Investment Dealer Supervisors Course (IDSC) Practice Questions And Answers

In the FINRA Rule 11860 (COD Orders), the member shall deliver to the customer, a confirmation or all relevant data customarily contained in confirmation with respect to the execution of the order, in whole or in part, not later than the close of business on the next business day after any such execution.

The following statements define the “Qualified Vendor” that is a vendor or electronic confirmation and affirmation service that shall, for each transaction subject to FINRA Rule 11860 (COD Orders):-

(a) That shall deliver a trade record to a Clearing Agency in the Clearing Agency’s format.
(b) That shall obtain a control number for the trade record from the Clearing Agency.
(c) That shall cross-reference the control number to the confirmation and subsequent affirmation of the trade.
(d) That shall include the control number when delivering the affirmation of the trade to the Clearing Agency.

In the FINRA Rule 11860 (COD Orders), a written “Auditor’s Report” prepared by competent, independent, external audit personnel in accordance with the standards of the American Institute of Certified Public Accountants and the Information Systems Audit and Control Association.

In the FINRA Rule 11620 (Computation of Interest), the number of elapsed days should be computed in accordance with the following examples:-

(a) From 1st to 30th of the same month to be figured as 29 days.
(b) From 1st to 31st of the same month to be figured as 30 days.
(c) From 1st to 1st of the following month to be figured as 30 days.
(d) From 1st to 28th of February to be figured as 27 days.
(e) From the 23rd of February to the 3rd of March is to be figured as 10 days.
(f) From the 15th of May to the 6th of June is to be figured as 21 days.

In the FINRA Rule 11620 (Computation of Interest), where interest is payable on 30th or 31st of the month, the number of elapsed days should be computed in accordance with the following examples:-

(a) From 30th or 31st to 1st of the following month to be figured as 1 day.
(b) From 30th or 31st to 30th of the following month to be figured as 30 days.
(c) From 30th or 31st to 31st of the following month to be figured as 30 days.
(d) From 30th or 31st to 1st of the second following month to be figured as 1 month, 1 day.

In the FINRA Rule 11620 (Computation of Interest), when delivery of security traded “flat” is made after the record date fixed for the purpose of determining the holder entitled to receive interest, in the settlement of a contract made prior to the date on which the security was traded “ex-interest,” a due-bill check for the full amount of the interest to be paid shall accompany the delivery.

In the FINRA Rule 11810 (Buy-In Procedures and Requirements), for purposes of this Rule, written notice shall include an electronic notice through a medium that provides for an immediate return receipt capability. Such electronic media shall include but not be limited to facsimile transmission, a computerized network facility, or the electronic functionality of a registered clearing agency.

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 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.

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 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 2251 (Processing and Forwarding of Proxy and Other Issuer-Related Materials), In the case of a meeting for which an opposition proxy has been furnished to security holders, the Intermediary Unit Fee shall be 25 cents per account, with a minimum fee of $5,000.00 per soliciting entity as the case may be. Where there are separate solicitations by management and an opponent, the opponent is to be separately billed for the costs of its solicitation.

In the FINRA Rule 2251 (Processing and Forwarding of Proxy and Other Issuer-Related Materials), the charges for providing beneficial ownership information are six and one-half cents per name of the non-objecting beneficial owner (“NOBO”) provided to the issuer pursuant to the issuer’s request.

In the FINRA Rule 2251 (Processing and Forwarding of Proxy and Other Issuer-Related Materials), A minimum fee of $100 should be charged for providing a beneficial ownership information list.

In the FINRA Rule 4150 (Guarantees by, or Flow-through Benefits for, Members), A member may at any time be required to provide FINRA with information with respect to the arrangement, relationship and dealings with a person related to member’s guarantees endorse or assumes, directly or indirectly, the obligations or liabilities of another person.

In the FINRA Rule 4521 (Notifications, Questionnaires and Reports), each carrying or clearing member shall notify FINRA in writing, no more than 48 hours after its tentative net capital as computed pursuant to SEA Rule 15c3-1 has declined 20 percent or more from the amount reported in its most recent FOCUS Report or if later, the most recent such notification filed with FINRA.

In the FINRA Rule 2251 (Processing and Forwarding of Proxy and Other Issuer-Related Materials), A member shall process and forward promptly all information as required by this Rule and applicable SEC rules regarding security to the beneficial owner (or the beneficial owner’s designated investment adviser) if the member carries the account in which the security is held for the beneficial owner and the security is registered in a name other than the name of the beneficial owner.

The Board of Governors for the guidance of members is authorized to establish a suggested rate of reimbursement of members for expenses incurred in connection with processing and transmitting the proxy solicitation to the beneficial owners of the securities pursuant or in processing and transmitting information statements or other material to the beneficial owners of securities pursuant.

In the FINRA Rule 2251 (Processing and Forwarding of Proxy and Other Issuer-Related Materials), An Intermediary Unit Fee for each set of proxy material, based on the following schedule according to the number of nominee accounts through which the issuer’s securities are beneficially owned:-

(a) 14 cents for each account up to 10,000 accounts.
(b) 13 cents for each account above 10,000 accounts, up to 100,000 accounts.
(c) 11 cents for each account above 100,000 accounts, up to 300,000 accounts.
(d) 9 cents for each account above 300,000 accounts, up to 500,000 accounts.
(e) 7 cents for each account above 500,000 accounts.

In the FINRA Rule 1017 (Application for Approval of Change in Ownership, Control, or Business Operations), if the Department does not require the Applicant to participate in a membership interview or request additional information or documents, the Department shall serve a written decision within 45 days after the filing of the application.