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Guidelines for the practices that a brokerage firm uses to conduct the operation of its daily business are regulated by industry, state, and federal regulators. These guidelines are the foundation for the way that the firm handles all business, from hiring a new agent to executing a customer’s order. All Series 10 candidates must have a full understanding of a brokerage firm’s operations and procedures to successfully complete the exam.
A registered principal of a firm will be the individual who interviews and screens potential new employees. They will be required to make a thorough investigation into the candidate’s professional and personal backgrounds. With few exceptions, other than clerical personnel, all new employees will be required to become registered as an associated person with the firm. Additionally, all employees of theRead more
All broker dealers are required to prepare and maintain reports and records according to industry regulations. The content and timing of the reports depends on the nature of the report. SEC Rule 17 a-3 sets forth the requirements for broker dealer reporting, timing, and content. SEC Rule 17 a-4 sets the retention requirements for those records. Records subject to these rules must be maintained anywhere from three years to the life of the firm. Records that are required to be maintained must be readily accessible for the first two years.
Under SEC Rule 17a-3 a significant number of records must be filed and maintained by broker dealers. The following is a list of those records and their definitions:Read more
The Municipal Securities Rule Making Board or the MSRB is the organization responsible for overseeing the municipal securities industry. The MSRB has no enforcement arm and its only function is to write rules and test questions. As a result, the Series 10 exam will contain a number of questions relating to municipal securities.
State and local governments will issue municipal bonds in order to help the local governments meet their financial needs. Most municipal bonds are considered to be almost as safe as Treasury securities issued by the federal government. However, unlike the federal government, from time to time an issuer of municipal securities does default. The degree of safety varies from state to state and from municipality to municipality. Municipal securities may be issued by:Read more
If a registered representative wants to obtain employment outside of their position with a member firm, the registered representative must first provide written notification to the employing member firm. The member firm may reject or limit the representative’s outside employment. Exceptions to this rule are if the registered representative is a passive investor in a business or if the representative owns rental property. All other outside business activities must be disclosed to the member firm. If the member is a NYSE member, they must provide the representative with prior written approval before the representative engages in any outside activity.Read more