Q:
When a broker-dealer has decided to provide its registered representatives with reprints from a magazine article, which gives a highly-favorable rating to a mutual fund and these are to be used along with a prospectus in sales presentations, these materials:
   
A) Must be approved by a principal of the firm prior to use.
B) Require no approval because they are from an outside, authoritative publication.
C) Must be filed with the NASD and approved 5 days before first use.
D) Must be approved by the SEC prior to first use.
A:
The correct answer is A)
All sales literature, specifically including reprints, must be approved by a principal of the firm prior to use. The SEC does not approve or disapprove. The choice stating that these materials "must be filed with the NASD and approved 5 days before first use", is incorrect as to the approval and the number of days.

MORE FAQS

  1. A registered representative has discovered an article in a major news magazine that makes statements ...

  2. Which of the following would be considered “sales literature” under the NASD’s definition ...

  3. Do financial advisors need to be approved by FINRA?

  4. The “effective date” is defined as:

  5. A sales representative solicits and executes a mutual fund trade ...

  6. Under the Uniform Securities Act, which of the following actions is permitted for a registered sales ...

  7. How is a penny stock created?

  8. A hypothecation agreement allows a broker-dealer to

  9. How do I know if I am buying unregistered securities or stocks?

  10. When an agent of a broker-dealer begins employment with another broker-dealer ...

  11. Which of the following, under the NASD Conduct Rules, would constitute a complaint ...

  12. What information does the SEC require in an investment company's prospectus?

  13. When is it acceptable for a broker to commingle funds with a client?

  14. Do I have to reach a certain age before I can write an NASD exam?

  15. What are unregistered securities or stocks?

  16. A market maker in the stock ABCD has filled a portfolio over time with prices as low as $2 per share ...

  17. Under the Investment Company Act of 1940, an investment company must have minimum net assets of how much before it can issue shares to the public?

  18. ABC Broker-dealer has no office in state and transacts fewer than five trades during a 12-month period

  19. What are the responsibilities of the principal in a company?

  20. My job with a member firm has recently been terminated and I do not want to write all of my securities exams again. How do I prevent my licenses from expiring?

RELATED FAQS

  1. A registered representative has discovered an article in a major news magazine that ...

    The correct answer is c. The use of magazines, as well as reprints, falls under the NASD rules regarding communications with ...
  2. Which of the following would be considered “sales literature” under the NASD’s definition ...

    The correct answer is d. Advertising is material created by a broker-dealer for use with the public, where the firm cannot ...
  3. Do financial advisors need to be approved by FINRA?

    Learn about whether a financial advisor may be required to be approved by FINRA, and what exams a financial advisor needs ...
  4. The “effective date” is defined as:

    a. the date a security's registration is approved - lasting for one year. b. the date the first transaction of an approved ...
  5. A sales representative solicits and executes a mutual fund trade ...

    The correct answer is c). This would be considered a private securities transaction, which is not permitted. All securities ...
  6. Under the Uniform Securities Act, which of the following actions is permitted for ...

    The correct answer is d). A sales representative may not make trades in a state unless both the sales representative and ...
RELATED TERMS
  1. Registered Principal

    A licensed securities dealer who is also empowered to oversee ...
  2. Approved Participants

    Institutional investors who are allowed direct access to an exchange's ...
  3. Negative Authorization

    A credit card approval system that compares a credit card number ...
  4. With Approved Credit - WAC

    A condition requiring a purchaser using financing to have adequate ...
  5. Approved List

    A list of pre-selected securities that are deemed fit for purchase ...
  6. Friendly Takeover

    A situation in which a target company's management and board ...

You May Also Like

Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center