- A. One registers with a federal commission like the SEC or CFTC; one joins an industry association like the NFA.
- B. An AP needs three years in the field to handle discretionary accounts, and may require further licensure to supervise.
- D. The others are false.
- C. Not all testimonials are necessarily paid testimonials.
- D. Compliance directors initiate investigations. MRAs and offers to settle bypass the hearing process. Although arbitration cannot be appealed, disciplinary hearings can.
- B. The broker/dealer must apply to offer security futures through the process of notice registration with the CFTC, unless that broker/dealer is fully registered with both the CFTC and the SEC in which case it may offer a full range of both futures and securities products.
- C. A series 24 is a FINRA general securities principal, a 53 is a municipal fund securities principal (for brokerage firms that write 529 plan (a municipal fund security) business and a Series 3 is the license for an associated person who holds no supervisory capability).
- 3. The other three organizations are federal agencies that regulate futures, securities and banks.
- A. CFTC requires segregation of accounts from firm assets. By contrast, SIPC rules protect account values up to specific thresholds, with differing limits for cash and securities.
Facing Your Fears
Financial AdvisorFind out the history of FINRA, and how it's organized to monitor the markets and protect investors.
Financial AdvisorMoney invested in a brokerage account has some protection, but that doesn't mean you can't lose it.
Financial AdvisorLaunching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
Financial AdvisorClients love planners who sell securities, but a securities license takes a lot of work. Learn if the stress and study are worth it.
InsightsWhile there is nothing much that can be done against the market volatility, there is a protection mechanism in place in case the broker firm runs into a financial trouble.
Financial AdvisorTo become a registered investment advisor requires specific licensing, qualifications and regulations, but the greater freedom may be worth it.
InvestingThe SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.
Financial AdvisorFind out what to do if you have a dispute with your broker.
Financial AdvisorFind out which exam you need to begin your career as an investment professional.
Financial AdvisorIf your account has been mishandled, FINRA and the SEC are among several organizations that can help.