Wiley Series 10 Security Licensing Exam Review 2019 + Test Bank

The go-to guide to acing the Series 10 Exam!

Passing the General Securities Sales Supervisor Qualification Exam (Series 9 and 10) qualifies an individual to supervise sales activities in corporate, municipal, and option securities; investment company products; variable contracts; and direct participation programs. The exam covers hiring, qualification, and continuing education; supervision of accounts and sales activities; conduct of associated persons; recordkeeping requirements; and municipal securities regulation. All candidates must have passed the Series 7 Exam before taking the Series 10.

Created by the experts at The Securities Institute of America, Inc., Wiley Series 10 Exam Review 2019 arms you with everything you need to pass this four-hour, 145-question test. Designed to help you build and fine-tune your knowledge of all areas covered in the exam and to guarantee that you're prepared mentally and strategically to take the test, it provides:

• Dozens of examples
• Assorted practice questions for each subject area covered in the exam
• Priceless test-taking tips and strategies
• Helpful hints on how to study for the test, manage stress, and stay focused

Wiley Series 10 Exam Review 2019 is your ticket to passing the Series 10 test on the first try—with flying colors!

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ABOUT THE SERIES 10 EXAM xi

ABOUT THIS BOOK xv

ABOUT THE TEST BANK xvii

ABOUT THE SECURITIES INSTITUTE OF AMERICA xix

CHAPTER 1 SUPERVISION OF BROKERAGE OFFICE PERSONNEL AND PROCEDURES 1

Hiring New Employees 1

Resignation of a Registered Representative 3

Registration Exemptions 4

Foreign Broker Dealers 5

Compensation Paid to Unregistered Persons 5

Retiring Representatives/Continuing Commissions 6

Persons Ineligible to Register 6

Disciplinary Actions against a Registered Representative 7

Termination for Cause 8

Outside Employment 9

Private Securities Transactions 9

Gift Rule 9

Communications with the Public 10

FINRA Rule 2210 Communications with the Public 11

Broker Dealer Websites 14

Sharing in a Customer’s Account 15

Borrowing and Lending Money 15

Order Tickets 16

Executing an Order 16

Becoming a Stockholder 17

Accrued Interest 22

Close Outs 23

Customer Confirmations 23

Rules for Good Delivery 24

Delivery of Round Lots 25

Delivery of Bond Certificates 26

Rejection of Delivery 26

Reclamation 27

Marking to the Market 27

Customer Account Statements 27

Carrying of Customer Accounts 28

Dividend Distribution 29

Proxies 32

Box Counts 32

Missing and Lost Securities 33

The Customer Protection Rule 34

Broker Dealer Books and Records 35

Pretest 41

CHAPTER 2 GENERAL SUPERVISION AND CUSTOMER RECOMMENDATIONS 45

The Role of the Principal 45

Supervisor Qualifications and Prerequisites 46

Continuing Education 47

Tape Recording Employees 49

Heightened Supervisory Requirements 50

Information Obtained from an Issuer 50

Customer Complaints 50

Mediation 51

Code of Arbitration 52

Investor Information 54

Member Offices 54

Business Continuity Plan 58

Recommendations to Customers 59

Research Reports 68

Recommendations through Social Media 71

Regulation FD (Fair Disclosure) 72

The Insider Trading & Securities Fraud Enforcement Act of 1988 73

Firewall 74

Pretest 75

CHAPTER 3 SUPERVISION OF CUSTOMER ACCOUNTS 77

Opening a New Account 77

Holding Securities 79

The Depository Trust Company (DTC) 80

Mailing Instructions 81

Types of Accounts 81

Trading Authorization 84

ABLE Accounts 88

Retirement Plans 90

Accounts for Employees of Other Broker Dealers 102

Numbered Accounts 103

Prime Brokerage Accounts 103

Account Transfers 103

Margin Accounts 105

Special Memorandum Account (SMA) for a Long Margin Account 112

Wrap Accounts 122

Regulation S-P 122

Identity Theft 123

FINRA Rules on Financial Exploitation of seniors 124

Currency Transactions 125

The Patriot Act 125

Isolated Sales Account 127

Securities Investor Protection Corporation Act of 1970 (SIPC) 128

Health Savings Accounts 129

The Department of Labor Fiduciary Rules 129

The Penny Stock Cold Call Rule 130

Pretest 133

CHAPTER 4 SALES SUPERVISION OF NEW ISSUES 137

The Securities Act of 1933 137

Freeriding and Withholding/FINRA Rule 5130 141

Underwriting Corporate Securities 143

Exempt Securities 147

Exempt Transactions 148

Rule 147 Intrastate Offering 154

Rule 137 Nonparticipants 155

Rule 138 Nonequivalent Securities 155

Rule 139 Issuing Research Reports 155

Rule 415 Shelf Registration 156

Regulation M, Rule 104 157

Underwriting Direct Participation Programs 159

Investment Company Registration 159

Mutual Fund Distribution 160

Pretest 167

CHAPTER 5 SUPERVISION OF THE SECONDARY MARKET 171

The Securities Exchange Act of 1934 171

Listing Requirements for the NYSE 176

Types of Orders 179

The Exchanges 182

Priority of Exchange Orders 183

Limit Up Limit Down (LULD) 197

The Nasdaq Market 198

Pink OTC Market 209

Trade Reporting and Comparison Service (TRACS) 209

Advanced Computerized Execution System (ACES) 210

The Order Audit Trail System (OATS) 210

Electronic Communication Networks (ECNs) 211

Direct Market Access 212

Rogue Trading Prevention 213

Third Market 213

Nasdaq Market Center for Listed Securities 213

Fourth Market 214

SEC Regulation ATS 214

FINRA 5% Markup Policy 215

Markups and Markdowns When Acting as a Principal 216

Riskless Principal Transactions 217

Proceeds Transactions 217

Dominated and Controlled Markets 217

ACT/TRF Trade Scan 218

Pretest 223

CHAPTER 6 MSRB RULES AND REGULATIONS 227

Municipal Bonds 227

Issuing Municipal Securities 228

Municipal Fund Securities 239

Variable Rate Securities 240

Municipal Bond Trading 240

Recommending Municipal Bonds 246

Municipal Bond Advertising 246

Municipal Bond Insurance 246

Political Contributions 247

Registration Requirements for Municipal Securities Professionals 249

MSRB Overview 250

Pretest 255

ANSWER KEYS 259

GLOSSARY OF EXAM TERMS 265

INDEX 331

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