Series 99

Exam Alert: SEC approves consolidated FINRA Best Execution rule

The SEC has approved changes to FINRA’s Best Execution rule that will take effect on May 31, 2012. Four new pieces of supplementary material were added to the rule that address the following topics: securities with limited quotation or pricing information, orders for securities with no U.S. market, customer instructions regarding the routing of orders, and regular and rigorous reviews of execution quality. The new rule is otherwise generally similar to the old rule. Continue reading

Here is a breakdown of the new supplementary material:

1. Supplementary Material .06: Securities with Limited Quotation or Pricing Information

This material replaces the old “Three Quote Rule.” The new material does not specify a minimum number of quotes that must be obtained – rather, it emphasizes that members must be diligent in complying with best execution practices when there are customer orders for securities with limited quotation or pricing information. The material requires that the member have written policies in place to ensure that they meet their best execution requirements.

2. Supplementary Material .07: Orders for Foreign Securities with No U.S. Market

This material states that in order to determine if a firm used reasonable diligence in executing orders in a given market, the firm must analyze the “facts and circumstances” of the situation. The material requires that if a firm trades in a security that does not trade in the U.S., the firm must have written policies in place to ensure best execution of customer orders. The policies must be reviewed regularly.

3. Supplementary Material .08: Customer Instructions Regarding the Routing of Orders

This material specifies that when a customer requests the firm to route their order to a specific market, the firm is not required to make a best execution determination beyond the customer’s instructions. The firm must still process the customer’s order promptly, however.

4. Supplementary Material .09: Regular and Rigorous Review of Execution Quality

This material codifies existing requirements for reviewing the firm’s execution quality. These requirements were previously established through SEC releases and FINRA notices.

Source: FINRA Regulatory Notice 12-13

This alert applies to the Series 62, Series 55, Series 24, and Series 99.

Exam Alert: FINRA requires firms to file SSOI supplement to FOCUS Reports

FINRA Rule 4524, which became effective on February 28, 2012, allows FINRA to require member firms to file supplemental reports to their Financial and Operational Combined Uniform Single (FOCUS) Report. FINRA will require firms to file the Supplemental Statement of Income (SSOI), which provides a more detailed breakdown of certain financials than the Statement of Income page of the FOCUS Report. Firms that derive more than 10% of their revenues from unregistered offerings will be required to complete an Operational Page that requires additional information about each unregistered offering. Firms will have to file the SSOI within 20 business days of the end of each calendar quarter, and the due date for the first required SSOI is October 26, 2012.

Source: FINRA Regulatory Notice 12-11

This alert applies to the Series 24, the Series 26 and the Series 99.

Exam Alert: SEC requests that broker-dealers provide FINRA with SAR information

Member firms must make suspicious activity reports (SARs) and supporting documentation available to FINRA, as well as any information that would reveal the existence of an SAR or any decision not to file an SAR. Continue reading

On January 26, 2012, the SEC issued a letter that authorized FINRA to request suspicious activity reports (SARs) and supporting documentation from member firms when FINRA conducts examinations, investigations, or risk assessment for its examination program. Member firms must make these documents available to FINRA, as well as any information that would reveal the existence of an SAR or any decision not to file an SAR.

Source: FINRA Regulatory Notice 12-08

This alert applies to the Series 79, Series 62, Series 6, Series 26, Series 24, Series 99, Series 7, and Series 82

Exam Alert: NYSE Euronext and Deutsche Boerse cancel merger after EU ruling

On February 1, 2012, the European Commission blocked the merger of NYSE Euronext and Deutsche Boerse, two major exchanges, on the grounds that the combined entity would have a near-monopoly on the European derivatives market. On February 2, 2012, NYSE Euronext announced that, in light of the ruling, both companies have agreed to cancel the merger. Continue reading

Sources: “EU blocks Deutsche Boerse/NYSE merger, cites near-monopoly”, “NYSE EURONEXT AND DEUTSCHE BOERSE TERMINATE BUSINESS COMBINATION AGREEMENT”

This alert applies to the Series 79, Series 62, Series 24, Series 99, Series 7, Series 65, and Series 66.

Exam Alert: FINRA recommends heightened supervision for complex products

On January 17, 2012, FINRA highlighted the need for firms to have adequate supervisory and compliance programs in place in order for registered representatives to recommend complex products. FINRA identified several characteristics that may cause a product to be considered “complex,” such as embedded derivatives or contingencies. The notice states that agents should determine suitability, consider the customer’s financial sophistication, discuss the products with the customer, and consider alternative investments that could meet the customer’s goals. The firm should also review the performance of the products and train the agents about the products. Continue reading

Source: FINRA Regulatory Notice 12-03

This alert applies to the Series 6, Series 7, Series 24, Series 26, Series 55, Series 62, Series 79, Series 82, Series 99, Series 63, Series 65, and Series 66.

Exam Alert: New passing score for the Series 99 is 68%

First off, congratulations to all of our students who have passed the Series 99: FINRA Operations Professional Exam! We know many of you were anxious about this brand new exam Continue reading

First off, congratulations to all of our students who have passed the Series 99: FINRA Operations Professional Exam! We know many of you were anxious about this brand new exam (and brand new experience with standardized testing for many of you). But your hard work paid off, so well done!

As our students let us know they’ve passed, they’ve also told us that the current passing score for the Series 99 is 68%. Don’t let that low score fool you – this exam will still require hard work and diligent studying to pass. We continue to monitor this brand new exam and will keep you updated to any changes to the passing score or to the exam. Be sure to subscribe to our Blog and regularly check our Exam FAQs and Exam Updates pages to keep current with exam information!

Exam Alert: FINRA changes guidelines for books and records rules

On December 5, 2011, new FINRA rules regarding books and records took effect. These changes affect recordkeeping time limits, customer account information, customer complaints, order information and arbitration agreements. Continue reading

Recordkeeping – the default time limit for keeping records is six years. This means that if FINRA requires a firm to keep a record but does not specify how long the record must be kept, it must be kept for six years. If a change is made to an account and documentation is required to make that change, the documentation must be preserved for six years after the change. If the account is closed, the firm must maintain the most current information about the account for six years after the account closes.

Account information – When opening an account, the signature of the registered representative opening the account is no longer needed. Instead, FINRA requires the signatures of all persons who are responsible for the account. Additionally, discretionary accounts no longer require the age of the person with discretionary authorization. Instead, an acknowledgment that said person is over 18-years-old, without a specific age, is sufficient.

Customer complaints – Firms must now keep records of customer complaints for four years, not three.

Order information – Previously, firms were allowed to accept block orders from an investment adviser for customer accounts if the firm received the specific account names and designations by the end of the business day. Now, firms are allowed to accept orders from an investment adviser for customer accounts if the order involves more than one customer and the firm receives the specific account names and designations by noon of the next business day.

Pre-dispute arbitration agreements – The disclosure language for pre-dispute arbitration agreements has been updated to include that arbitrators are required to explain their decision in eligible cases if all parties involved file a joint request 20 days before the first scheduled hearing date.

To read Regulatory Notice 11-19 where FINRA outlines these changes in more detail, please click here. Additionally, we have included a summary of these changes on our Exam Updates page, where we include updates to the exams on a regular basis. You may want to brush up on these rules if you’re taking the Series 7, 6, 24, 26, 62, 99 and 79!

Take advantage of our NEW reduced prices for our Series 99 products!

Blame the eggnog or perhaps it’s just the holiday spirit, but we have recently reduced our prices for our Series 99 Operations Professional Exam study materials! Continue reading

Blame the eggnog or perhaps it’s just the holiday spirit, but we have recently reduced our prices for our Series 99 Operations Professional Exam study materials! This Bernie Madoff-inspired exam was designed to encourage accountability amongst back office professionals. We currently offer a class and online exam simulator to help you with all your study needs. Our class price has been reduced to $139.95 and our online exam simulator is a steal at $69.95. If you purchase the Basic Package, you will save an extra 10% off the total price!

For more information about our Series 99 products, please click here.

Exam Alert: SEC gives guidance on cyber attack threat disclosure

On October 13, 2011, the Securities and Exchange Commission issued new guidelines that clarify the application of existing disclosure rules. Specifically, the SEC has identified cyber attack incidents, along with the risk of cyber attacks, as material information that must be disclosed to investors. Continue reading

Source: CF Disclosure Guidance: Topic No. 2

Further reading: “SEC tells companies to disclose cyber attacks”

This alert applies to the Series 24, 26, 55, 6, 62, 63, 65, 66, 79, 82, 99, and 7.

Exam Alert: Delayed results for new Series 99 exam candidates

FINRA announced last week that if you take the Series 99 within the first 60 days of October 17, 2011, your exam result will not be Continue reading

FINRA announced last week that if you take the Series 99 within the first 60 days of October 17, 2011, your exam result will not be provided to you the day of the test. Instead, candidates will be notified of their results on or shortly after December 16, 2011. This delay is to give FINRA a chance to review the effectiveness of the exam, which will include analyzing candidates’ performance during this initial period. Those who fail the exam during this initial 60 days will be allowed to re-take the exam at no additional charge.

Find more details about the Series 99 exam from FINRA by clicking here.