Series 6

Study Alert: New memory retention study finds reading hard copy is better than reading online

A University of Oregon study shows that readers of the printed New York Times “remember significantly more news stories than online news readers.” Continue reading

A University of Oregon study shows that readers of the printed New York Times “remember significantly more news stories than online news readers.” Additionally, the study shows that print readers “remember significantly more topics than online newsreaders” and that print readers remembered “more main points of news stories.”

For anyone studying for an exam and thinking about what type of study material to use, this study from Arthur D. Santana, Randall Livingstone and Yoon Cho is something to be aware of. Click on the following link below for the full article:

http://img.slate.com/media/66/MediumMatters.pdf.

FINRA Alert: New rules for social media and personal device use for business purposes

Since FINRA first released rules regarding these issues back in 2010, many in the finance industry have raised questions and concerns over their abilities Continue reading

Since FINRA first released rules regarding these issues back in 2010, many in the finance industry have raised questions and concerns over their abilities to comply with these rules while keeping up with explosion of social media. Last week, FINRA responded to these concerns by releasing several guidelines clarifying rules surrounding use of social media websites and personal devices for business purposes. For example, some of the guidelines included the following:

If an individual posts a statement on Twitter on behalf of the firm, that will likely constitute an interactive statement and not require prior approval by a firm’s registered principal. However, if that statement is then posted on a blog, becoming a static statement (and therefore an advertisement), prior approval is necessary.
Whether a statement is interactive or static, recordkeeping rules still apply. This means that individuals and/or firms may not use social media sites or devices that automatically delete any posts.
Individuals may respond to third-party business-related posts on their personal social media site without violating FINRA guidelines. However, responses must conform to firms’ individual policies regarding these types of posts.
As long as firms are able to keep records and supervise activity, individuals may use their own personal devices (e.g. a smart phone or a tablet) to conduct business and access business applications. Something to keep in mind when using a personal device to conduct business: firms are allowed to supervise all communications made on personal devices, including personal communications, if the device is ever used for business purposes.

These are just a sampling of issues the recent FINRA Regulatory Notice addressed. Please click here to review the full notice.

Exam Alert: The New Series 99 Exam for Operations Professionals

The SEC recently adopted FINRA’s proposal to create a new Operations Professional Exam to be called the Series 99 exam. This exam will affect people Continue reading

The SEC recently adopted FINRA’s proposal to create a new Operations Professional Exam to be called the Series 99 exam. This exam will affect people involved in back office functions such as recordkeeping, trade confirmation and transaction settlement. Importantly, it will not be required for those who are already licensed under the Series 6 or 7 exams. This new rule goes into effect on October 17, 2011.

Exam Alert: SEC alters investment adviser registration and reporting requirements

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets Continue reading

The SEC has adopted changes to the registration and reporting requirements that private fund advisers face. Unless the private fund adviser meets an exemption, they must register with the SEC. Exemptions from registration are provided for venture capital fund advisers and private fund advisers with less than $150 million in assets under management in the U.S., though these advisers must still report certain business information. Foreign private advisers are exempt from the registration and reporting requirements.

Source: SEC Release 2011-133

Exam Alert: Mid-sized advisers must register with the states

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from Continue reading

The SEC has modified the standards for federal investment adviser registration. They have raised the bar for federal registration from $25 million in assets under management to $100 million. Advisers with between $25 million and $100 million in assets under management fall into the new category of “mid-sized advisers,” which must register with the states unless they qualify for federal registration based on other criteria. Mid-sized advisers have until June 28, 2012 to register at the state level.

Source: SEC Release 2011-133

Exam Alert: SEC approves exemption from investment adviser registration for “family offices”

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies Continue reading

On June 22, 2011, the SEC approved an exclusion for “family offices” from the regulations of the Investment Adviser Act of 1940. The new exemption applies to a company that only provides advice to “family clients,” is wholly owned by “family clients,” and does not hold itself out to the public as an investment adviser. “Family clients” include family members, key employees, and certain other clients.

Family offices were typically covered under the exemption for advisers with fewer than 15 clients, but that exemption will be removed under Dodd-Frank changes.

Relevant to the Series 7, 6, 65, 66, 63, 24 and Series 26 exams.

Source: SEC Release 2011-134

Exam Alert: FINRA pushes back implementation date for higher customer care standards

FINRA has changed the date on which its new know-your-customer and suitability rules will take effect. The new effective date is Continue reading

FINRA has changed the date on which its new know-your-customer and suitability rules (previously mentioned in this exam alert) will take effect. The new effective date is July 9, 2012. FINRA has also answered questions from firms about the new rules; the questions and answers may be found here.

http://www.finra.org/Industry/Regulation/Notices/2011/P123702

Exam Alert: SEC approves consolidated FINRA rules on books and records

The SEC has approved a new set of FINRA Rules governing books and records. These rules will be effective December 5, 2011. The rules state that records Continue reading

The SEC has approved a new set of FINRA Rules governing books and records. These rules will be effective December 5, 2011. The rules state that records for which no retention period is given under FINRA or Securities Exchange Act rules must be kept for six years. Firms must now record the name of the agent(s), if any, responsible for an account. Relevant to the Series 6, 7, 62, 24 and 26. Additional changes can be found here: http://www.finra.org/Industry/Regulation/Notices/2011/P123549.

Exam Alert: IRS requires broker-dealers and mutual funds to report cost basis of stocks

Effective January 1, 2011, the IRS requires that when broker-dealers and mutual funds purchase stocks, the cost basis of the stocks must be reported to Continue reading

Effective January 1, 2011, the IRS requires that when broker-dealers and mutual funds purchase stocks, the cost basis of the stocks must be reported to the IRS and to investors. In 2011, this reporting requirement only applies to most stocks, while in 2012 and beyond, the requirement will apply to all stocks. In 2011, the rule will not apply to mutual fund shares and shares purchased via dividend reinvestment plans. Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66 exams.

IRS news release: http://www.irs.gov/newsroom/article/0,,id=228907,00.html

Analysis by the Securities Technology Monitor: http://www.securitiestechnologymonitor.com/photo_gallery/1_36/27400-1.html

Exam Alert: FINRA further revises its Sanction Guidelines

Effective March 22, 2011, FINRA has revised its Sanction Guidelines to reflect recent developments in FINRA disciplinary cases. The specific revisions: Continue reading

Effective March 22, 2011, FINRA has revised its Sanction Guidelines to reflect recent developments in FINRA disciplinary cases. The specific revisions:

-clarify the standards required for an order of restitution (repayment)

-recognize that adjudicators may order that ill-gotten gains be paid to the injured party (as opposed to being taken by FINRA as a fine)

-acknowledge that whether a factor is aggravating or mitigating depends on the circumstances of the case

-direct adjudicators to consider sanctions already imposed by other regulators for the same misconduct to see if those sanctions were “sufficiently remedial”

http://www.finra.org/Industry/Regulation/Notices/2011/P123374