Series 6

Exam Alert: FINRA recommends heightened supervision for complex products

On January 17, 2012, FINRA highlighted the need for firms to have adequate supervisory and compliance programs in place in order for registered representatives to recommend complex products. FINRA identified several characteristics that may cause a product to be considered “complex,” such as embedded derivatives or contingencies. The notice states that agents should determine suitability, consider the customer’s financial sophistication, discuss the products with the customer, and consider alternative investments that could meet the customer’s goals. The firm should also review the performance of the products and train the agents about the products. Continue reading

Source: FINRA Regulatory Notice 12-03

This alert applies to the Series 6, Series 7, Series 24, Series 26, Series 55, Series 62, Series 79, Series 82, Series 99, Series 63, Series 65, and Series 66.

Exam Alert: Disclosures required by the Department of Labor do not need to be filed with FINRA

On October 20, 2010, the U.S. Department of Labor (DOL) adopted a rule that requires retirement plan administrators to show participants in participant-directed individual account plans (e.g., 401(k) plans) information on alternative investment options. On January 13, 2012, FINRA stated that communications that contain only the information required by the DOL rule do not need to be filed with FINRA. Note that communications that have additional information not required by the DOL rule must be filed with FINRA. Continue reading

Source: FINRA Regulatory Notice 12-02

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

Exam Alert: SEC modifies accredited investor standard based on Dodd-Frank

The SEC has changed its net worth standards for accredited investors to conform to provisions of the Dodd-Frank Act. The change stipulates that the value of an investor’s primary residence may not be used when calculating net worth to determine whether the person is an accredited investor on the basis of having a net worth of over $1 million. The change will be effective 60 days after publication in the Federal Register. Continue reading

An accredited investor is allowed to participate in certain unregistered limited private offerings. This SEC website shows the standards that determine who qualifies as an accredited investor.

Source: SEC Release 2011-274

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

Exam Alert: FINRA changes guidelines for books and records rules

On December 5, 2011, new FINRA rules regarding books and records took effect. These changes affect recordkeeping time limits, customer account information, customer complaints, order information and arbitration agreements. Continue reading

Recordkeeping – the default time limit for keeping records is six years. This means that if FINRA requires a firm to keep a record but does not specify how long the record must be kept, it must be kept for six years. If a change is made to an account and documentation is required to make that change, the documentation must be preserved for six years after the change. If the account is closed, the firm must maintain the most current information about the account for six years after the account closes.

Account information – When opening an account, the signature of the registered representative opening the account is no longer needed. Instead, FINRA requires the signatures of all persons who are responsible for the account. Additionally, discretionary accounts no longer require the age of the person with discretionary authorization. Instead, an acknowledgment that said person is over 18-years-old, without a specific age, is sufficient.

Customer complaints – Firms must now keep records of customer complaints for four years, not three.

Order information – Previously, firms were allowed to accept block orders from an investment adviser for customer accounts if the firm received the specific account names and designations by the end of the business day. Now, firms are allowed to accept orders from an investment adviser for customer accounts if the order involves more than one customer and the firm receives the specific account names and designations by noon of the next business day.

Pre-dispute arbitration agreements – The disclosure language for pre-dispute arbitration agreements has been updated to include that arbitrators are required to explain their decision in eligible cases if all parties involved file a joint request 20 days before the first scheduled hearing date.

To read Regulatory Notice 11-19 where FINRA outlines these changes in more detail, please click here. Additionally, we have included a summary of these changes on our Exam Updates page, where we include updates to the exams on a regular basis. You may want to brush up on these rules if you’re taking the Series 7, 6, 24, 26, 62, 99 and 79!

Exam Alert: FINRA provides guidance on TIPS fund advertising

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding Treasury Inflation-Protected Securities (TIPS) funds. Specifically, if a TIPS fund’s current yield is adjusted monthly based on changes in the inflation rate, communication must explain that these changes can cause the yield to vary greatly from month to month. If an advertisement includes an unusually high current yield, “the material must disclose that the yield is attributable to the rise in the inflation rate, which might not be repeated.” Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: FINRA provides guidance on the use of FINRA in firm trademarks

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding indicating FINRA membership. Specifically, FINRA stated that firms and associated persons may not use FINRA’s trademark in the firm’s or individual’s trademark. The firm’s or individual’s trademark also must not include references to FINRA membership. Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: FINRA provides guidance on ETF and DPP advertising

On October 27, 2011, FINRA provided guidance on its rules that govern communications with the public regarding exchange-traded products. Specifically, FINRA reminded firms that research reports on exchange-traded funds (ETFs) must filed with FINRA within ten days of first use. FINRA also reminded firms that firms must file sales literature for direct participation programs (DPPs). Continue reading

Source: FINRA Regulatory Notice 11-49

This alert is relevant to the Series 6, 7, 24, 26, 62, and 82.

Exam Alert: SEC gives guidance on cyber attack threat disclosure

On October 13, 2011, the Securities and Exchange Commission issued new guidelines that clarify the application of existing disclosure rules. Specifically, the SEC has identified cyber attack incidents, along with the risk of cyber attacks, as material information that must be disclosed to investors. Continue reading

Source: CF Disclosure Guidance: Topic No. 2

Further reading: “SEC tells companies to disclose cyber attacks”

This alert applies to the Series 24, 26, 55, 6, 62, 63, 65, 66, 79, 82, 99, and 7.

Android Apps have arrived at Solomon Exam Prep

If you’re looking to study for a FINRA or NASAA licensing exam on the go and use an Android phone, you’re in luck. Solomon Exam Prep has arrived Continue reading

If you’re looking to study for a FINRA or NASAA licensing exam on the go and use an Android phone, you’re in luck. Solomon Exam Prep has arrived in the Android Market! Solomon Exam Prep mobile apps offer hundreds of practice exam questions designed to help you study for the Series 7, Series 6, Series 63, Series 65, Series 66, Series 62 and Series 79 exams at your convenience.

All Solomon Exam Prep apps retail for $9.99 aside from the Series 62 app, which is $18.99. If you’re studying for the Series 3, 4, 7 or 24 exams, you can also check out our Options app for those tricky options questions. Curious about whether our apps are right for you? Lite versions are available to give you a free preview.

Whether you’re looking for a supplement to your Solomon Exam Prep classes and workbooks or you just want to do some quick review on your own, our Android apps will allow you to study for the following exams anywhere you have your phone:

FINRA Series 7 General Securities Representative exam
FINRA Series 6 Investment Company Products/Variable Contracts Limited Representative exam
FINRA Series 62 Corporate Securities Limited Representative exam
NASAA Series 63 Uniform Securities Agent State Law exam
NASAA Series 65 Uniform Investment Adviser Law exam
NASAA Series 66 Uniform Combined State Law exam
FINRA Series 79 Limited Representative Investment Banking exam (lite only)
An Options-only app great for specialized study for the Series 3, 4, 7 and 24 exams

Download Our Apps at: https://play.google.com/store/apps/developer?id=Solomon+Exam+Prep

For more information about Solomon Exam Prep, go to www.SolomonExamPrep.Com.

Exam Alert: The Series 99 Outline is Up!

FINRA recently posted the outline for the new Series 99 Operations Professionals Exam. The Madoff-inspired test is meant to ensure that Continue reading

FINRA recently posted the outline for the new Series 99 Operations Professionals Exam. The Madoff-inspired test is meant to ensure that operations professionals understand the fundamentals of the operations and regulations of a broker-dealer’s business. Click here to see the official outline.

What will be tested on the exam?

This exam will be three hours and consist of 110 questions (10 unscored) focusing on the following three topics:

Basic knowledge associated with the securities industry – basic questions about SROs, types of markets, types and characteristics of securities, broker-dealers versus investment advisers, suitability, and types of broker-dealers

Basic knowledge associated with broker-dealer operations – basic questions about types of accounts, maintenance of accounts, custody, anti-money laundering, margin, short sales, settlement, tax-reporting, and record-keeping

Professional conduct and ethical considerations – questions on FINRA conduct rules involving privacy, complaints, information barriers, written supervisory procedures, and registration

The test will be more heavily weighted toward the second category with 48 questions on broker-dealer operations. Securities industry knowledge is the second most important topic with 32 questions and the remaining 20 questions will be comprised of conduct and ethics. FINRA has yet to release the score that will be required to pass.

How difficult is the exam?

The exam outline contains 30 practice questions that represent the level of difficulty of the exam questions. Based on these sample questions the exam appears to be comparable to the Series 6 exam.

Who will have to take the exam?

Day One Professionals – Individuals who currently work as operations supervisors or operations managers or individuals who currently have the authority to materially commit capital in various back office functions. These individuals must be identified by December 16, 2011 and must register within 60 days of being identified. Those registered individuals will then have until October 17, 2012 to pass the Series 99 or a comparable exam such as the Series 6 or Series 7.

Non-Day One Professionals – Individuals who are not currently working in back-office activities, but plan to in the future. These individuals must pass the Series 99 or a comparable exam before engaging in back-office activities. They are not subject to the 12-month transition period.

Individuals who hold the following Series Exams will be exempt from taking the Operations Professionals Exam: Series 4, 6, 7, 9/10, 14, 16, 17, 23, 24, 26, 27, 28, 37, 38, 51, and 52.