Conduct and Practices Handbook Course (CPH) Quiz 29

In the FINRA Rule 11150 (Transactions “Ex-Interest” in Bonds Which Are Dealt in “Flat”), all transactions except “cash” transactions, in bonds or similar evidence of indebtedness which are traded “flat” should be “ex-interest” as prescribed by the following provisions:-

(a) On the first business day preceding the record date if the record date falls on a business day.
(b) On the second business day preceding the record date if the record date falls on a day other than a business day.
(c) On the second business day preceding the date on which an interest payment is to be made if no record date has been fixed.

In the FINRA Rule 11150 (Transactions “Ex-Interest” in Bonds Which Are Dealt in “Flat”), all transactions, except “cash” transactions, in bonds or similar evidence of indebtedness which are traded “flat” shall be “ex-interest” as prescribed by the following provisions:-

(a) On the first business day preceding the record date if the record date falls on a business day.
(b) On the second business day preceding the record date if the record date falls on a day other than a business day.
(c) On the second business day preceding the date on which an interest payment is to be made if no record date has been fixed.

In the FINRA Rule 11150 (Transactions “Ex-Interest” in Bonds Which Are Dealt in “Flat”), all transactions, except “cash” transactions, in bonds or similar evidence of indebtedness which are traded “flat” shall be “ex-interest” as prescribed by the following provisions:-

(a) On the first business day preceding the record date if the record date falls on a business day.
(b) On the second business day preceding the record date if the record date falls on a day other than a business day.
(c) On the second business day preceding the date on which an interest payment is to be made if no record date has been fixed.

In the FINRA Rule 11160 (Sent by Each Party), all type of transactions except “cash” transactions in stocks, bonds or similar evidence of indebtedness shall be “ex” liquidating payments or payments on account of principal in accordance with the formula defined in the RINRA Rules 11140 and 11150.

In the FINRA Rule 11210, each party to a transaction shall send a Uniform Comparison or Confirmation of the same on or before the first business day following the date of the transaction “other than a cash transaction”.

In the FINRA Rule 11210, On the day of trade the comparisons or confirmations of cash transactions shall be exchanged.

The FINRA Rule 11210 shall not be applicable to transactions which clear through the National Securities Clearing Corporation or other clearing organizations registered under the Exchange Act.

In the FINRA Rule 11210, a party to transaction receives a comparison or confirmation or a signed DK, from the contra-member by the close of one business day following the trade date of the transaction after sending a comparison or confirmation of a trade.

In the FINRA Rule 11210, after receipt of the “Don’t Know Notice”, the contra-member shall have two business days after the notice is received to either confirm or DK the transaction.

In the FINRA Rule 11210, if the contra-member desires to respond by messenger, it shall return to the confirming member the second and third copies of the notice which shall indicate clearly whether the contra-member desires to confirm or DK the transaction.

In the FINRA Rule 11210, If the confirming member does not receive a response from the contra-member by the close of two business days after receipt by the confirming member of the fourth copy of the “Don’t Know Notice” if delivered by messenger, or the post office receipt if delivered by mail, such shall constitute a DK and the confirming member shall have no further liability for the trade.

In the FINRA Rule 11210, The “Don’t Know Notice” form may be ordered through any office of FINRA. If the official form is not used, the form which is used must conform in every respect to the official form.

In the FINRA Rule 11310 (Book-Entry Settlement), a member shall use the facilities of a securities depository for the book-entry settlement of all transactions in depository eligible securities with another member or a member of a national securities exchange or a registered securities association.

In the FINRA Rule 11310 (Book-Entry Settlement), a member shall not affect a delivery-versus-payment or receipt-versus payment transaction in a depository eligible security with a customer unless the transaction is settled by book-entry using the facilities of a securities depository.

In the FINRA Rule 11310 (Book-Entry Settlement), the “depository eligible securities” describes by the following statements:-

(a) The securities that are part of an issue of securities that is eligible for deposit at a securities depository.
(b) The securities with respect to a particular transaction, are eligible for book-entry transfer at the depository at the time of settlement of the transaction.

The FINRA Rule 11310 (Book-Entry Settlement) shall not apply to any transactions where the securities to be delivered in settlement of the transaction are not on deposit at a securities depository on the following condition:-

(a) If the transaction is for same-day settlement, the deliverer is unable to deposit the securities in a securities depository prior to the cut-off time established by the depository for same-day crediting of deposited securities.
(b) The deliverer is unable to deposit the securities in a depository prior to the cut-off date established by the depository for that issue of securities.

In the FINRA Rule 11320 (Dates of Delivery), in connection with a transaction for “cash,” delivery shall be made at the office of the purchaser on the day of the transaction.

In the FINRA Rule 11320 (Dates of Delivery), in connection with a transaction “regular way,” delivery shall be made at the office of the purchaser on, but not before, the second business day following the date of the transaction.

In the FINRA Rule 11320 (Dates of Delivery), in connection with a transaction “buyer’s option,” delivery shall be made at the office of the purchaser on the date on which the option expires.

In the FINRA Rule 11320 (Dates of Delivery), the contracts shall mature on the next business day that are due on a day other than a business day.

In the FINRA Rule 11320 (Dates of Delivery), in connection with a transaction made for “delayed-delivery,” delivery shall be at the office of the purchaser on the date agreed upon at the time for the transaction.

In the FINRA Rule 11361 (Units of Delivery-Stocks), the following statements best describe the stock certificates delivered in settlement of contracts:-

(a) In which the transaction is for 100 shares may be in one certificate for the exact number of shares or certificates totaling 100 shares.
(b) In which the transaction is greater than 100 shares and a multiple of 100 shall be in the exact amount of the contract, or in multiples of 100 shares, or in amounts from which units of 100 shares can be made, or a combination thereof equaling the amount of the contract.
(c) In which the transaction is for more than 100 shares but not in a multiple of 100 shall be in multiples of 100 shares, or in amounts from which units of 100 shares can be made, or a combination thereof, plus either the exact amount for the odd lot or smaller amounts equaling the odd lot.
(d) In which the transaction is for less than 100 shares shall be in the exact amount of the contract or for smaller units aggregating the amount of the contract.

In the FINRA Rule 11362 (Units of Delivery- Bonds), each delivery of bonds or similar evidence of indebtedness in coupon bearer form “Coupon Bonds” shall be made in denominations of $1,000 or in denominations of $100 or multiples thereof aggregating $1,000.

In the FINRA Rule 11362 (Units of Delivery- Bonds), each delivery of bonds or similar evidence of indebtedness in fully registered bond “Registered Bonds” issued shall be made in denominations of $1,000 or multiples thereof or in amounts of $100 or multiples aggregating $1,000 but in no event in denominations larger than $100,000.

In the FINRA Rule 11363 (Units of Delivery – Unit Investment Trust Securities), for the Unit Investment Trust Securities the minimum unit of delivery shall be calculated as a single unit of the trust.

In the FINRA Rule 11550 (Assignments and Powers of Substitution; Delivery of Registered Securities), The signature to an assignment or power of substitution shall be technically correct; i.e., it shall correspond with the name as written upon the certificate in every particular without alteration or enlargement, or any change whatever, except that “and” or “&” “Company” or “Co.” may be written either way.

In the FINRA Rule 11550 (Assignments and Powers of Substitution; Delivery of Registered Securities), provision for the irrevocable appointment of an attorney with the power of substitution and a full description of the security, including the name of the issuer, issue, certificate number, and amount (expressed in words and numerals) should be contained in a separate (detached) assignment.

In the FINRA Rule 11550 (Assignments and Powers of Substitution; Delivery of Registered Securities), A certificate registered in the names of two or more individuals or firms shall be a good delivery only if signed by all the registered owners.

In the FINRA Rule 11550 (Assignments and Powers of Substitution; Delivery of Registered Securities), any alteration or correction in an assignment or power of substitution shall be accompanied by an explanation on the original instrument signed by the person or firm executing the same.

In the FINRA Rule 11620 (Computation of Interest), in the settlement of contracts in interest-paying securities other than for “cash,” there shall be added to the dollar price interest at the rate specified in the security, which shall be computed up to but not including the second business day following the date of the transaction. In transactions for “cash,” interest shall be added to the dollar price at the rate specified in the security up to but not including the date of transaction.