sale of Initial Equity Public Offerings – prohibits a member firm (broker/dealer) from selling shares of an IPO to an account in which a “restricted person“ has a beneficial interest, subject to certain limited exceptions. All employees of a broker-dealer are considered “restricted persons“ under the rule.

Congratulations! This month’s winner is Alexandra K.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Month – January

This month’s study question from the Solomon Online Exam Simulator question database is now available. Submit your answer for a chance to win a $10 Starbucks gift card! Relevant to the Series 7, 24, 26, 27, 51, 52, 53, 62, 79, 82, 99. –ANSWER POSTED– Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

***Submit your answer to info@solomonexamprep.com to be entered to win a $10 Starbucks gift card.***

 Study Question

Question (Relevant to the Series 7Series 24, Series 26, Series 27, Series 51, Series 52, Series 53Series 62Series 79, Series 82, Series 99) 

Jon and Jenny are married. They each have an individual account and they have a joint account owned by both of them. What is the combined maximum SIPC coverage for all their accounts?

Answers:

A. $500,000

B. $1,000,000

C. $1,500,000

D. $750,000

Correct Answer: C. $1,500,000

Rationale: SIPC covers a maximum of $500,000 per “separate customer” at a broker-dealer or clearing firm including up to $250,000 in cash.Total coverage can be higher for multiple accounts if the accounts are considered to be held by separate customers. There are five categories of separate customers defined by SIPC. These categories include 1) individual accounts, 2) joint accounts, 3) accounts held by executors, administrators, and guardians/custodians/conservators (such as UGMA accounts), 4) accounts held by corporations, partnerships, or unincorporated associations, and 5) trust accounts. Thus, two individual accounts held by two different people, and one joint account would be considered three separate customers by the SIPC, and therefore subject to a maximum of $1,500,000 of coverage.

Congratulations! This month’s winner is Abe B.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.