Series 62

Exam Alert: FINRA revises its Sanction Guidelines

Effective February 9, 2011, FINRA has modified its Sanction Guidelines. These changes incorporate legal precedent from federal courts and the SEC. Continue reading

Effective February 9, 2011, FINRA has modified its Sanction Guidelines. These changes incorporate legal precedent from federal courts and the SEC. The degree of penalties for certain offenses have changed, such as recommending higher fines and firm suspension for “egregious” sales of unregistered securities, particularly in connection with market manipulation. The guidelines for FINRA Rule 8210 now have three categories of violations. Additional details may be found here: http://www.finra.org/Industry/Regulation/Notices/2011/P122910.

Exam Alert: FINRA to adopt consolidated rule on customer confirmations

On June 17, 2011, FINRA Rule 2232, Customer Confirmations, will become effective. This rule consolidates and streamlines the current Continue reading

On June 17, 2011, FINRA Rule 2232, Customer Confirmations, will become effective. This rule consolidates and streamlines the current customer confirmation rules found in NASD and NYSE rules. The rule requires that at or before the completion of a transaction, the customer is given a written confirmation that complies with the requirements of SEA Rule 10b-10. The confirmation must include the settlement date and whether an equity security is callable. Relevant to the Series 7, Series 24, Series 26 and Series 62 exams.

http://www.finra.org/Industry/Regulation/Notices/2010/P122640

Exam Alert: SEC to nationalize exam program

According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners. The WSJ states that the SEC expects Continue reading

According to the Wall Street Journal, the SEC is putting the finishing touches on a new uniform manual for its examiners. The WSJ states that the SEC expects that the new manual will nationalize the agency’s examination program, allowing for uniform processes and procedures across all regional offices. The SEC intends to distribute the manual to examiners in 30 to 60 days and to the public in 30 to 90 days (as of 2/8/11), according to the WSJ.

http://online.wsj.com/article/SB10001424052748704364004576132231587877342.html

Exam Alert: NYSE Euronext and Deutsche Boerse announce merger

On February 15, 2011, Deutsche Boerse AG and NYSE Euronext announced a merger between the two companies. The combined company will serve as “the world’s Continue reading

On February 15, 2011, Deutsche Boerse AG and NYSE Euronext announced a merger between the two companies. The combined company will serve as “the world’s largest trading powerhouse,” according to the Securities Technology Monitor. The name of the combined company has not been announced. The deal has been structured such that Deutsche Boerse shareholders will own 60% of the company, while NYSE Euronext shareholders will own 40%.

http://www.nyse.com/press/1297768048707.html

Exam Alert: New SEC rules on shareholder approval of executive compensation

Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require Continue reading

Effective January 25, 2011, the SEC has adopted new rules concerning shareholder approval of executive compensation. The new rules require “say-on-pay” votes to take place at least once every three years. The frequency with which these say-on-pay votes occur must be voted on at least once every six years, and the results of the frequency vote are reported on Form 8-K. Relevant to Series 6, Series 7, Series 62, Series 66, Series 24 and Series 79 exams.

http://www.sec.gov/news/press/2011/2011-25.htm

Exam Alert: FINRA to track trades in all listed US stocks

Effective July 11, 2011, FINRA will start a three-phase plan to track trades in all listed US stocks. Trades will be tracked using Continue reading

Effective July 11, 2011, FINRA will start a three-phase plan to track trades in all listed US stocks. Trades will be tracked using the Order Audit Trail System (OATS), which is currently used in recording and reporting trades on NASDAQ and in OTC equity securities. Relevant to Series 7, Series 24 and Series 62 exams.

http://www.finra.org/Industry/Regulation/Notices/2011/P122786

Exam Alert: FINRA members prohibited from keeping assets at certain non-member institutions

On February 1, 2011, FINRA Rule 4160, Verification of Assets, was put into effect. This rule states that if the following conditions are true: Continue reading

On February 1, 2011, FINRA Rule 4160, Verification of Assets, was put into effect. This rule states that if the following conditions are true:

1. A member keeps assets or records at a non-member institution,

2. FINRA has asked the non-member institution to verify what assets or records are being kept for the member, and

3. The non-member fails to promptly provide verification,

Then FINRA will notify the member that they are prohibited from keeping assets and records with the non-member.

http://www.finra.org/Industry/Regulation/Notices/2010/P122526

Exam Alert: FINRA to hold broker-dealers to a higher standard of customer care

Effective October 7, 2011, broker-dealers must adhere to stricter know-your-customer and suitability standards than before. The new rules require Continue reading

Effective October 7, 2011, broker-dealers must adhere to stricter know-your-customer and suitability standards than before. The new rules require that consideration be given to a customer’s age, investment experience, time horizon, liquidity needs and risk tolerance, in addition to factors that were already required to be considered (other holdings, financial situation and needs, tax status and investment objectives). These new requirements are similar to the fiduciary standard used by investment advisers. Relevant to the Series 7, Series 66, Series 24, Series 62 and Series 79 exam.

http://www.finra.org/Industry/Regulation/Notices/2011/P122779

Exam Alert: Flipping may only be discouraged through penalty bids

“Flipping” is when a customer sells a new issue into the secondary market at a profit shortly after the IPO. Underwriting managers may discourage this by Continue reading

“Flipping” is when a customer sells a new issue into the secondary market at a profit shortly after the IPO. Underwriting managers may discourage this by imposing penalty bids on brokers whose customers flip securities. Some firms have sought to independently recoup commissions paid to such brokers. Effective May 27, 2011, FINRA requires that flipping only be punished through penalty bids applied to the entire syndicate by the underwriting manager. Relevant to the Series 24, Series 62 and the Series 79 exams.

http://www.finra.org/Industry/Regulation/Notices/2010/P122491

Exam Alert: 30-second trade reporting requirement is in effect

Effective November 10, 2010, FINRA’s prior 90-second trade reporting requirement has been replaced with a Continue reading

Effective November 10, 2010, FINRA’s prior 90-second trade reporting requirement has been replaced with a 30-second trade reporting requirement. This applies to OTC trades made in equity securities during the hours that FINRA trade reporting facilities are open (generally 8 AM to 8 PM Eastern Time). This change also affects trade cancellations that were subject to 90-second reporting. Note that bonds are typically have a 15-minute trade reporting requirement.
Relevant to the Series 7, Series 62 and the Series 24 General Securities Principal exam.

http://www.finra.org/Industry/Regulation/Notices/2010/P121342