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Wiley FINRA Series 26 Exam Review 2017: The Investment Company and Variable Contracts Products Principal Examination

Wiley FINRA Series 26 Exam Review 2017: The Investment Company and Variable Contracts Products Principal Examination

Wiley

ISBN: 978-1-119-40324-1

Feb 2017

348 pages

$88.99

Description

The go-to guide to acing the Series 26 Exam!

Passing the Investment Company Products/Variable Contracts Limited Principal Qualification Exam (Series 26) qualifies an individual to operate as a principal responsible for supervising and managing a firm and its agents conducting business in open-end mutual funds, variable annuities, and life insurance. The exam covers hiring and qualification, training of representatives, supervision, sales practices, and business processing and recordkeeping rules. A principal must have passed the Series 6 or Series 7 Exams prior to taking the Series 26.

Created by the experts at The Securities Institute of America, Inc., Wiley Series 26 Exam Review 2017 arms you with everything you need to pass this long 110-question multiple-choice test. Designed to help you build and fine-tune your knowledge of all areas covered in the exam and to guarantee that you're prepared mentally and strategically to take the test, it provides:

  • Dozens of examples
  • Assorted practice questions for each subject area covered in the exam
  • Priceless test-taking tips and strategies
  • Helpful hints on how to study for the test, manage stress, and stay focused

Wiley Series 26 Exam Review 2017 is your ticket to passing the Series 26 test on the first try—with flying colors!

About the Series 26 Exam xi

About This Book xv

About the Test Bank xvii

About the Securities Institute of America xix

Chapter 1 Brokerage Office Procedures 1

Hiring New Employees 1

Resignation of a Registered Representative 3

Registration Exemptions 4

Persons Ineligible to Register 4

Disciplinary Actions against a Registered Representative 5

Termination for Cause 6

Outside Employment 7

Private Securities Transactions 7

Gift Rule 7

Sharing in a Customer’s Account 8

Borrowing and Lending Money 9

Order Tickets 9

Executing an Order 9

Becoming a Stockholder 11

Close Outs 15

Dividend Distribution 21

Pretest 25

Chapter 2 Record Keeping, Financial Requirements, and Reporting 29

Types of Records 29

Storage Requirements 31

Financial Requirements 35

Pretest 49

Chapter 3 Recommendations to Customers 55

General Guidelines 55

Suitability Standards 56

Mutual Fund Suitability 57

Exchange-Traded Funds (ETFs) 61

Periodic Payment Plans 63

Mutual Fund Current Yield 63

Suitability 63

Fair Dealings with Customers 63

Recommendations to an Institutional Customer 67

Short Sales in Connection with Recommendations 68

Issuing Research Reports 68

Regulation FD (Fair Disclosure) 71

Recommendations through Social Media 71

Pretest 75

Chapter 4 General Supervision 79

The Role of the Principal 79

Supervisor Qualifications and Prerequisites 80

Continuing Education 81

Tape Recording Employees 83

Heightened Supervisory Requirements 83

Information Obtained from an Issuer 84

Customer Complaints 84

Investor Information 85

Member Offices 85

Currency Transactions 88

The Patriot Act 88

Identity Theft 90

Pretest 91

Chapter 5 Customer Accounts 95

New Accounts 95

Holding Securities 97

The Depository Trust Company (DTC) 98

Mailing Instructions 99

Types of Account Ownership 99

Trading Authorization 101

Accounts for Employees of Other Broker Dealers 106

Numbered Accounts 106

Prime Brokerage Accounts 107

Account Transfer 107

Margin Accounts 109

Day Trading Accounts 110

Commingling Customers’ Pledged Securities 111

Wrap Accounts 111

Regulation S-P 111

Pretest 113

Chapter 6 Investment Companies 117

Investment Company Philosophy 117

Types of Investment Companies 118

Investment Company Registration 121

Investment Company Components 123

Mutual Fund Distribution 125

Mutual Fund Prospectus 126

Anti-Reciprocal Rule 129

Valuing Mutual Fund Shares 129

Sales Charges 131

Taxation of Mutual Funds 138

Voting Rights 143

Yields 143

Portfolio Turnover 144

Purchasing Mutual Fund Shares 144

Withdrawal Plans 147

Recommending Mutual Funds 148

Structured Retail Products/SRPs 149

Pretest 151

Chapter 7 Variable Annuities, Life Insurance, and Retirement Plans 155

Annuities 155

Life Insurance 165

Health Savings Accounts 171

Retirement Plans 172

Death of an IRA Owner 177

ERISA 404C Safe Harbor 185

Department of Labor Fiduciary Rules 185

Pretest 187

Chapter 8 Securities Industry Rules and Regulations 191

Issuing Securities 191

The Securities Exchange Act of 1934 194

The National Association of Securities Dealers (NASD) 197

Becoming a Member of FINRA 199

Foreign Broker Dealers 201

Compensation Paid to Unregistered Persons 201

Registration of Agents/Associated Persons 202

Retiring Representatives/Continuing Commissions 203

State Registration 203

Communications with the Public 203

Securities Investor Protection Corporation Act of 1970 (SIPC) 209

The Securities Acts Amendments of 1975 211

The Insider Trading & Securities Fraud Enforcement Act of 1988 211

Telemarketing Rules 212

The Penny Stock Cold Call Rule 213

Violations and Complaints 214

Political Contributions 218

Investment Adviser Registration 219

Investment Adviser Representatives 221

Investment Adviser Advertising and Sales Literature 222

Investment Adviser Brochure Delivery 223

Soft Dollars 223

Broker Dealers on the Premises of Other Financial Institutions 225

The Uniform Securities Act 226

Sarbanes-Oxley Act 226

SEC Regulation S-K 228

SEC Regulation M-A 229

The Hart-Scott-Rodino Act 230

FINRA Rule 5150 (Fairness Opinion) 231

SEC Regulation S-X 231

Pretest 233

Answer Keys 237

Glossary of Exam Terms 245

Index 311