Series 55

Study Question of the Month – January 2016

This month’s study question from the Solomon Online Exam Simulator question database is now available! Relevant to the Series 7, Series 24, Series 55, and Series 62. –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 55, and Series 62): A market maker has a listed a quote of 32.20 – 32.80, 12 x 7 for ABCD stock on NASDAQ. The market maker accepts a buy limit order from a customer for 200 shares at 32.60. What quote will the market maker have to display to comply with a SEC rules?

Answers:

A. 32.60 – 32.80, 10 x 7

B. 32.20 – 32.80, 12 x 7

C. 32.60 – 32.80, 2 x 7

D. 32.20 – 32.80, 2 x 7

Correct Answer: C. 32.60 – 32.80, 2 x 7

Rationale: The SEC requires market makers to immediately (within 30 seconds) display customer limit orders that are better than their current best quote for NMS stocks. In this case, the buy limit order is better than the market maker’s current bid (32.60 > 32.20) so the market maker must immediately display the adjusted quote.

Congratulations to David A., this month’s Study Question of the Month winner!

New Securities Trader Qualification Exam (Series 57)

FINRA recently announced that it plans to file a proposed rule change with the SEC to replace the Equity Trader Limited Representative Exam (Series 55) with a new exam to be called the Securities Trader Qualification Exam (Series 57). FINRA will file this proposed rule change in conjunction with the national securities exchanges proposed rule changes to similarly replace the Proprietary Trader Qualification Exam (Series 56) with the Securities Trader Qualification Exam (Series 57). In preparation for the Series 57—a merger of the Series 55 and Series 56—FINRA will conduct a detailed job-analysis survey to gather information from individuals currently Series 55 and Series 56 registered regarding their present roles and responsibilities to ensure that the Series 57 exam accurately covers their day-to-day job functions.

You can read the official announcement on FINRA’s website: http://www.finra.org/industry/information-notice-033115

SEC wants off-exchange broker-dealers to become members of FINRA or other securities association

On March 25, the Securities and Exchange Commission proposed rule amendments to require that broker-dealers trading in off-exchange venues become members of a national securities association. According to SEC Chair Mary Jo White, “today’s proposed rules would close a regulatory gap by extending oversight to a significant portion of off-exchange trading.”

The proposed amendments to Rule 15b9-1 under the Exchange Act would eliminate the proprietary trading exemption and replace it with a narrower one that will permit a floor-based dealer to engage in off-exchange transactions only if such transactions hedge the broker-dealer’s floor-based trading. The proprietary trading exemption originally was designed to accommodate exchange specialists and other floor members that might need to conduct limited hedging or other off-exchange activities ancillary to their floor-based business. Over time, the markets have undergone a substantial transformation, including the emergence of active cross-market proprietary trading firms, many of which engage in so-called high-frequency trading strategies. Although the business of these firms may not be focused on an exchange floor, and they may be responsible for a substantial percentage of the trading volume in the off-exchange market, many are not members of a national securities association because they have been able to rely on the broad proprietary trading exemption in Rule 15b9-1.

The proposed amendments would amend the exemption to target the broker-dealers for which it was originally designed – those with a business focused on an exchange floor and over which that exchange is positioned to oversee the entirety of their trading activity. They also would update the exemption that permits off-exchange transactions necessary to comply with regulatory requirements restricting trade-throughs, under Rule 611 of Regulation NMS.

The SEC will take public comment on the proposed rule amendment for 60 days following publication in the Federal Register.

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.

Testimonial Tuesday: July 8, 2014 Edition

“…I did some research online and someone on a blog recommended Solomon Prep, so I decided to give them a try, and I AM GLAD I DID…I took 5 practice exams (110 question), before a single question was repeated…” Continue reading

“I studied for the Series 55, and used Pass Perfect as well as Kaplan’s study materials. They both were a little helpful, but I had one opportunity to pass the Series 55 for my job, and did not want to take any chances. I did some research online and someone on a blog recommended Solomon Prep, so I decided to give them a try, and I AM GLAD I DID. Unlike Kaplan/Pass Perfect, I took 5 practice exams (110 question), before a single question was repeated. I found this to be extremely helpful, because I was being exposed to all of the possible material that could be covered on the exam. Additionally their customer service is outstanding. There’s a tab on the testing page that says “ask a professor”, I had a question … hit the tab, and 10 minutes later a professor was there to answer my questions. Anyway, awesome service I would recommend and repeat.”

– O. Harrison, Brooklyn, NY

Read more reviews here: Solomon Exam Prep Reviews

Study Question of the Week: April 23, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 24, Series 55, Series 62, and Series 79. –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 24, Series 55, Series 62, and Series 79):

The price of a 10b-18 repurchase transaction:

Answers:

A. Must not exceed the highest independent bid or the last independent transaction price, whichever is higher

B. Must not exceed the highest independent bid or the last independent transaction price, whichever is lower

C. Must not exceed the lowest independent offer or the last independent transaction price, whichever is higher

D. Must not exceed the lowest independent offer or the last independent transaction price, whichever is lower

Correct Answer: A. Must not exceed the highest independent bid or the last independent transaction price, whichever is higher

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

Study Question of the Week: February 19, 2014 Edition

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 24, Series 55, Series 62, and Series 79):

In order to qualify for the Rule 10b-18 safe harbor for repurchases, which of the following is correct?

I. The repurchase transactions made in a single day must occur through only one broker-dealer

II. The repurchase transactions made in a single week must occur through no more than two broker-dealers

III. The repurchase transactions must occur within 10 minutes of market open or within 30 minutes of market close

IV. The repurchase transactions must not be the opening transaction or within 30 minutes of market close

Answers:

A. I and III

B. I and IV

C. II and III

D. II and IV

Correct Answer: B. I and IV

Rationale: Rule 10b-18 provides a safe harbor for issuer repurchase transactions. It allows the issuer to repurchase its own stock without being liable for manipulation based solely on the manner, timing, price, and volume of the repurchase transactions. In order to qualify, any repurchase transactions made in a single day must be made through only one broker-dealer. The transactions also must not be the opening transaction or within 30 minutes of the close of that market. For actively traded securities, the transactions must not be the opening purchase or within 10 minutes of the close of that market (actively traded securities are those with an ADTV of at least $1 million and a public float of at least $150 million). The transactions must comply with price and volume limitations as well.

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

Testimonial Tuesday: October 22, 2013 Edition

“I pass the Series 55! I loved your program because I can take quizzes on my iPhone…” Continue reading

“I passed the Series 55! I loved your program because I can take quizzes on my iPhone and test myself where ever I go. Thanks for your help.” -Morris Gordon, Merrill Lynch, Jacksonville, FL

Study Question of the Week: September 16, 2013 Edition

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

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

Question (Relevant to the Series 7, Series 24, Series 55, and Series 62):

According to the Alternative Uptick Rule, if a stock declines by 10% or more from the previous day’s close, a short sale can only be made at a price:

Answers:

A. Above the best bid for the remainder of the trading day and the next trading day

B. At or below the best bid for the remainder of the trading day and the next trading day

C. Above the best ask for the remainder of the trading day and the next trading day

D. At or below the best ask for the remainder of the trading day and the next trading day

Correct Answer: A. Above the best bid for the remainder of the trading day and the next trading day

Rationale: According to the Alternative Uptick Rule, if a stock declines by 10% or more from the previous day’s close, a short sale can only be made at a price above the best bid for the remainder of the trading day and the next trading day. The alternative uptick rule can only be triggered during regular market hours, but the pricing restriction holds during regular and extended trading hours. The rule only applies to NMS securities traded on or off an exchange. The Alternative Uptick Rule is also referred to as the Rule 201 Circuit Breaker. Orders marked short exempt are exempt from this rule.

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

Exam Alert: FINRA modifies Series 55 outline and passing score

Effective August 12, 2013, FINRA will revise the Series 55 exam program. This includes significant changes to the Series 55 content outline, along with a change in the passing score. Continue reading

Effective August 12, 2013, FINRA will revise the Series 55 exam program. This includes significant changes to the Series 55 content outline, along with a change in the passing score. The current passing score is 70% – the new passing score will be 67%. The breakdown of questions by topic will also change, though the total number of questions will remain at 100 scored plus 10 unscored. The new breakdown is as follows:

-Trading: 45 questions

-Order Handling: 36 questions

-Record Keeping and Regulatory Reporting: 19 questions

The new exam outline can be found here.

Source: Regulatory Notice 13-22: FINRA Revises the Series 55 Examination Program

This alert applies to the Series 55.