Series 62

Exam Alert: Underwriters must report indications of interest and final allocations to issuers

Effective May 27, 2011, during a new issue, the underwriting manager must report indications of interest and aggregate demand for the security to Continue reading

Effective May 27, 2011, during a new issue, the underwriting manager must report indications of interest and aggregate demand for the security to the issuer. After the settlement date of the new issue, a report of the final allocation of shares to institutional investors must be provided to the issuer, along with the aggregate sales to retail investors. This change was made to increase transparency in the book-building process. Relevant to FINRA Series 7, Series 24, Series 62 and the Series 79 Investment Banking Exam.

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

Exam Alert: FINRA prohibits “spinning”

“Spinning” is when a broker allocates IPO shares of a hot issue to favored customers, which the customers can then sell at a profit on the Continue reading

“Spinning” is when a broker allocates IPO shares of a hot issue to favored customers, which the customers can then sell at a profit on the secondary market. Effective May 27, 2011, FINRA has prohibited spinning. If it looks like there is a relationship between a customer and the broker-dealer, the broker-dealer cannot sell shares of new issues to that customer. Note that certain allocations are exempt from this rule.

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

Exam Alert: NASAA develops list of “Best Practices”

A 2010 NASAA review of broker-dealers found that the three most common compliance problem areas were failure to follow supervisory policy, Continue reading

A 2010 NASAA review of broker-dealers found that the three most common compliance problem areas were failure to follow supervisory policy, advertising and sales literature, and suitability issues. NASAA developed a list of ten best practices and released them in October of 2010. The recommendations focus on suitability, exception reports, supervisory procedures, and communications. Relevant to Series 6, Series 7, Series 63, Series 65, Series 66, Series 24, Series 26, Series 62 and Series 79. The list can be found here: http://www.nasaa.org/NASAA_Newsroom/Current_NASAA_Headlines/13382.cfm.

Exam Alert: FINRA prohibits quid pro quo allocations

Effective May 27, 2011, FINRA member firms and associated persons may not offer or threaten to withhold shares of an allocation of a new issue in order to Continue reading

Effective May 27, 2011, FINRA member firms and associated persons may not offer or threaten to withhold shares of an allocation of a new issue in order to receive excessive compensation. This prohibited behavior is known as a quid pro quo allocation, where the member or associated person gives preferential allocation in exchange for a kick-back. Relevant to Series 24, Series 62 and Series 79.

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

Exam Alert: “Buy-in” notices must be rejected in writing by 6 PM, EST

Effective December 15, if a seller does not accept a “buy-in” notice, it must send a signed, written rejection to the buyer no later than 6:00 PM Eastern Continue reading

Effective December 15, if a seller does not accept a “buy-in” notice, the seller must send a signed, written rejection to the buyer no later than 6:00 PM, Eastern Standard Time. If no rejection is sent, the notice is accepted. A “buy-in” notice is sent to a seller when the seller fails to deliver securities. It allows the buyer to repurchase the securities, with the seller making up any price difference. Relevant to: Series 7, Series 24, Series 62.

http://www.finra.org/Industry/Regulation/Notices/2010/P122271

Exam Alert: Free writing prospectuses must comply with FINRA communication rules

A free writing prospectus is a written offer to sell (or solicitation of an offer to buy). Effective October 21, 2010, a free writing prospectus Continue reading

A free writing prospectus is a written offer to sell (or solicitation of an offer to buy). Effective October 21, 2010, a free writing prospectus distributed by a broker-dealer to the public must be approved by a registered principal and must comply with FINRA content standards and filing requirements for advertisements and sales literature. This is a change from previous interpretive guidance that excluded free writing prospectuses from these requirements. Relevant to: Series 24, Series 62, Series 79.

http://www.finra.org/Industry/Regulation/Notices/2010/P122311

Exam Alert: Outside business activities require prior notice

Effective December 15, 2010, registered persons must provide prior written notice to their member firms before engaging in Continue reading

Effective December 15, 2010, registered persons must provide prior written notice to their member firms before engaging in outside business activities. The previous rule only required registered persons to provide prompt written notice. The new rule also requires that firms review the proposed activities. For registered persons who were engaged in outside business activities as of December 15, 2010, firms have until June 15, 2011 to review such activities. Relevant to: Series 7, Series 6, Series 24, Series 26, Series 79, Series 62.

http://www.finra.org/Industry/Regulation/Notices/2010/P122271

Exam Alert: FINRA investigations require encrypted information

As of December 29, 2010, when providing information for a FINRA investigation via a portable media device, the information must be encrypted. This includes Continue reading

As of December 29, 2010, when providing information for a FINRA investigation via a portable media device, the information must be encrypted. This includes information on flash drives, CDs, laptop computers, and other digital storage devices. The encryption must meet industry standards for strong encryption and the encryption key must be provided to FINRA staff in a communication (email, fax, or letter) separate from the information. Relevant to: Series 6, Series 24, Series 26, Series 79, Series 62.

Solomon Exam Prep Publishes Series 62 Exam Simulator

Continuing its strong tradition of experience-based learning products, Solomon Exam Prep has published an innovative exam simulator for the Series 62. Continue reading

Continuing its strong tradition of experience-based learning products, Solomon Exam Prep has published an innovative exam simulator for the FINRA Corporate Securities Limited Representative Exam. With 900+ questions and detailed explanatory rationales, the Solomon Exam Prep Series 62 exam simulator provides full practice exams, with feedback, as well as topical quizzes.

If you trade corporate securities only, including corporate stocks and bonds, rights, warrants, REITs, collateralized mortgage obligations (CMOs) and exchange traded funds (ETFs) and you have to take the the FINRA Series 62 exam, “there is no better way to pass the Series 62 exam than by taking practice exams on an exam simulator” according to Jeremy Solomon, President.