Term
| At or before account approval |
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Definition
| • All customers who are approved by the ROSFP (Registered Options and Security Futures Principal) to trade options must receive a copy of the OCC Options Disclosure Document (ODD) at or before the time the account is approved to trade options. |
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Definition
| • Under FINRA rules, customer accounts must be reviewed periodically. However, discretionary accounts must be reviewed frequently. |
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Definition
| • Under FINRA rules, if a new employer requests a copy of Form U-5 from a new employee, he must provide it within two business days. |
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Definition
| • FINRA rules prohibit analysts and members of their households from investing in a company's securities for 30 days before and 5 days after the analyst issues a research report on the company. |
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Definition
• If a representative is the subject of in-house disciplinary action involving suspension, termination, withholding of commissions, or fines in excess of $2,500, FINRA must be notified within ten business days.
• Firms must provide a customer with a copy within ten business days of receiving a request. If a firm does not have a copy, it must inform the customer of that fact.
• A member firm is required to notify FINRA within ten business days whenever one of its associated persons is the subject of a customer complaint alleging theft, misappropriation of customer assets, or forgery. Furthermore, notification is also required if an associated person becomes the subject of in-house disciplinary action involving suspension, withholding of commissions, or fines in excess of $2,500. |
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Term
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Definition
| • After a leave of absence of more than two years, a registered representative must requalify by examination. When the representative left the old firm, her registration was terminated and the firm filed a Form U-5. When a new firm hires the representative, she must reapply for registration on a Form U-4. There are exceptions for those called up to active military duty. |
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Term
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Definition
| • Decisions reached by the Department of Enforcement become final 30 calendar days after formal issuance, when time has run out for filing an appeal and setting possible redress motion in action. Under the Code of Procedure, the respondent has 25 days from the issue date of the Department of Enforcement's formal decision to file an appeal with the National Adjudicatory Council. This 25-day period runs concurrently with the 30-calendar-day waiting period for the Department of Enforcement's decision to become final. |
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Term
| Within 10 days of first use |
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Definition
| • If a firm plans to offer an investment analysis tool to its customers, it must provide FINRA access to the tool within ten days of first use. Furthermore, the firm must describe the criteria and methodology used |
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Term
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Definition
• An established member must file advertising and sales literature relating to investment companies, government securities, and direct participation programs with FINRA within ten days of first use (postfiling).
• Rule 2711 imposes a quiet period of 40 days for IPOs and ten days for additional issue offerings. |
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Definition
| • A second notice requires a response within 14 days. The notice states that failure to reply allows the hearing officer to enter a default decision (guilty as charged). |
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Definition
• After giving 15 days' written notice, FINRA may suspend or revoke the membership of any member in arrears in the payment of fees, dues, assessments, or other charges. This includes failure to honor an arbitration award.
• Arbitration awards must be paid within 30 days of decision date. If a firm fails to pay within this time period, FINRA may suspend or revoke the firm's membership after giving 15 days' written notice. |
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Term
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Definition
| A prehearing conference must be held within 21 days of the respondent's answer. |
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Term
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Definition
• After receiving a complaint from the Department of Enforcement, a respondent has 25 days to file a response.
• If they are not appealed, Department of Enforcement decisions become final no earlier than 30 days after the written decision is handed down. Appeals must be made within 25 days of the decision date. The exceptions are barring and expulsion, which take effect immediately |
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Term
| Within 25 days of decision date |
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Definition
| • Rule G-37 prohibits contributions to issuer officials by municipal firms, municipal finance professionals (MFPs) employed by the firm, and political action committees controlled by the firm. Contributions of up to $250 per election are permitted. This exemption applies only to MFPs eligible to vote for that official. |
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Term
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Definition
• If a member learns facts that show a Form U-5 filing to be inaccurate, the member must file an amended form within 30 days.
• All monetary awards in a Code of Arbitration decision must be paid within 30 days of the decision date. If payment is not made, the amount of the award begins to accrue interest as of the decision date.
• If Form U-5 is not filed with FINRA within 30 days of a termination date, a late filing fee will be assessed. |
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Term
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Definition
| • FINRA rules prohibit analysts and members of their households from investing in a company's securities for 30 days before and 5 days after the analyst issues a research report on the company. |
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Term
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Definition
• Routine amendments to Form U-4 must be made within 30 days of any change. If the change is not routine (i.e., it might affect a firm's membership), the filing must be done within ten days.
• Arbitration awards must be paid within 30 days of decision date. If a firm fails to pay within this time period, FINRA may suspend or revoke the firm's membership after giving 15 days' written notice. |
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Term
| 30 Days prior to closing date |
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Definition
| • Registrations in the National Do-Not-Call list are maintained for five years. A consumer may reregister her telephone number at any time. Such reregistration begins another five-year registration period. FINRA rules on a firm-specific, Do-Not-Call list mirrors this five-year rule. |
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Term
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Definition
• If they are not appealed, Department of Enforcement decisions become final no earlier than 30 days after the written decision is handed down. Appeals must be made within 25 days of the decision date. The exceptions are barring and expulsion, which take effect immediately.
• Decisions reached by the Department of Enforcement become final 30 calendar days after formal issuance, when time has run out for filing an appeal and setting possible redress motion in action. Under the Code of Procedure, the respondent has 25 days from the issue date of the Department of Enforcement's formal decision to file an appeal with the National Adjudicatory Council. This 25-day period runs concurrently with the 30-calendar-day waiting period for the Department of Enforcement's decision to become final. |
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Term
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Definition
| • Under FINRA rules, any location, other than a primary residence, that is used for less than 30 business days annually for securities business is excluded from the definition of a branch. These locations would generally include vacation or second homes. |
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Term
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Definition
| Rule 2711 imposes a quiet period of 40 days for IPOs and ten days for additional issue offerings |
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Term
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Definition
| • After receiving a statement of claim, a respondent has 45 calendar days to respond to both the director of arbitration and the claimant. |
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Term
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Definition
| A firm has 60 days to secure the equipment and begin recording. |
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Definition
| • If registration as a principal is not made within 90 days of assuming additional duties requiring a Series 24 license, both the individual and the firm become subject to FINRA sanctions. |
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Term
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Definition
• Form G-37 deals with information on political contributions made by dealers and their associated persons and must be filed quarterly.
• Reports to FINRA on telemarketing supervision must be made quarterly. However, if a member firm is required to monitor telephone conversations, it must do so for all of its representatives, not just representatives from disciplined firms. |
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Term
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Definition
| • The regulatory element must be completed within 120 days of the person's second registration anniversary and every three years thereafter. |
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Term
| Within 15 days of the end of each quarter |
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Definition
| • FINRA rules require members to electronically file information on customer complaints within 15 days of the end of each calendar quarter. If the complaint involves allegations of theft, misappropriation of funds or securities, or forgery, the member must immediately (within ten business days) report it to FINRA. |
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Term
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Definition
| • If a qualification exam is failed three consecutive times, a fourth attempt may not be made for six months. |
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Term
| Within the previous 12 months |
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Definition
| • FINRA Rule 4370 requires each member to conduct an annual review of its plan to determine if updates are needed |
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Term
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Definition
| • Making reference to prior recommendations in a research report is permitted as long as all recommendations of the same type made over the prior 12 months are included. A firm cannot be selective in using prior recommendations. |
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Term
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Definition
| • Every member that carries customer accounts must, at least once per calendar year, provide in writing to each customer the following: the Public Disclosure Program hotline, the FINRA Regulation Website address, and a statement as to the availability of an investor brochure that includes information describing the Public Disclosure Program. |
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Term
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Definition
• Under FINRA rules on investor education and protection, carrying firms must advise their customers (including customers of introducing firms that clear through them) of the number for BrokerCheck. This disclosure must be made at least once every calendar year. BrokerCheck allows customers to access information on customer complaints and the disciplinary history of registered persons.
• NASD Rule 3013 requires firms to designate a principal to serve as chief compliance officer (CCO) and to have the CEO certify annually that the firm has processes in place to review, test, and modify its supervisory procedures. The CEO must also conduct one or more meetings with the CCO during the 12 months preceding certification.
• FINRA Rule 4370 requires each member to conduct an annual review of its plan to determine if updates are needed.
• Supervising branch offices, like OSJs, must be inspected at least annually.
• A supervising branch must be inspected at least annually, while a nonsupervisory branch must be inspected at least once every three years.
• The firm element of continuing education must be completed each year by all registered persons who have direct contact with the public. |
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Term
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Definition
| • For two years after a registered representative leaves the industry, reaffiliation with a member firm can be done without retaking the licensing exam. In addition, FINRA retains jurisdiction for the two-year period following termination. Thus, if the person becomes the subject of an arbitration hearing, on the record interview or disciplinary action the person is still subject to FINRA rules. The SEC on the other hand may impose sanctions for criminal activity such as fraud for as long as the law permits. |
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Term
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Definition
• Once called into military service, a person is placed in a specially designated inactive status. In addition, the two-year license expiration period will be tolled beginning on the date that the person enters active military service and will end 90 days after completion of active service. All of the other statements are true.
• After a leave of absence of more than two years, a registered representative must requalify by examination. When the representative left the old firm, her registration was terminated and the firm filed a Form U-5. When a new firm hires the representative, she must reapply for registration on a Form U-4. There are exceptions for those called up to active military duty. |
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Term
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Definition
• If a member is required to record the telephone conversations of all of its registered representatives because it has too many representatives who were previously associated with disciplined firms, it must do so for a period of three years. It also must make quarterly reports to FINRA on its telemarketing supervision.
• Nonsupervisory branch offices must be inspected at least once every three years by an arm's-length supervisor.
• A supervising branch must be inspected at least annually, while a nonsupervisory branch must be inspected at least once every three years. |
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Term
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Definition
• Any ad which contains bond fund volatility ratings must be pre-filed with FINRA. Also, advertising copy must be retained for 3 years after last use.
• Like other forms of communication with the public, copies of IM traffic must be retained for three years. Members are permitted to use IM as long as they have software in place to monitor, capture, and retrieve message traffic. |
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Term
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Definition
| • According to FINRA Rule 4513 that went into effect December 2011 written customer complaints and any correspondence related to the complaints must be kept for four years. |
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Term
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Definition
| • Registrations in the National Do-Not-Call list are maintained for five years. A consumer may reregister her telephone number at any time. Such reregistration begins another five-year registration period. FINRA rules on a firm-specific, Do-Not-Call list mirrors this five-year rule. |
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Term
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Definition
• Simplified arbitration is available only for claims of $25,000 or less. The statute of limitations for filing a claim is six years from the event giving rise to the claim.
• Under the Code of Arbitration Procedure, a dispute or claim is eligible for submission to arbitration up to six years after the date of the dispute's occurrence. |
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Term
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Definition
| • Conviction within the past ten years for any felony or securities-/money-related misdemeanor is a statutory disqualification of an applicant for registration with a FINRA member firm. |
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Term
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Definition
| • By April 1 of each year, each member firm must attest to FINRA that it has adopted and implemented procedures to be in compliance with the research analyst conflict of interest rules |
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Term
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Definition
| • Under Regulation AC, an analysis of individual securities prepared for a specific person or a limited group of fewer than 15 persons is not considered a research report. |
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Term
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Definition
| • Excluded from the definition of a branch office is any location used primarily for non-securities business (e.g., insurance sales) and from which less than 25 securities transactions are effected annually. A location of convenience is any location used occasionally and by appointment |
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Term
| 2 Public arbitrators and 1 non-public |
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Definition
| • Unless the parties to the dispute agree to a different panel composition, all disputes, specifically between member firms and associated persons in which the claim exceeds $100,000, will be heard by a panel of three arbitrators one of which is non-public. |
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Term
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Definition
| • A firm with 20 or more registered persons will be subject to the taping rule if 20% or more of these persons have been employed by disciplined firms within the past three years. |
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Term
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Definition
• The special deals interpretation prohibits a mutual fund sponsor from giving gifts exceeding $100 in value per year to a registered representative who does not work for his firm or to a customer.
• The Conduct Rules place restrictions on the gift-giving activities of registered personnel. Specifically, an employee of one member firm may give gifts up to $100 every 12 months to a registered representative of another member firm. This is designed to prevent employees of different broker/dealers from working together in a way that would be detrimental to the investing public. Notification to or approval by FINRA or the receiving registered representative's firm is not required. |
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Term
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Definition
• Rule G-37 allows $250 per election, meaning the MFP may contribute an additional $250 for the general election. A firm's contribution to the election of a municipal official will always trigger a two-year bar from the municipality's underwriting activity. The $250 de minimis contribution is a safe harbor available only to MFPs.
• Rule G-37 prohibits contributions to issuer officials by municipal firms, municipal finance professionals (MFPs) employed by the firm, and political action committees controlled by the firm. Contributions of up to $250 per election are permitted. This exemption applies only to MFPs eligible to vote for that official. |
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Term
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Definition
| According to the Code of Procedure, the maximum fine for a minor rule violation is $2,500. |
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Term
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Definition
| • Members must file notice with FINRA to report securities- or commodities-related judgments, awards, or settlements of $15,000 or more against individuals, or $25,000 or more against member firms. |
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Term
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Definition
| • Simplified arbitration is available only for claims of $25,000 or less. The statute of limitations for filing a claim is six years from the event giving rise to the claim |
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Term
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Definition
| • Members must file notice with FINRA to report securities- or commodities-related judgments, awards, or settlements of $15,000 or more against individuals, or $25,000 or more against member firms. |
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