Series 99 Glossary

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  1. What is a 403(b) Plan?
    A tax-deferred retirement plan that may only be established by certain nonprofit organizations such as churches and public school systems.
  2. What is a 501(c)(3)?
    A section of the Internal Revenue Code that provides tax-exempt status to certain organizations. Such organizations may also set up a 403(b) Plan for their employees.
  3. Accretion
    A method of adjusting a taxpayer's cost basis of a bond bought at an original issue discount. the annual accretion is treated as interest for tax purposes.
  4. Annuitant
    An investor who receives fixed or variable annuity payments.
  5. Assumed Interest Rate (AIR)
    Rate of growth built into an annuity table which determines payout on a variable annuity.
  6. Banker's Acceptance (BA)
    A Money-market instrument used to finance international and domestic trade. It is a check drawnon a bank by an importer or exporter of goods representing the bank's unconditional promise to pay the face amount of the note at maturity.
  7. Block - how many shares?
    A large holding or transactionof stock (popularly considered to be 10,000 shares or more).
  8. Breakpoint
    The dollar level of an investment in a mutual fund at which a purchaser qualifies for a sales charge reduction.
  9. Breakpoint Sales
    Solicited sales at dollar amounts just below the point where a breakpoint (reduced sales charges) would occur. A breakpoint sale is a violation of FINRA rules.
  10. Capital Market
    That segment of the securities market that deals in instruments with more than one year to maturity, e.g., long term debt and equity securities.
  11. Commingling
    The mixing of client owned securities or money with that owned by the broker-dealer. This is illegal.
  12. Continuous Net Settlement
    The process by which a previous day's fail positions are included in the next day's settlement.
  13. Covenant
    A protective clause in a bond's indenture.
  14. Currency Transaction Reports (CTRs)
    The form 4789 that is required to be filed for daily customer cash transactions the cummulatively exceed $10,000.
  15. Dated Date
    The date from which interest begins accuring on a newly issued bond.
  16. Deficency Letter
    A notice sent by the SEC to the issuer of a new issue regarding omissions of material fact in the registration statement.
  17. ERISA
    The federal law (Employees Retirement Income Security Act) that regulates private sector pensions and retirement plans.
  18. FDIC
    Federal Deposit Insurance Corporation: A federally sponsored, privately held corporation the insures commercial bank deposits of up to $100,000.
  19. FICC
    Fixed Income Clearing Corporation: a subsidiary of DTCC.
  20. Form U4
    The FINRA uniform application for securities industry registration or transfer.
  21. Form U5
    The FINRA uniform termination notice for securities industry registration.
  22. Who is Ginnie Mae
    The Government National Mortgage Association.
  23. Hypothecation
    The pledging of securities as collateral, for example, to secure the debit balance in a margin account.
  24. Indenture
    A written agreement under which bonds are inssued, setting forth the maturity date, interest rate, and other terms.
  25. How much can an individual contribute to an IRA per year?
  26. Interest-Rate Risk
    The risk that a fixed income security will decrease in value should interest rates rise. Note: I would say I have an interest rate risk with HIO
  27. Interpositioning
    The placing of a third party between a broker dealer and its customer when filling a trade. This practice is prohibited unless it results in a better execution for the customer.
  28. Investment Grade
    Refers to bonds rated in the top four rating categories by Moody's (Baa or higher) or Standard & Poors (BBB or higher) that are eligible for investment by fiduciaries.
  29. What is the IRA Rollover time period?
    60 days
  30. Keogh Plan (HR-10 Plan)
    A qualified retirement plan that may be established by self-employed individuals for themselves and any qualified employees.
  31. What is the time period for LEAPS (Long-Term Equity Anticipation Securities)?
    Long-term call and put equity options with expirations of up to thirty nine months.
  32. The current Minimum Maintenance Rquirements are...
    25% for long positions and 30% for short positions.
  33. Municipal Securities Rulemaking Board (MSRB)
    The self-regulatory organization of the municipal securities industry. Created in 1975, it has primary responsibility for the development of rules and regulations to govern the activities of municipal securities dealers.
  34. Net Asset Value (NAV)
    The market value of an Investment Company's portfolio less any prorated expenses.
  35. What does NOBO stand for?
    Non-Objecting Beneficail Owner. This is when the identity of the beneficial owner of a security held in street name is disclosed to the issuer of that security.
  36. Nonexempt Securities
    Securities (generally corporate) that are subject to the filing requirements of the Securities Act of 1933 and the provisions of the other federal securities acts (vs. Exempt).
  37. What does ODO stanf for?
    Objecting Beneficial Owner. This is when the identitiy of the beneficial owner of a security held in street name is not disclosed to the issuer of that security.
  38. Official Statement
    A disclosure document prepared for a new municipal issue by or for the issuer. MSRB rules require that a copy of the official statement be given to eash purchaser of a new issue, if one has been prepared.
  39. Par Value
    The face value or principal value of a bond, typically $1,000 per bond.
  40. Phantom Income
    Noncash income on which taxes must be paid. For example, accreted interest on an Orginal Issue Discount (OID) corporate or US Treasury bond is considered phantom income.
  41. Purchaser Representative
    A person experienced in financial and business matters who represents or advises a nonaccredited investor in a Regulation D offering (Private Placement, Restricted Stock, Lettered Stock, Legended Stock)
  42. Qualified Instituational Buyer (QIB)
    An institutional investor that meets the financial and other standards required to participate as a purchaser in a Rule 144A transaction.
  43. Registrar
    Usually a trust company or bank charged with the responsibility of auditing the firm's transfer agent and keeping a record of the owners of a coporation's securities to prevent the issuance of more than the authorized number of shares.
  44. Suspicious Activity Report (SAR)
    A report that must be files whenever a firm suspects that transactions in excess of $5,000 may be related to illegal activities.
  45. What daoes SAR stand for?
    Suspicious Activity Report
  46. Rule 405 (NYSE Rule) is what rule?
    The NYSE Know Your Customer Rule.
  47. Sallie Mae is... ?
    The Student Loan Marketing Association.
  48. Securites Act Of 1933
    The federal law that covers new issues of securities. It provides for full disclosure of pertinent information relating to the new issue and also contains antifraud provisions.
  49. Securities Exchange Act Of 1934
    The federal law the regulates broker-dealers and secondary market securities transactions.
  50. Securities Investor Protection Corporation (SIPC)
    A nonprofit membership corporation created by an act of Congress to protect clients of brokerage firsm that are forced into bankruptcy. Memebrship is composed of all brokers and dealers registered under the Securities Exchange Act of 1934, all members of national securities exchanges, and most FINRA members.
  51. Simplified Employee Pension (SEP)
    A type of pension plan the combines a corporate pension plan and an IRA. Under a SEP, the employer makes contributions to the employee's IRA.
  52. Treasuries Bills (T-Bills)
    Short-term obligations of the US government. They have 4 week, 13 week, and 26 week maturities. they are purchased at a discount and mature at face value. The difference between the purchase price and maturity value (the amount of the discount) is considered interest.
  53. Treasury Bonds
    US government obligations with original maturities of more than 10 years.
  54. Treasury Notes
    US government obligations with orginal maturities of more than one year up to 10 years.
  55. Treasury Stock
    Stock issued by a company but later reacquired. Treasury stock received no dividends and doen not carry voting rights while held by the company. Despite the name - this is not related to US government obligations.
  56. Wash Sale
    A sale of securities at a loss with the subsequent disallowance of the loss by the IRA. If an individual sells a security at a loss and, within 30 days, repurchases substantially the same security, the IRS will consider it a wash sale and will disallow the loss.
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Series 99 Glossary
Review items in the glossary I was not familiar with.
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