Series 6

Exam Alert: SEC Issues Bulletin Regarding Diminished Financial Capacity

On June 1, 2015, the SEC issued an investor bulletin about “diminished financial capacity”, which refers to when an individual becomes unable to manage their finances. They recommend a number of steps for individuals to take to prepare for such a condition. Continue reading

On June 1, 2015, the SEC issued an investor bulletin about “diminished financial capacity”, which refers to when an individual becomes unable to manage their finances. They recommend a number of steps for individuals to take to prepare for such a condition. These steps include:

Organize important documents and keep them safe and accessible
Give your financial professionals emergency contacts
Keep your information and contacts updated
Report financial fraud and abuse

Some other options to consider include:

Authorizing a durable power of attorney
Getting someone you trust involved

Source: Investor Bulletin and Consumer Advisory: Planning for Diminished Capacity and Illness

This alert applies to the Series 6, Series 7, Series 52, Series 65, and Series 66.

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

Effective 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 – 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.***

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 – 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.***

Question (Relevant to the Series 7, Series 24, Series 26, Series 27, Series 51, Series 52, Series 53, Series 62, Series 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.

Exam Alert: FINRA Allows Arbitrators to Make Mid-case Referrals in Cases of Serious Threats

Effective October 27, 2014, FINRA has revised its arbitration rules regarding when arbitrators may refer matters to FINRA for disciplinary investigation. Continue reading

Exam Alert Effective October 27, 2014, FINRA has revised its arbitration rules regarding when arbitrators may refer matters to FINRA for disciplinary investigation. Arbitrators may now make such referrals during an arbitration if they become aware of an issue that they believe poses a serious threat that will harm investors unless immediate action is taken. Previously, arbitrators could not make referrals until the conclusion of a case.

Source: Regulatory Notice 14-42: SEC Approves Amendments to the Arbitration Codes to Expand Arbitrators’ Authority to Make Referrals During an Arbitration Proceeding

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

Study Question of the Month – November

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 62, 79, and 82. –ANSWER POSTED– Continue reading

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

Question (Relevant to the Series 6, Series 7, Series 62, Series 79 and Series 82):

As the price of the underlying stock of a convertible debenture goes up:

I. The parity value of the bond increases.
II. The current yield of the bond goes up.
III. The parity value of the bond decreases.
IV. The current yield of the bond goes down.

Answers:

A. I and III

B. III and IV

C. II and III

D. I and IV

Correct Answer: D. I and IV

Rationale: With a fixed conversion schedule, the parity value of the bond increases along with the price of the underlying stock. Since the nominal yield of the bond is fixed, the current yield, expressed as a percent of the bond’s price, goes down.

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

Study Question of the Month – October

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 62, 65, 66, and 82. –ANSWER POSTED– Continue reading

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

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66 and Series 82):

The decimal equivalent of a basis point is:

Answers:

A. 0.01

B. 0.001

C. 0.0001

D. 0.00125

Correct Answer: C. 0.0001

Rationale: A basis point is one-hundredth of one percent, or .0001.

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

Study Question of the Month – September

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 62, 65, and 66. –ANSWER POSTED– Continue reading

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

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66):

Your client owns stock mutual funds in an account with automatic reinvestment of dividends and capital gains. What happens to the value of his account on ex-dividend dates?

Answers:

A. The value of the account shrinks by the amount of the distribution

B. The value of the account grows by the amount of the distribution, and it is a taxable event for him

C. The value of the account remains unchanged, and it is a taxable event for him

D. The value of the account remains unchanged, and it is not a taxable event for him

Correct Answer: C. The value of the account remains unchanged, and it is a taxable event for him

Rationale: Upon distribution and reinvestment of dividends or capital gains, the client ends up with more shares, and each share is worth slightly less. The value of the account is unchanged. The mutual fund company reports these distributions annually to the IRS, and they are treated as taxable income.

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

Study Question of the Week: August 27, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 24, 26, 55, 62, 79, and 82. –ANSWER POSTED– Continue reading

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

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 24, Series 26, Series 55, Series 62, Series 79, and Series 82):

What is the maximum civil penalty that can be imposed on a firm when an employee engages in insider trading?

Answers:

A. The greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

B. The lesser of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

C. Three times the amount of the profit gained or loss avoided as a result of the violation

D. $0

Correct Answer: A. The greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation

Rationale: The maximum civil penalty that can be imposed on a firm when an employee engages in insider trading is the greater of $1,000,000, or three times the amount of the profit gained or loss avoided as a result of the violation.

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

Portland, OR – Live, Series 6 & 63 Class this September

Looking for a Live, Series 6 and/or Series 63 Class? Look no further!

Solomon Exam Prep will be holding a “crash course” for the Series 6 & Series 63 this September. Taught by Professor Karen Solomon, this class will cover the major topics that will be encountered on these exams. Enroll now and reserve your spot in class. The Live-Class Package for the Series 6 & 63 also includes access to our Digital Exam Study Guide and Online Exam Simulator. Class dates and times are:

Series 6

Tuesday, September 9 – 10:00 AM – 3:00 PM

Wednesday, September 10 – 10:00 AM – 3:00 PM

Series 63

Thursday, September 11 – 10:00 AM – 3:00 PM

Classes will be held across the street from Solomon Exam Prep at the George Fox Portland Center:12753 SW 68th Ave, Portland, OR 97223.