Conduct and Practices Handbook Course (CPH) Quiz 26

In the FINRA Rule 11870 (Customer Account Transfer Contracts), A carrying member may not reject (“DK”) a fail contract, including a Receive/Deliver Instruction generated by an automated customer account transfer system, in connection with assets in an account that has been transferred but which assets have not been delivered to the receiving member.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), when a member receives a claim notice relating to securities account asset transfer, the member must resolve the claim within five (5) business days from receipt of such claim or take exception to the claiming member by setting forth specific reasons for denying the claim.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), a valued fail contract in a security, for which there are no established close-out procedures, and which has not been completed by the carrying member, may be closed by the receiving member not sooner than the third business day following the date delivery was due.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), written notice shall be delivered to the carrying member at its office not later than 12:00 noon, Eastern Time (ET), two business days preceding the execution of the proposed “close-out.”

In the FINRA Rule 11870 (Customer Account Transfer Contracts), every notice of “close-out” shall state the settlement date, the quantity and contract price of the securities covered by the said contract, and shall state further that unless delivery is effected at or before a certain specified time, which may not be prior to 3:00 p.m. ET, the security may be “closed-out” on the date specified for the account of the carrying member.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), a re-transmitted notice must be delivered to subsequent members not later than 12:00 noon ET one business day preceding the original date of execution of the proposed close-out.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), notice may be redelivered immediately to another member from whom the securities involved are due in the form of a re-transmitted notice.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), re-transmitted notices may be issued against a fail contract regardless of its origin.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), The party executing the “close-out” shall immediately upon execution, but not later than 6:00 p.m. ET on the date of the execution of such “close-out,” notify the member for whose account the securities were bought as to the quantity purchased and the price paid. Such notification shall be in written or electronic form having immediate receipt capabilities.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), The party executing the “close-out” shall immediately upon execution, but not later than 6:00 p.m. ET on the date of the execution of such “close-out,” notify the member for whose account the securities were bought as to the quantity purchased and the price paid. Such notification shall be in written or electronic form having immediate receipt capabilities.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), In the event that a “close-out” is not completed on the day specified in the notice, said notice shall expire at the close of business on the day specified in the notice, or if extended, at the close of business on the last day of the extension.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), it is the responsibility of the receiving member to obtain the approval of its custodian/trustee accepting a customer’s retirement plan securities account before submitting a transfer instruction for such account assets to the carrying member or its custodian/trustee to facilitate the transfer of the account assets.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), each member (including members that do not utilize automated customer securities account asset transfer facilities) is required, for a minimum period of six (6) months after the transfer of securities account assets in whole is completed, to transfer credit balances (both cash and securities) that occur in such transferred account assets within (10) ten business days after the credit balances accrue to the account.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), Members must establish, maintain and enforce written procedures to affect and supervise the transfer of securities account assets pursuant to this Rule that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules.

In the FINRA Rule 11880 (Settlement of Syndicate Accounts), with respect to the transfer of retirement plan securities account assets, the carrying member is responsible for informing the customer that the choice of method of disposition of such assets may result in liability for the payment of taxes and penalties with respect to such assets.

In the FINRA Rule 11880 (Settlement of Syndicate Accounts), “Selling syndicate” means any syndicate formed in connection with a public offering to distribute all or part of an issue of corporate securities by sales made directly to the public by or through participants in such syndicate.

In the FINRA Rule 11880 (Settlement of Syndicate Accounts), a “Syndicate account” means an account formed by members of the selling syndicate for the purpose of purchasing and distributing the corporate securities of a public offering.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), the final settlement of syndicate accounts shall be effected by the syndicate manager within 90 days following the syndicate settlement date.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), no later than the date of the final settlement of the syndicate account, the syndicate manager shall provide to each member of the selling syndicate an itemized statement of syndicate expenses.

In the FINRA Rule 11870 (Customer Account Transfer Contracts), the syndicate manager of a public offering underwritten on a “firm-commitment” basis shall, immediately, but in no event later than the scheduled closing date, notify the FINRA’s Operation Department of any anticipated delay in the closing of such offering beyond the closing date in the offering document or any subsequent delays in the closing date previously reported pursuant to this Rule.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), an Executive Vice President of FINRA’s Market Regulation Department or Transparency Services Department, or any officer designated by such Executive Vice President (FINRA officer), may, on his or her own motion, review any over-the-counter transaction involving exchange-listed security arising out of or reported through a trade reporting system owned or operated by FINRA or FINRA Regulation and authorized by the Commission.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), If a FINRA officer acting pursuant to this Rule declares any transaction null and void, each party involved in the transaction shall be notified as soon as practicable by FINRA.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), the time interval from 9:30 a.m. Eastern Time to 4:00 p.m. Eastern Time is used for calculating the transaction’s % difference from the reference price in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price is greater than $0.00 up to and including $25.00 than the transaction’s % difference from the reference price should be 10% that is calculated in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price is greater than $25.00 up to and including $50.00 than the transaction’s % difference from the reference price should be 5% that is calculated in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price is greater than $50.00 than the transaction’s % difference from the reference price should be 3% that is calculated in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price for any events involving five or more, but less than twenty, securities whose executions occurred within a period of five minutes or less than the transaction’s % difference from the reference price should be 10% that is calculated in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price for any events involving twenty or more securities whose executions occurred within a period of five minutes or less than the transaction’s % difference from the reference price should be 30% that is calculated in normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price is greater than $0.00 up to and including $25.00 than the transaction’s % difference from the reference price should be 20% that is calculated in outside normal market hours numerical guidelines.

In the FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities), if the reference price is greater than $25.00 up to and including $50.00 than the transaction’s % difference from the reference price should be 10% that is calculated in outside normal market hours numerical guidelines.