Wiley Series 26 Securities Licensing Exam Review 2020 + Test Bank The Investment Company and Variable Contracts Products Principal Examination

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 2020 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

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 77

Chapter 4 General Supervision 81

The Role of the Principal 81

Supervisor Qualifications and Prerequisites 82

Continuing Education 83

Tape Recording Employees 85

Heightened Supervisory Requirements 85

Information Obtained from an Issuer 86

Customer Complaints 86

Investor Information 87

Member Offices 87

Currency Transactions 90

The Patriot Act 90

Identity Theft 92

FINRA Rules on Financial Exploitation of Seniors 93

Pretest 95

Chapter 5 Customer Accounts 99

New Accounts 99

Holding Securities 101

The Depository Trust Company (DTC) 102

Mailing Instructions 103

Types of Account Ownership 103

Trading Authorization 105

ABLE Accounts 110

Accounts for Employees of Other Broker Dealers 111

Numbered Accounts 112

Prime Brokerage Accounts 112

Account Transfer 112

Margin Accounts 114

Day Trading Accounts 115

Commingling Customers’ Pledged Securities 116

Wrap Accounts 116

Regulation S-P 116

Pretest 119

Chapter 6 Investment Companies 123

Investment Company Philosophy 123

Types of Investment Companies 124

Investment Company Registration 127

Investment Company Components 129

Mutual Fund Distribution 131

Mutual Fund Prospectus 132

Anti-Reciprocal Rule 135

Valuing Mutual Fund Shares 135

Sales Charges 137

Taxation of Mutual Funds 144

Voting Rights 149

Yields 149

Portfolio Turnover 150

Purchasing Mutual Fund Shares 150

Withdrawal Plans 153

Recommending Mutual Funds 154

Structured Retail Products/SRPs 155

Pretest 157

Chapter 7 Variable Annuities, Life Insurance, and Retirement Plans 161

Annuities 161

Life Insurance 171

Health Savings Accounts 177

Retirement Plans 178

Death of an IRA Owner 183

ERISA 404C Safe Harbor 191

Department of Labor Fiduciary Rules 191

Pretest 193

Chapter 8 Securities Industry Rules and Regulations 197

Issuing Securities 197

The Securities Exchange Act of 1934 200

The National Association of Securities Dealers (NASD) 203

Becoming a Member of FINRA 205

Foreign Broker Dealers 207

Compensation Paid to Unregistered Persons 207

Registration of Agents/Associated Persons 208

Retiring Representatives/Continuing Commissions 209

State Registration 209

Communications with the Public 209

Securities Investor Protection Corporation Act of 1970 (SIPC) 215

The Securities Acts Amendments of 1975 217

The Insider Trading & Securities Fraud Enforcement Act of 1988 217

Telemarketing Rules 218

The Penny Stock Cold Call Rule 219

Violations and Complaints 220

Political Contributions 224

Investment Adviser Registration 225

Investment Adviser Representatives 227

Investment Adviser Advertising and Sales Literature 228

Investment Adviser Brochure Delivery 229

Soft Dollars 229

Broker Dealers on the Premises of Other Financial Institutions 231

The Uniform Securities Act 232

Sarbanes-Oxley Act 232

SEC Regulation S-K 234

SEC Regulation M-A 235

The Hart-Scott-Rodino Act 236

FINRA Rule 5150 (Fairness Opinion) 237

SEC Regulation S-X 237

Pretest 239

Answer Keys 243

Glossary of Exam Terms 251

Index 317

The Securities Institute of America, Inc. has an 18 year track record for excellence in securities exam training. Jeffrey Van Blarcom author from The Securities Institute of America, Inc. helps thousands of securities and insurance professionals build successful careers in the financial services industry every year Learn more at : https://securitiesce.com

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