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FINRA Exam 227 Questions with Verified Answers,100% CORRECT
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FINRA Exam 227 Questions with Verified Answers
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FINRA Exam 227 Questions with Verified AnswersSEC Rule 17a-5(d)(1)(i) - CORRECT ANSWER requires every broker or dealer
registered to file a certified annual audit no later than 60 calendar days from their
designated fiscal year end
A completed SEC form X-17A-5, Part III, - CORRECT ANSWER Document used to
identify annual audit reports & must accompany the annual audit.
The form contains space for a firm's name and address, the name and address of
an accountant, the oath or affirmation, and a checklist of items included in the
report.
Filing this report that they can receive confidential treatment for all parts other
than the statement of financial condition. Member firms desiring such
confidential treatment should review the provisions of subparagraph (e)(3) of SEC
Rule 17a-5. Any portion that you wish to be treated as confidential should be
bound separately from the statement of financial condition.
2 copies of the audited report must be filed with the Principal Office of the SEC in
Washington, DC, one copy to the appropriate Regional/District Office of the SEC,
and one copy to FINRA submitted through the Firm Gateway annual audit
electronic submission interface. The audit must be submitted to FINRA in Portable
Document Format (PDF).
Extension request need to be done in writing
Rule 4530 - CORRECT ANSWER requires firms to report to FINRA certain specified
events and quarterly statistical and summary information regarding written
customer complaints.
FINRA Rule 4530 was modeled after NASD Rule 3070 and NYSE Rule 351. Any
matter that becomes subject to reporting or filing prior to July 1, 2011, must be
reported or filed in accordance with the requirements of NASD Rule 3070 and
,NYSE Rule 351, as applicable, including the reporting and filing deadlines of those
rules. Any matter that becomes subject to reporting or filing on or after July 1,
2011, must be reported or filed in accordance with the requirements of FINRA
Rule 4530
Report no later than 30 calendar days after the firm knows or should have known
of their existence.
Must report within 30 calendar days after the firm has concluded, or reasonably
should have concluded, on its own that the firm or an associated person of the
firm has violated any securities-, insurance-, commodities-, financial- or
investment-related laws, rules, regulations or standards of conduct of any
domestic or foreign regulatory body or self-regulatory organization.
The statistical and summary information regarding customer complaints is due
quarterly by the 15th calendar day from the end of the quarter.
Must be filed electronically via the Regulatory Filings Application on the FINRA
Firm Gateway
Short Interest Reporting - CORRECT ANSWER New Exchange/Market Code for
Reporting Short Interest Positions
Effective December 15, 2011, FINRA's Web-based Regulation Filing Applications
(RFA) will include a new exchange/market code "H" for reporting short interest
positions in securities listed on the BATS Exchange
firms must report short interest positions in all securities—including NASDAQ,
NYSE, NYSE Amex, NYSE Arca and OTC equity securities—through a single source
on a bi-monthly basis: FINRA's Web-based Regulation Filing Applications (RFA)
system
Blue Sheets - CORRECT ANSWER Blue sheets provide the SEC with detailed
information about trades performed by a firm and its clients. The information
includes the security's name, the date traded, price, transaction size and a list of
the parties involved.
,The questionnaires came to be known as blue sheets because they were printed
on blue paper. Today, due to the high volumes of trades, this information is
provided electronically though electronic blue sheet systems or EBS.
Advertising Regulation Electronic Files - CORRECT ANSWER Advertising Regulation
Electronic Files (AREF) is a Web-based application that enables FINRA member
firms to file communications with the public for review by FINRA's Advertising
Regulation Department (Department). In addition, members may use AREF to
view, print, and save Department letters about communications filed for review.
Members may also access real time filing fee information via AREF.
Regulation M Filings - CORRECT ANSWER Designed to prevent manipulation by
individuals with an interest in the outcome of an offering, and prohibits activities
and conduct that could artificially influence the market for an offered security.
FINRA's Market Regulation Department reviews over-the-counter trading and
quoting activity for prohibited purchases, bids or attempts to induce bids or
purchases during the applicable restricted period, and for prohibited short sales
during the five-day period prior to pricing the offering. Per FINRA rules, firms must
provide FINRA with pertinent distribution-related information in a timely fashion
to facilitate this component of its Regulation M compliance program.
Filed electronically
Regulation T - CORRECT ANSWER Regulation T and SEC Rule 15c3-3 provide for
the possibility of extensions of credit by broker-dealers to investors when they
have not promptly paid for a securities transaction.
Specifically, Regulation T gives an investor a maximum of five business days to pay
for securities purchased in a cash or margin account. If payment due exceeds
$1,000 and is not received by the end of this time period, the broker-dealer must
either liquidate the position or apply for and receive an extension from its
designated examining authority, such as FINRA.
SEC Rule 15c3-3 pertains to a customer's obligations when securities are sold,
other than short sales. The rule requires that if a security sold long has not been
delivered within 10 business days after the settlement date, the broker-dealer
, must either buy the customer in, or apply for and receive an extension from its
designated examining authority.
Firms must file Regulation T and SEC Rule 15c3-3 extension of time requests via
FINRA's Regulatory Extension (REX) system (formerly known as the Reg T
application)
Reminder for Clearing Firms: Clearing firms have obligations under the Net Capital
Rule relative to Regulation T and outstanding deposits and/or margin, as
described in SEC Rule 15c3-1 (c) (2) (iv) (B). In addition, if a customer fails to meet
his/her responsibilities to deliver a security and that failure results in a clearing
firm fail-to-deliver, the Net Capital Rule requires charges under certain conditions.
These changes are outlined in SEC Rule 15c3-1 (c) (2) (ix).
FINRA Rule 4311(h)(2) replaced NASD Rule 3230(c)(3) - CORRECT ANSWER
Requires that each year, by no later than July 1, each clearing/carrying member
firm notify in writing the introducing/correspondent member firm's chief
executive and compliance officers of the reports offered to the introducing
member firm pursuant to 4311(h)(1) and the reports requested by or supplied to
the introducing member firm as of such date. Rule 4311(h)(2) also requires the
clearing member firm to provide to the introducing member firm's DEA a copy of
both the notice of available reports and the list of reports requested by or
supplied to the introducing member firm. The same process is required by NYSE
Rule 382. Submission in electronic format, such as Adobe PDF, is requested.
Regulatory Financial Notifications
Rule 15c3-1(e) - CORRECT ANSWER Withdrawals of equity capital
Regulatory Financial Notifications
Rule 15c3-3(i) - CORRECT ANSWER Special Reserve Bank Account
Rule 17a-4(f)(2)(i)
Rule 17a-4(f)(3)(vii - CORRECT ANSWER Electronic storage media
Rule 17a-5(f)(4) - CORRECT ANSWER Replacement of Accountant
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