Exercise settlement of an index option is inCashMax Life of contract9 monthsVIXVolatility Index, Counters market4 CIP InformationName, address, ssn, and DOBSIPC info provided @ ?At account opening protects against BDCustomer must be provided with a copy of arbitration agreement within _____ days of signing30 daysBCP business continuity plan provided @?Account opening and on member firms website mailed upon requestBroker dealers have a _____ standard regulated by whomSuitability. Regulated by FINRA.Investment Adviser subject to _______ standard regulated by whom if small/largeFiduciary standard. They are regulated by state if small or SEC if large. Cannot sell out of inventory.Broker dealers charge ______, while IAs can charge _______BDs: FINRA, Commission/mark-ups
IAs: state/sec charge fixed fees.Reg BI requires customers to receive form _ _ _ which?CRS which lays out details in "plain english"
Relationship, Standard, Costs, AP CRS: RSCAPFINRA 2090 "KYC"Reasonable due diligence to know and retain the essential facts relative to every customer.RR signs new account form ifthey conduct the suitability standard. If a customer wants to open an account online and enters suitability information by themselves, no RR signature is required.Customer must verify account profile within ___ days and send account info every ___ months for verification30 days and every 36 months.FINRA 2111Reasonable basis to believe that a recommended transaction3 Main Components to SuitabilityReasonable, Customer-Specific, and Quantitative.Options disclosure document given whenbefore account is openedOptions agreement needs to be ____ by whenOptions agreement for signature and returned no later than 15 days after account is opened - Only closing transactions permitted if not.Who has to sign new account form for optionsRR and manager (registered options principal)Elder Rule25 days initially and another 30 if reviewed and agreed uponIf customer requests in writing, the mail can be held for ___ months, if longer, there needs to be a reason for this.3 months if longer, then there needs to be a reason aside from convenience.3 Types of BDs:Clearing, introducing, and Clearing Prime
Clearing: Holds securities, trade confirmations, largest, direct links to DTCC and settle all trades.PATRIOT Act 2011anti money laundering
ongoing training
report suspicious activityOFACOffice of Foreign Assets ControlSARFinCEN Suspicious Activity Report within 30 daysCTRA currency transaction report must be filed within 15 days of a cash deposit in excess of $10,0003 phases of money launderingPlacement, layering, integration.Regulation SPRegulation enacted by the SEC to Protect the privacy of customer information, particularly nonpublic personal information. Your firm must provide a privacy notice describing its privacy policies to customers whenever a new account is opened and annually thereafter. The notice must provide customers a reasonable means to opt out of the disclosure of the customer's nonpublic personal information to unaffiliated third parties.Reg T is byReg T sets margin rules by FRB only applies to non-exempt securities and 50%FINRA Minimum maintenance requirementFor long margin accounts, the FINRA maintenance requirement is 25% of the long market value of the account.
For short margin accounts, the FINRA maintenance requirement is 30% of the short market value of the account.
Brokerage firms must ensure that the customer's maintenance margin is sufficient at the end of each day (marking to the market).Regulation Ubrokerage firms cannot borrow more money from banks using customer securities as collateral than the actual amount that they loan to their customers.A margin account cannot be opened unless the customer signs a margin agreement. Under the agreement, the customer _______pledges ( hypothecates) the securities that are purchased in the account to the brokerage firm. In return the brokerage firm loans the customer a portion of price. Loan : "Debit balance"Mutual fund and new issues are not marginable until30 days past3 types of accounts:cash, margin, arbitrageCash account requires collectionunder reg t payment must be made promptly, no later than 2 business days. or within 4 business days.
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