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 2020 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 2020 is your ticket to passing the Series 10 test on the first try - with flying colors!
Table of Contents
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 26
Customer Confirmations 26
Rules for Good Delivery 27
Delivery of Round Lots 28
Delivery of Bond Certificates 29
Rejection of Delivery 29
Reclamation 30
Marking to the Market 30
Customer Account Statements 30
Carrying of Customer Accounts 31
Dividend Distribution 32
Proxies 35
Box Counts 35
Missing and Lost Securities 36
The Customer Protection Rule 37
Broker Dealer Books and Records 38
Pretest 43
Chapter 2 General Supervision and Customer Recommendations 47
The Role of the Principal 47
Supervisor Qualifications and Prerequisites 48
Continuing Education 49
Tape Recording Employees 51
Heightened Supervisory Requirements 52
Information Obtained from an Issuer 52
Customer Complaints 52
Mediation 53
Code of Arbitration 54
Investor Information 56
Member Offices 56
Business Continuity Plan 60
Recommendations to Customers 61
Research Reports 72
Recommendations through Social Media 75
Regulation FD (Fair Disclosure) 77
The Insider Trading & Securities Fraud Enforcement Act of 1988 77
Firewall 78
Pretest 79
Chapter 3 Supervision of Customer Accounts 81
Opening a New Account 81
Holding Securities 83
The Depository Trust Company (DTC) 84
Mailing Instructions 85
Types of Accounts 85
Trading Authorization 88
ABLE accounts 92
Retirement Plans 94
Accounts for Employees of Other Broker Dealers 106
Numbered Accounts 107
Prime Brokerage Accounts 107
Account Transfers 107
Margin Accounts 109
Special Memorandum Account (SMA) for a Long Margin Account 116
Wrap Accounts 126
Regulation S-P 126
Identity Theft 127
FINRA Rules on Financial Exploitation of Seniors 128
Currency Transactions 129
The Patriot Act 129
Isolated Sales Account 131
Securities Investor Protection Corporation Act of 1970 (SIPC) 132
Health Savings Accounts 133
The Department of Labor Fiduciary Rules 133
The Penny Stock Cold Call Rule 134
Pretest 137
Chapter 4 Sales Supervision of New Issues 141
The Securities Act of 1933 141
Freeriding and Withholding/FINRA Rule 5130 145
Underwriting Corporate Securities 147
Exempt Securities 151
Exempt Transactions 152
Rule 147 Intrastate Offering 159
Rule 137 Nonparticipants 159
Rule 138 Nonequivalent Securities 160
Rule 139 Issuing Research Reports 160
Rule 415 Shelf Registration 161
Regulation M, Rule 104 161
Underwriting Direct Participation Programs 163
Investment Company Registration 164
Mutual Fund Distribution 165
Pretest 171
Chapter 5 Supervision of the Secondary Market 175
The Securities Exchange Act of 1934 175
Listing Requirements for the NYSE 180
Types of Orders 183
The Exchanges 186
Priority of Exchange Orders 187
Limit Up Limit Down (LULD) 201
The Nasdaq Market 202
Pink OTC Market 213
Trade Reporting and Comparison Service (TRACS) 213
Advanced Computerized Execution System (ACES) 214
The Order Audit Trail System (OATS) 214
Electronic Communication Networks (ECNs) 215
Direct Market Access 216
Rogue Trading Prevention 217
Third Market 217
Nasdaq Market Center for Listed Securities 218
Fourth Market 218
SEC Regulation ATS 218
FINRA 5% Markup Policy 219
Markups and Markdowns When Acting as a Principal 220
Riskless Principal Transactions 221
Proceeds Transactions 221
Dominated and Controlled Markets 222
ACT/TRF Trade Scan 222
Pretest 227
Chapter 6 MSRB Rules and Regulations 231
Municipal Bonds 231
Issuing Municipal Securities 232
Municipal Fund Securities 243
Variable Rate Securities 244
Municipal Bond Trading 244
Recommending Municipal Bonds 250
Municipal Bond Advertising 250
Municipal Bond Insurance 250
Political Contributions 251
Registration Requirements for Municipal Securities Professionals 253
MSRB Overview 254
Pretest 259
Answer Keys 263
Glossary of Exam Terms 269
Index 335
