It’s Settled: SEC Shortens Regular-Way to T+2

If you’ve ever traded securities or studied for a securities licensing exam, then you’ve probably come across T+3. No, it’s not an herbal supplement or an embarrassing medical procedure. Continue reading

If you’ve ever traded securities or studied for a securities licensing exam, then you’ve probably come across T+3. No, it’s not an herbal supplement or an embarrassing medical procedure. T+3 refers to the regular-way settlement period for most securities transactions. This means that securities must be paid for and delivered by three business days from the trade date. T+3 also means you don’t become the owner of record of a security until three business days after you purchase it.

Well, add T+3 to the list of things that have gone out of style. Effective May 30, 2017, the SEC will shorten the regular-way settlement period to two business days. And so will begin the age of T+2, which is intended to “increase efficiency and reduce risk for market participants,” according to SEC Acting Chairman Michael Pinowar.

This shorter settlement period for the trading of secondary market securities has been discussed by the SEC for years. The change is expected to lower margin requirements for clearing agency members, reduce liquidity stress when markets are volatile, and harmonize settlement with European markets, which moved to T+2 in 2014.

This settlement period will not apply to every securities transaction, though. T+2, like T+3 before it, will apply to:

  • Stocks
  • Bonds
  • Municipal securities
  • Exchange-traded funds
  • Mutual funds traded through a brokerage firm
  • Unit investment trusts
  • Limited partnerships that trade on an exchange

The securities industry moves fast. Don’t get left behind! Visit www.solomonexamprep.com or call us at 503-601-0212 for more information about the latest securities exam preparation and education.

Solomon has helped thousands pass their Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 50, Series 51, Series 52, Series 53, Series 62, Series 63, Series 65, Series 66, Series 79, Series 82, and Series 99.

Announcing the Release of the Solomon Exam Prep Android Mobile App!

With the release of the Solomon Exam Prep app, you have full mobile access to your Solomon study materials with the click of a button. Continue reading

Do you need to take a securities licensing exam?

Do you wish you had more time to study?

With the release of the Solomon Exam Prep Android app, you have full mobile access to your Solomon study materials at the click of a button.

  • Easier and quicker—Just click the Solomon Exam Prep icon on your phone to be taken directly to your account.
  • Access all your materials—The app provides full site functionality and access to your study guide, exam simulator, audiobook, and video lecture.
  • No typing on tiny keyboards—Don’t worry about typing in a web address! Our app will take you right where you need to be.

Move into the future of mobile securities exam prep with the Solomon Exam Prep app!

To download the app, please visit: goo.gl/IkNceh

Solomon Exam Prep has helped thousands of financial professionals pass their FINRA, NASAA, and MSRB licensing exams, including the Series 6, Series 7, Series 24, Series 26, Series 27, Series 28, Series 50, Series 51, Series 52, Series 53, Series 62, Series 63, Series 65, Series 66, Series 79, Series 82, and the Series 99.

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Study Question of the Month – September 2016

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

Congratulations to Nick M., this month’s Study Question of the Month winner! (Nick M. is no relation to last month’s winner.)

See the answer below!

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.***

studyQuestion

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99):

A single 41-year old who earns $200,000 per year wants to convert his traditional IRA to a Roth IRA. Which of the following is the best answer?

A. He may not convert because his income exceeds the limit permitted for such conversions.

B. He may convert up to $5,500 per year.

C. He may not convert because he younger than 50.

D. He may convert without restrictions.

Answer: D. If your modified adjusted gross income is greater than $133,000 (single filer) or $194,000 (married filing jointly), then you may not contribute to a Roth IRA. However, there are no income or age restrictions on converting funds from a traditional IRA to a Roth IRA. A conversion from a traditional IRA to a Roth IRA is not counted as a “rollover” under the one per year rollover rule.

Market Circuit Breakers — A Post-Brexit Reminder

With post-Brexit vote market turmoil, it’s good to remember that the Securities Exchange Commission requires trading halts across US markets in the event that stocks fall more than specified percentages in one day. Continue reading

stop-634941_1280With post-Brexit vote market turmoil, it’s good to remember that the Securities Exchange Commission requires trading halts across US markets in the event that stocks fall more than specified percentages in one day. This information is also important to know if you are studying for securities licensing exam such as the Series 7, Series 24, Series 26, Series 62, Series 79, and the Series 65.

A market-wide trading halt can be triggered at three thresholds. These thresholds are triggered by steep declines in the S&P 500 Index. They are calculated based on the prior day’s closing price of the Index.

• Level 1 Halt—a 7% drop in the S&P 500 prior to 3:25 p.m. ET will result in a 15-minute cross-market trading halt. There will be no halt if the drop occurs at or after 3:25 p.m. ET.

• Level 2 Halt—a 13% drop in the S&P 500 prior to 3:25 p.m. ET will result in a 15-minute cross-market trading halt. There will be no halt if the drop occurs at or after 3:25 p.m. ET.

• Level 3 Halt—a 20% drop in the S&P 500 at any time during the day will result in a cross-market trading halt for the remainder of the day.

These halts apply to securities and options trading on all the exchanges as well as the OTC market. Levels 1 and 2 trading halts are permitted just once a day.

Solomon Exam Prep has helped thousands of financial professionals pass the Series 6, 7, 63, 65, 66, 24, 26, 27, 50, 51, 52, 53, 62, 79, 82 and 99 exams.

For more information call 503 601 0212 or visit http://www.solomonexamprep.com/

Exam Alert: FINRA Provides Guidance on Communications

On May 22, 2015, FINRA issued guidance concerning communications with the public. Here are some notable points from the guidance… Continue reading

Exam Alert

On May 22, 2015, FINRA issued guidance concerning communications with the public. Here are some notable points from the guidance.

  • Non-promotional communications (i.e. communications that do not promote or recommend a specific product or service) do not need to be filed with FINRA
  • Electronic forum posts are considered retail communication, but are specifically excluded from filing requirements
  • Template updates do not need to be filed with FINRA if all that changed was statistical information
  • Various non-material changes to previously filed communications do not require refiling the communication
  • A reprinted article does not need to be filed with FINRA
  • Promotional items that only have the name of a mutual fund are not considered “advertisements” under Rule 482
  • If a firm includes mutual fund performance in a retail communication or correspondence, they must also include the fund’s expense ratio
  • Firm must file retail communications regarding registered business development companies
  • A Series 26 registration does not permit a principal to approve retail communications concerning a business development company. The principal must have a Series 24, Series 9/10, or Series 39 registration instead.

Sources:
Regulatory Notice 15-17: Guidance on Rules Governing Communications With the Public
FINRA Rule 2210 Questions and Answers

This alert applies to the Series 6, Series 7, Series 9/10, Series 24, Series 26, Series 39, Series 62, Series 82, and Series 99.

Study Question of the Month – June

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 24, 26, 27, 28, 62, and 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.***

Study Question

Question (Relevant to the Series 24Series 26Series 27, Series 28, Series 62, and Series 99):

Which of the following is true regarding lost and stolen security reporting requirements?

I. All reports of securities that have been lost for one business day should be reported to the Commission

II. All reports of lost securities in which there is a substantial belief that theft was involved should be reported to the Commission

III. All reports of lost or stolen securities should be reported promptly to the FBI

IV. All reports of lost securities in which there is a substantial belief that theft was involved should be reported to the FBI

Answers:

A. I and III

B. II and IV

C. I and IV

D. II and III

Correct Answer: B. II and IV

Rationale: All reports in which there is substantial belief that theft was involved should be reported to the Commission within one business day of such a discovery. In addition, when there is believed to be criminal activity involved, it should be reported to the Federal Bureau of Investigation. Securities that have been lost for two business days should be reported to the Commission when criminal activity is not suspected.

Congratulations Roseann L., this month’s Study Question of the Month winner!

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

Study Question of the Month – March

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, 24, 27, 62, 79, 82, and 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.***

Study Question

Question (Relevant to the Series 7, Series 24, Series 27, Series 62, Series 79, Series 82, and Series 99):

Jenny is an employee of a broker-dealer. She is a receptionist at the firm and is not a registered representative. She would like to purchase shares in an IPO that she has recently heard about at her office. Which of the following BEST describes her participation?

Answers:

A. Jenny may purchase shares of the IPO on the same basis as other customers.

B. Jenny is prohibited from purchasing shares of the IPO, but her spouse who she supports may purchase shares on the same basis as other customers.

C. Jenny may purchase shares of the IPO as long as the purchase quantity doesn’t exceed 200 shares.

D. Jenny is prohibited from purchasing shares of the IPO.

Correct Answer: D. Jenny is prohibited from purchasing shares of the IPO.

Rationale: FINRA Rule 5130 – Restrictions on the Purchase and Sale of Initial Equity Public Offerings – prohibits a member firm (broker/dealer) from selling shares of an IPO to an account in which a “restricted person“ has a beneficial interest, subject to certain limited exceptions. All employees of a broker-dealer are considered “restricted persons“ under the rule.

Congratulations! This month’s winner is Alexandra K.

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.***

 Study Question

Question (Relevant to the Series 7Series 24, Series 26, Series 27, Series 51, Series 52, Series 53Series 62Series 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 Adds Additional FOCUS Report Supplement

Effective December 31, 2014, certain firms that are required to file FOCUS reports will be required to file an additional form called the Supplemental Inventory Schedule. Continue reading

Exam AlertEffective December 31, 2014, certain firms that are required to file FOCUS reports will be required to file an additional form called the Supplemental Inventory Schedule. On this form, firms report their gross long and short inventory positions in specified categories of securities and commodities. The requirement does not apply to firms that have (1) a minimum dollar net capital or liquid capital requirement of less than $100,000 or (2) inventory positions consisting only of money market mutual funds.

Source: FINRA Regulatory Notice 14-43: SEC Approves Supplemental Inventory Schedule

This alert applies to the Series 26 and Series 99.