Security Exam Chapter 16

True or False: Aunts and uncles are not considered immediate family under the New Issue Rule.

• True

• False

True or False: Immediate family members of employees of the issuer are restricted from buying the IPO.

• True

• False. Immediate family members of employees of BDs (not the issuer) may be restricted.

True or False: Market makers are permitted to pay other parties to influence a stock's price.

• True

• False, this is prohibited.

True or False: RRs are always prohibited from sharing in a customer's account.

• True

• False. RRs may share in a customer's account if they have permission and sharing is proportionate to their investment.

True or False: According to the Equity IPO Rule, all associated persons connected to a BD are restricted.

• True. The associated persons of a BD include owners, officers, directors, and other employees.

• False

A temporary hold will expire by no later than ____ business days after the date that it was first placed on the account.

True or False: Municipal dealers must disclose all material information to a customer at or prior to a trade.

• True. This is a requirement under MSRB Rule G-47.

• False

True or False: For an IPO, the brother of an RR is considered a restricted person.

• True

• False

According to the Equity IPO Rule, member firms and their associated persons are considered _________persons.

To begin using a form of electronic storage (other than CD-ROM), the BD's DEA requires a ____-days advance notice.