FINANCIAL ANALYSIS DESKTOP UND MOBILE LÖSUNG Thomson Reuters Eikon bietet Ihnen einen einfachen Zugang zu vertrauenswürdigen Nachrichten, Daten und Analysen, die alle auf Ihre Bedürfnisse abgestimmt sind und in einer sehr visuellen Weise dargestellt werden, die leicht zu erfassen und zu handeln ist . Von der gleichen intuitiven Desktop-oder mobilen Gerät, können Sie sofort eine Verbindung zu neuen und aufstrebenden Märkten, tief und abwechslungsreich Pools von Liquidität, professionelle Netzwerke und kompetente Unterstützung überall und zu jeder Zeit. Das Ergebnis Umfassende Finanzanalyse, durch die Sie mehr Chancen entdecken und entscheidende Entscheidungen mit Vertrauen treffen. Eikon Überblick (1:36) Erfahren Sie die volle Stärke von Reuters news (1:37) Serie 7 Flashkarten DVP COD RVP POA Händler liefert DVP. Händler erhält RVP. DVP (Lieferung gegen Zahlung) und COD (Nachnahme) sind allgemeine Akronyme, die verwendet werden, um eine Beziehung zu beschreiben, in der ein Klient eine Bank benutzt, um Geschäfte mit ausführenden Firmen zu regeln. Die Firma liefert Sicherheiten gegen die Bankzahlung und zahlt gegen die Banküberlassung von Wertpapieren. Bei der Erörterung einer gegebenen Transaktion tritt ein DVP auf, wenn der Händler Wertpapiere an die Bank gegen Barzahlung von der Bank liefert. Ein RVP (Empfangen gegen Zahlung) tritt auf, wenn der Händler Wertpapiere von der Bank erhält und eine Barzahlung an die Bank leistet. Die Transaktion, in der die Bank des Kunden Wertpapiere gegen Zahlung durch den Makler-Händler liefert. Es ist wichtig, sich daran zu erinnern, dass Kunden (in der Regel Institutionen) Broker-Konten eingerichtet und Bestellungen an diesen Firmen. Die Abwicklung erfolgt jedoch durch die von den Kunden designierten Depotbanken. Der Broker-Dealer wird Zahlungen senden oder Wertpapiere im Namen der Kunden erhalten. Der Broker-Dealer wird nicht halten die Client-Fonds oder Wertpapiere. SIPC kann von der US-Regierung zu leihen, aber es ist nicht eine Agentur der US-Regierung. SIPC bietet Versicherungsschutz für Kunden-Konten im Falle einer Maklerfirma039s Ausfall. Jede Brokerfirma muss eine gesonderte Versicherung abschließen (bekannt als Treueanleihe), um sich für Betrug, Unterschlagung und Fälschung zu versichern. Diese Bindung wird nicht durch die SIPC bereitgestellt. Wertpapiergesetz von 1933 Die Registrierungsvorschrift des Gesetzes von 1933 gilt, wenn Wertpapiere an der NYSE oder Nasdaq notiert sind, gelten jedoch nicht für Wertpapiere, die von einer Gemeinde ausgegeben werden. Die Anti-Betrug-Bestimmungen des Securities Act von 1933 gelten für alle Wertpapiere, auch diejenigen, die von der Registrierung ausgenommen sind. Das Underwriting-Konsortium verpflichtet sich dem Emittenten, das gesamte Angebot zu erwerben. Wenn das Syndikat das Angebot nicht zum Börsenpreis weiterverkaufen kann, kann es einen Verlust erleiden. Während die verkaufende Gruppe auch an dem Verkauf der neuen Ausgabe teilnimmt, führt sie nicht das Risiko von Verlusten, wenn die Wertpapiere nicht verkaufen. In Bezug auf die Wahl (c) hat ein Kunde, der einen Hinweis auf Zinsen gibt, keinerlei Verpflichtung. Eine Klausel in einer Zeichnungsvereinbarung, die es dem Syndikat gestattet, mehr von einer Emission zu verkaufen, als ursprünglich verfügbar war, und diese Aktien von der Emittentin zu erwerben, wird als Greenshoe-Klausel bezeichnet. Diese Klausel ist in der Angebotsanforderung039s zu finden und ist auf 15 des Angebots begrenzt. Grüne Schuhklausel Überzeichnet Bestimmte Neuemissionen können aufgrund der Wachstumsaussichten unterbewertet und gefragt sein. Regel 144 Restricted Stock Regel 144 befasst sich mit dem Verkauf von Restricted Stock und Affiliate (Kontrolle) Lager. DARSTELLUNGSVORAUSSETZUNGEN: Eine natürliche Person, die Wertpapiere verkaufen möchte, muss die SEC bei Einreichung des Formulars 144 zu dem Zeitpunkt, an dem sie den Auftrag erteilt, beim Broker-Händler benachrichtigen. Eingeschränkte Bestände sind Bestände, die nicht registriert sind und üblicherweise durch eine Privatperson durch eine Privatplatzierung erworben werden. Kontrollbestand ist ein registrierter Bestand, der von einer verbundenen (Kontroll-) Person im Sekundärmarkt erworben wird. Es gibt bestimmte Haltedauer 6 Monate, bevor er über sie verfügen kann, nachdem sie Wertpapiere gekauft werden. 1. Die vorgeschriebene Haltedauer muss eingehalten werden. Muss den Bestand für 6 Monate halten, bevor er über sie verfügen kann. 2. Für die Öffentlichkeit gibt es eine ausreichende Menge aktueller Informationen über die historische Wertentwicklung des Wertpapiers. Der zu veräußernde Betrag beträgt weniger als 1 der im Umlauf befindlichen Aktien und macht weniger als 1 der ausgegebenen Aktien aus und macht weniger als 1% des durchschnittlichen Handelsvolumens der letzten vier Wochen039 aus. 4. Alle für den Handel geltenden Handelsbedingungen sind erfüllt. 5. Wenn Sie mehr als 500 Aktien oder einen Betrag von mehr als 10.000 verkaufen möchten, muss der Verkäufer vor der Veräußerung ein Formular bei der SEC einreichen. Die Makler können beschränkte, nicht registrierte und kontrollierte Wertpapiere verkaufen, jedoch nur auf Basis von 039agency039. Sie können sie verkaufen, aber can039t erbitten einen Kaufauftrag. Wenn der Verkäufer nicht mit dem Unternehmen verbunden ist, das die Aktien ausgegeben hat und die Wertpapiere seit mehr als zwei Jahren besitzt, muss der Verkäufer keine der fünf Bedingungen erfüllen und die Wertpapiere wie jeder andere verkaufen. Standby-Vereinbarung / Underwriting Wenn ein Unternehmen wünscht, zusätzliche Aktien an die Öffentlichkeit zu verkaufen, wird es manchmal tun, unter einem Vorbehalt Rechte-Angebot. Dabei wird den Aktionären die Möglichkeit eingeräumt, die neue Emissionssicherheit vor der Öffentlichkeit zu erwerben. Ein Aktionär kann die Rechte ausüben oder verkaufen. Im Rahmen einer Standby-Underwriting-Vereinbarung stimmt das Syndikat (gegen Gebühr) den Käufern der Rechte nicht zu, die Aktie zu zeichnen, der Investmentbanker kauft die restlichen Anteile feste Verpflichtungen ein. Eine Art Underwriting, bei dem der Underwriter bereit ist, alle Aktien zu kaufen, die nicht in einem Bezugsrecht gezeichnet werden, ist ein Underwriting. Die Emittentin stellt fest, dass viele Aktionäre nicht an den Rechten teilnehmen werden. Verordnung D - Eine Verordnung über die Wertpapier - und Börsenkommission (SEC), die die Befreiung von Privatplatzierungen regelt. Reg D erlaubt es gewöhnlich kleineren Unternehmen, Kapital durch den Verkauf von Aktien oder Schuldtiteln zu erwerben, ohne ihre Wertpapiere bei der SEC registrieren zu müssen. Rote D-Angebote sind für jede Privatfirma oder Unternehmer vorteilhaft, weil sie es einem Unternehmen ermöglichen, die Finanzierung schneller zu erhalten und die mit einem öffentlichen Angebot verbundenen Kosten zu vermeiden. Auch wenn es sich bei den Transaktionen nur um ein oder zwei Anleger handelt, muss das Unternehmen oder der Unternehmer, der Kapital aufbringen will, noch die entsprechenden Rahmenbedingungen und Offenlegungsdokumente anbieten, diese Anforderungen liegen jedoch deutlich unter dem, was für ein öffentliches Angebot erforderlich ist. Regel 147 - ist eine Regel, die von einem Unternehmen genutzt werden kann, um Mittel zu beschaffen, ohne sich tatsächlich bei der Securities and Exchange Commission (SEC) registrieren zu lassen. Diese Regel gilt in der Regel nur für kleine Unternehmen, die eine kleine Menge an Geld zu erhöhen, ohne die teuren Gebühren im Zusammenhang mit der Registrierung mit der SEC. Genauer gesagt, gilt diese Regel für den Abschnitt 3 (a) 11 des Securities Act von 1933 oder die Inhabervertragsbefreiung. Um für diese Freistellung zu qualifizieren, muss das Unternehmen Anforderungen erfüllen, wie zum Beispiel: - Die Gesellschaft muss in dem Staat eingebunden werden, in dem sie die Wertpapiere anbietet. - Das Unternehmen muss einen wesentlichen Teil seiner Geschäftstätigkeit in diesem Staat ausüben, der mindestens 80 seiner Geschäftstätigkeiten umfasst. - Das Unternehmen darf die Wertpapiere nur an Personen verkaufen, die im Gründungsstaat ansässig sind. Regalregistrierung nach Regel 415 Regalregistrierung gemäß Regel 415 - Eine Verordnung, die ein Unternehmen nach den Bestimmungen der US-amerikanischen Börsenaufsichtsbehörde (Securities and Exchange Commission, SEC) für eine neue Börsennotierung bis zu drei Jahren vor der Durchführung des Börsengangs anfordern kann. Das Unternehmen muss jedoch die erforderlichen Jahres - und Quartalsberichte bei der SEC einreichen. In Bezug auf SEC-Vorschriften, es ist formell als SEC Rule 415 bekannt. Manchmal sind die aktuellen Marktbedingungen nicht günstig für eine bestimmte Firma, ein öffentliches Angebot zu stellen. Angenommen, der Immobilienmarkt geht auf einen dramatischen Rückgang. In diesem Fall kann es nicht eine gute Zeit für einen Hausbauer sein, mit seinem zweiten Angebot herauszukommen, da viele Investoren pessimistisch sein werden über Unternehmen, die in diesem Sektor arbeiten. Durch die Regalregistrierung kann die Firma alle Anmeldeprozeduren vorab erledigen und bei günstiger werdenden Bedingungen schnellstmöglich zusammentreffen. Discount Bonds 8 Ihr höchster Ertrag ist ihre Rendite bis zur Fälligkeit, gefolgt von ihrer aktuellen Rendite. Ihre niedrigste Ausbeute wird ihre Nennausbeute sein. Da die Anleihen eine Rendite bis zur Fälligkeit aufweisen, die größer ist als die Couponrate, werden die Anleihen zu weniger als ihrem Gesichtswert angeboten. Diese Anleihen wurden daher mit einem Abschlag ausgegeben. Diese Sequenz wird für Anleger, die Prämienanleihen erwerben, rückgängig gemacht. Ihr höchster Ertrag wird ihre nominale Rendite sein, gefolgt von ihrer aktuellen Rendite und ihrer Ausbeute bis zur Fälligkeit. Für Anleger, die Anleihen zu pari kaufen, werden ihre Nominalrenditen, aktuellen Renditen und Renditen identisch sein. Nennwert Par Value Advance-Rückerstattung bedeutet, dass der Erlös aus dem Verkauf der neuen Anleiheemission in ein Treuhandkonto gestellt wird, um die bestehende Anleihe auszugeben. Wenn eine Gemeinde, wie es in diesem Beispiel der Fall ist, eine Rückerstattung der Vorfinanzierung vornehmen möchte, wird die Gemeinde die neue Emission verkaufen, wobei der Erlös aus dem Verkauf auf ein Treuhandkonto mit US-Staatsanleihen fällt. Die US-Staatsanleihen würden mit einem Fälligkeitsdatum erworben, das mit dem Auflegungsdatum der Emission zusammenfällt. Dies ermöglicht es, die zurückgezahlte Emission unter Verwendung der Erlöse aus den gereiften Staatsanleihen zurückzuziehen. Call Protection Provision Die Call Protection Advance von fünf Jahren wäre für einen neueren Käufer der Anleihe am wertvollsten, wenn die Zinsen sinken. Wenn die Zinsen sinken, werden die ausstehenden Anleihenkurse steigen. Emittenten von Anleihen werden Anleihen anrufen oder zurückziehen, wenn die Zinsen sinken, und wird neue Anleihen mit niedrigeren Zinssätzen ausgeben. Anleihen sind üblicherweise mit einer geringen Prämie über dem Nennwert ansteuerbar. Wenn die Anleihen nicht kündbar sind, kann der Anleger den vollen Nutzen aus einer Erhöhung des Marktpreises der Anleihen ziehen. Rendite auf Fälligkeit / Basis Die Laufzeitbasis wird manchmal verwendet, um eine Rendite bis zur Endfälligkeit zu bestimmen. Bei der Diskussion einer Anleihe kann die Rendite bis zur Fälligkeit einfach als Rendite oder Basis bezeichnet werden. Rendite auf Fälligkeit Regelmäßige Zinszahlungen die Differenz zwischen dem, was der Anleger für die Anleihe bezahlt hat und was sie erhält, wenn die Anleihe fällig wird (der Nennwert der Anleihe). YTM geht davon aus, dass ein Anleger alle Couponzahlungen an der Rendite bis zur Fälligkeitsrate neu anlegt. Coupon Rate / Nominal Rate / Fixed Interest Rate Der feste Zinssatz wird als bond039s Coupon Rate bezeichnet. Nominale Rendite Coupon RateFixed Zinssatz Rise Wenn die Zinsen steigen, bedeutet dies, dass die langfristigen Anleihen Preise sind volatiler als die kurzfristigen Anleihen Preise. Die Renditekurse sind volatiler als die Anleihekurse. Wenn der Investor erwartet Zinsen (Renditen) zu sinken, ist sie Erwartung steigenden Anleihenkurse. Die Anleihen, die steigen (fluktuieren) die meisten sind langfristige, Rabatt-Anleihen. Die Aufrufprämie von 3 Punkten (30 pro Anleihe) bezieht sich auf den Betrag, der über dem Nennwert liegt, den der Emittent dem Inhaber der Anleihe zahlen muss, wenn die Anleihe angerufen wird. Emittenten rufen in der Regel ausstehende Anleihen, wenn die Zinsen sinken, und sie sind in der Lage, neue Anleihen zu niedrigeren Zinssätzen ausgeben. Die Anleihe hat 8 Jahre Anrufschutz. Der Emittent müsste einen Aufwand aus Bargeld machen, um die Anleihen zurückzurufen, würde aber wegen des niedrigeren Zinssatzes, den der Emittent für die neuen Anleihen zahlen würde, Geld sparen. Eine Call-Rückstellung wird von einem Emittenten und nicht vom Anleihegläubiger ausgeübt. 1. Die Aufrufprämie ist etwas von einer Strafe, die der Emittent den Anleihegläubigern für die vorzeitige Rückzahlung zahlt. 2. Um die mit einer Kaufoption verbundenen Rechte zu erhalten, muss die Prämie an den Verkäufer gezahlt werden. Invertierte Renditekurve Die invertierte Renditekurve wird auch als negative, absteigende oder abfallende Kurve bezeichnet und ist relativ selten. Beachten Sie, dass die Renditen für die kürzere Laufzeit am höchsten sind und sinken, wenn die Laufzeit zunimmt. Wenn die Zinsen aufgrund einer engen Geldpolitik gestiegen sind, kann die Zinsstrukturkurve umgekehrt werden, was dazu führt, dass die kurzfristigen Zinssätze höher als die langfristigen Zinssätze sind. Drei-Monats-Schatzwechsel mit der kürzesten Laufzeit hätten die höchste Rendite. Wenn die Prämisse der Frage war eine einfache Geldpolitik und eine normale Zinsstrukturkurve, die richtige Antwort wäre die Wahl (d). Schatzanweisungen, Schuldscheine, Schuldverschreibungen Schatzwechsel (T-Bills), Schuldverschreibungen und Schuldverschreibungen sind marktgängige Wertpapiere, die die US-Regierung verkauft, um die fälligen Schulden zu begleichen und das Bargeld für den Betrieb der Bundesregierung zu erhöhen. Wenn Sie eine dieser Wertpapiere kaufen, sind Sie Ihr Geld an die Regierung der Vereinigten Staaten zu leihen. T-Rechnungen sind kurzfristige Verpflichtungen mit einer Laufzeit von einem Jahr oder weniger, und weil sie mit einem Abschlag vom Nominalwert verkauft werden, zahlen sie keine Zinsen vor Fälligkeit. Der Zinssatz ist der Unterschied zwischen dem Kaufpreis und dem bezahlten Preis entweder bei Fälligkeit (Nominalwert) oder dem Preis der Rechnung, wenn sie vor Fälligkeit verkauft wird. Schatzanweisungen und Anleihen sind dagegen Wertpapiere, die einen festgelegten Zinssatz aufweisen, der halbjährlich bis zur Fälligkeit bezahlt wird. Was sich Notizen und Anleihen unterscheidet, sind die Laufzeiten. Die Schuldverschreibungen werden in zwei, drei, fünf und zehn Jahren ausgegeben. Umgekehrt sind Anleihen langfristige Anlagen mit Laufzeiten von mehr als 10 Jahren. Weitere Informationen über T-Bills und andere Geldmarktinstrumente finden Sie unter What Fires The National Debt und unser Money Market Tutorial. Für weitere Informationen über Anleihen, siehe unsere Anleihen Basics Tutorial. Schatzwechsel - weniger als ein Jahr. Treasury Notes sind 3, 5, 10 Jahre Laufzeit. Staatsanleihen sind länger als 10 (30 Jahre) Jahre. Beispiele: 2-jährige Schatzanweisungen, 5-monatige Schatzanweisungen, 5-jährige Schatzanweisungen, 30-jährige Staatsanleihen TRACE ist ein Berichtssystem, das geschaffen wurde, um mehr Transparenz im Unternehmensanleihenmarkt zu schaffen. Es handelt sich nicht um ein Angebotssystem oder ein Ausführungssystem. Broker-Händler bieten Anführungszeichen und führt Transaktionen in Unternehmensanleihen. Es gibt kein aufsichtsrechtliches Quotierungs - oder Ausführungssystem, wie es für Beteiligungspapiere gilt. Die FINRA verbreitet Anleihe-Transaktionsinformationen für öffentlich gehandelte, TRACE-fähige Wertpapiere (einschließlich Anleihen mit Investment Grade und Non-Investment-Grade-Rating und Schuldverschreibungen eines staatlich geförderten Unternehmens). Obwohl Transaktionen für Wertpapiere gemäß Regel 144A an TRACE gemeldet werden, werden die Informationen nicht verbreitet. Regel 144A Wertpapiere TRACE ist ein Berichtssystem, das geschaffen wurde, um mehr Transparenz im Unternehmensanleihemarkt zu schaffen. Es handelt sich nicht um ein Angebotssystem oder ein Ausführungssystem. Broker-Händler bieten Anführungszeichen und führt Transaktionen in Unternehmensanleihen. Es gibt kein aufsichtsrechtliches Quotierungs - oder Ausführungssystem, wie es für Beteiligungspapiere gilt. Die FINRA verbreitet Anleihe-Transaktionsinformationen für öffentlich gehandelte, TRACE-fähige Wertpapiere (einschließlich Anleihen mit Investment Grade und Non-Investment-Grade-Rating und Schuldverschreibungen eines staatlich geförderten Unternehmens). Obwohl Transaktionen für Wertpapiere gemäß Regel 144A an TRACE gemeldet werden, werden die Informationen nicht verbreitet. Kurze Ausschreibung der Aktie Kurze Ausschreibung der Aktie (d. H. Ausschreibungsbestand, den eine Person nicht besitzt) ist verboten. Dividendenwerte können nur dann ausgegeben werden, wenn der Anleger die Aktie lang oder gleichwertig ist. Gleichwertige Wertpapiere umfassen Rechte, Optionsscheine und andere Wertpapiere, die von der Gesellschaft ausgegeben werden, die Gegenstand des Übernahmeangebots ist. Alle diese sind sofort umwandelbar, oder austauschbar oder ausübbar für die Subjektsicherheit. Standardisierte Call-Optionen sind keine gleichwertigen Wertpapiere, es sei denn, die Option wurde ausgeübt. Gemäß der NMS-Verordnung sind Broker-Händlern untersagt, Gebote, Angebote oder Anzeigen von Zinsen für NMS-Aktien mit einem Preis von 1,00 oder mehr in Schritten von weniger als 0,01 und bei NMS-Beständen von weniger als 1,00 in Schritten von weniger als 0,0001 (a Hundertstel eines Pennys). Die RR ist nicht berechtigt, eine Bestellung zu kaufen oder zu verkaufen in Subpennies (mehr als zwei Dezimalstellen) zu akzeptieren, wenn die Aktie bei oder über 1,00 gehandelt wird. Der RR ist nicht berechtigt, diesen Auftrag zu akzeptieren. Ein Insider, definiert durch das Securities Exchange Act von 1934, ist ein Direktor, Offizier oder Inhaber von mehr als 10 der stimmberechtigten Aktien einer Gesellschaft und seiner unmittelbaren Familienangehörigen. Personen, die Insider werden, sind verpflichtet, der SEC innerhalb von 10 Tagen nach ihrer Insiderberichterstattung zu melden. Ein Offizier oder Direktor ist verpflichtet, sich zu registrieren, unabhängig von der Anzahl der Aktien, die er besitzt der öffentlichen Körperschaft. Insider sind nicht berechtigt, kurzfristige Gewinne in der Aktie des Unternehmens, in dem sie Insider sind zu machen. Wenn ein Insider die Aktie innerhalb von sechs Monaten nach dem Erwerb mit einem Gewinn verkauft oder die Aktie für einen sechs Monate oder länger gehaltenen Gewinn verkauft und dann innerhalb von sechs Monaten nach dem Verkauf zurückkauft, kann die Gesellschaft zur Einziehung des Gewinns verklagen. Insider sind auch nicht gestattet, die Aktie der Gesellschaft, in der sie Aktionäre sind, zu kürzen. Insider sind nie verpflichtet, Aktien zu verkaufen, sind aber erlaubt, zusätzliche Aktien zu kaufen, solange sie der SEC gemeldet werden. Thinly Traded Security Ein Kunde kann kurz verkaufen oder kaufen eine Put von einem Rückgang profitieren, wenn der Wert eines Wertpapiers wird erwartet. Um kurz zu verkaufen, muss der Broker-Händler die Sicherheit leihen. Obwohl Leerverkäufe nur in einem Margin-Konto ausgeführt werden können, kann es schwierig oder unmöglich sein, die Sicherheit zu leihen, wenn eine Emission dünn gehandelt wird. Eine Put-Option kann eine attraktive Alternative zu verkaufen kurz. Allerdings sind Put-Optionen auf einem dünn gehandelten Wertpapier unwahrscheinlich. 039Zahlung für Auftrag Flow039 Die Entschädigung und Nutzen einer Vermittlung erhält, indem sie Aufträge zu den verschiedenen Parteien führt, die durchgeführt werden sollen. Die Maklerfirma erhält eine kleine Zahlung, in der Regel einen Penny pro Aktie, als Entschädigung für die Leitung der Bestellung an die verschiedenen Parteien. Es ist zulässig, dass Broker-Händler Zahlungen von einem Market Maker entgegennehmen, um Aufträge durch diesen Market Maker auszuführen. Zahlungen für den Auftragsfluss müssen den Kunden offengelegt werden. Ein Bestellschein muss die Kontonummer, die Anzahl der Aktien oder den Nennwert (für eine Anleihe), den Namen des Wertpapiers, die Beschränkungen (Limit, Stop, etc.) und die Kauf - oder Verkaufszahlen enthalten. Wenn es sich um einen Verkaufsauftrag handelt, muss der Ort der Sicherheit (lang oder kurz) angegeben werden. Die customer039s Sozialversicherungsnummer wird nicht auf dem Bestellschein benötigt. Unternehmen AZX hat ein Teilangebot für das Unternehmen BHQ angekündigt. Ein Aktionär der Gesellschaft BHQ ist lang 1.000 Aktien und lange 2 BHQ setzt. Für die Ausschreibung von Aktien kann der Aktionär: a. 1.000 Aktien b. 800 Aktien c. 500 Aktien d. 300 Aktien Erläuterung: Falsch. Ein Anleger, der Inhaber eines Unternehmens ist, das Gegenstand eines Übernahmeangebots ist, darf nur Aktien anbieten, die er lange hält. Kurzausschreibung ist nicht zulässig. Die Long-Puts wirken sich nicht auf die Netto-Long-Position des Kunden aus. Wenn ein Aktionär an der Long-Aktie Call-Optionspositionen geschrieben hat, werden die Optionen-Positionen seine Netto-Long-Positionen in der Aktie reduzieren. Reg FD verlangt, dass wesentliche, nichtöffentliche Informationen, die Analysten oder anderen Anlegern offengelegt werden, veröffentlicht werden müssen. Wenn die Bekanntmachung beabsichtigt war, müssen die Informationen gleichzeitig der Öffentlichkeit zugänglich gemacht werden. Unbeabsichtigt muss die Offenlegung innerhalb von 24 Stunden erfolgen. Ein Formular 8K, das bei der SEC eingereicht wird, ist eine Methode zur Erfüllung der Offenlegungspflicht. Rechnungsabgrenzung Zinssatz x Zinssatz / Zinssatz / Zinssatz / Zinssatz / Zinssatz / Zinssatz / Zinssatz / Und Kommunalanleihen Die Zinsen für Unternehmensanleihen und Kommunalanleihen ergeben sich aus einem 360-Tage-Jahr mit einem Monat mit 30 Tagen. Der Zinsbetrag ergibt sich aus der letzten Zinszahlung bis zum Abrechnungstermin bis einschließlich, jedoch nicht einschließlich. Smaller Pricing Increments of Bonds Nicht alle Anleihen Handel in geraden Punkten. Traditionell Corporate Fragen Handel auf den Bruchteil der 1/8 eines Punktes und Schatzanweisungen und Anleihen Handel in Schritten von 1/32 von einem Punkt. Hier einige Preisbeispiele: Unternehmensanleihen 87 1/8 87.125 871.25 Schatzanweisungen und Schuldverschreibungen: 100.16 100 16/32 100.50 1005.00 103.24 103 24/32 103.75 1037.50 Die US-Staatsanleihen sind in Punkt 32 angegeben. Wenn der Geldkurs einer Staatsanleihe bei einem Dollarwert von 875 angegeben wird, bedeutet dies, dass die Anleihe 87 1/2 ihres Nennwertes von 1.000 beträgt. Da 1/2 Punkt in 32nds 16 / 32nds ist, ist der Angebotspreis, wie in der Zeitung angegeben, 87,16. Dies ist das gleiche wie 87 1/2 oder 875. In dieser Frage müssen wir rückwärts arbeiten aus dem Dollar-Wert, um das Zitat. In den meisten anderen Beispielen erhalten Sie den notierten Preis von Unternehmensanleihen oder Staatsanleihen und werden gebeten, den Dollarwert zu finden. Der Begriff Basis wird manchmal verwendet, um eine Anleihe039s Ausbeute bis zur Reife auszudrücken. Ein Basispunkt entspricht 1/100 von 1. Die Preise für langfristige Anleihen neigen dazu, stärker zu schwanken als jene mit kürzeren Laufzeiten. Advance Erstattung bedeutet, dass der Erlös aus dem Verkauf der neuen Anleihe wird in einem Escrow-Konto gesetzt werden, um die bestehende Anleihe zurückzuziehen. Wenn eine Gemeinde, wie es in diesem Beispiel der Fall ist, eine Rückerstattung der Vorfinanzierung vornehmen möchte, wird die Gemeinde die neue Emission verkaufen, wobei der Erlös aus dem Verkauf auf ein Treuhandkonto mit US-Staatsanleihen fällt. Die US-Staatsanleihen würden mit einem Fälligkeitsdatum erworben, das mit dem Auflegungsdatum der Emission zusammenfällt. Dies ermöglicht es, die zurückgezahlte Emission unter Verwendung der Erlöse aus den gereiften Staatsanleihen zurückzuziehen. Discount-Anleihen mit langen Laufzeiten Die langfristigen Anleihekurse sind volatiler als die kurzfristigen Anleihekurse. Die Renditekurse sind volatiler als die Anleihekurse. Wenn der Investor erwartet, dass die Zinsen (Renditen) sinken, rechnet sie mit steigenden Anleihenpreisen. Die Anleihen, die steigen (fluktuieren) die meisten sind langfristige, Rabatt-Anleihen. Zinssätze UP und DOWN vs Bond Preisfestsetzung der städtischen Anleihen In der Regel zitieren die Börsenmärkte eine auf Fälligkeit ausgegebene städtische Anleihe, deren Rendite die Rendite der Rendite oder der Rendite unterschreitet. Laufzeitanleihen werden üblicherweise unter Anwendung des Dollarkurses (Prozentsatz der Par-Methode) quotiert und werden manchmal als Dollaranleihen bezeichnet. Zum Beispiel kann ein Händler eine Serienanleihe zu einem Basispreis von 5,35 anbieten, was eine Rendite bis zur Fälligkeit von 5,35 bedeutet. Eine Laufzeitanleihe würde zu einem Kurs von 98 notiert, was bedeutet, dass die Anleihe mit 98 vom Nennwert oder 980 (1000 x 98) notiert wird. Der von der Federal Reserve festgelegte Zinssatz. Die den berechtigten Geschäftsbanken oder anderen Depotinstituten angeboten wird, um die Liquiditätsprobleme und den Druck der Reserveanforderungen zu reduzieren. Der Diskontsatz erlaubt es der Bundesreserve, die Geldmenge zu kontrollieren und wird verwendet, um die Stabilität auf den Finanzmärkten zu gewährleisten. Wenn die FRB den Diskontsatz erhöht, erhöht sich das allgemeine Zinsniveau. Die Preise für langfristige Anleihen verringern sich stärker als der Preis für kurzfristige Anleihen. Ein sinkender Fonds wird von einem Emittenten verwendet, um Mittel einzustellen, die für die Zwecke der Rücknahme von Anleihen eines Unternehmens vor oder bei Fälligkeit verwendet werden. Call-Schutz wäre am meisten wertvoll für einen Käufer von Anleihen, wenn die Zinsen sinken. Wenn die Zinsen sinken, steigen die Anleihenkurse. Eine Gemeinde oder ein Emittent würde wahrscheinlich Anleihen aufrufen, wenn die Zinsen sinken, damit es neue Anleihen mit niedrigeren Zinssätzen ausgeben kann. Obgleich Anleihen mit einer geringen Prämie über dem Nennwert angesetzt werden können, kann der Anleger, wenn die Anleihen nicht kündbar sind, den vollen Nutzen aus einer Erhöhung des Marktpreises der Anleihen ziehen. Eine Obligationenanleihe wird in der Regel verlangen, dass der Anleihegläubiger eine Prämie (über dem Nennwert) zahlen muss, wenn ein Emittent Anleihen (Rückzahlungen vor Fälligkeit) anruft. Zum Beispiel ist eine Anleihe, die in 30 Jahren reift, bei 103,5 in 10 Jahren kündbar. Der Emittent muss eine Prämie von 35 pro Anleihe (103,5 von 1.000 ist 1.035) über Par bezahlen, um die Anleihen vor der Fälligkeit zurückzuziehen. Serial Anleihen reifen in aufeinander folgenden Jahren und werden auf einer Rendite-zu-Maturity-Basis bewertet. Da sich eine serielle Emission ihrer Endlaufzeit nähert, verringern sich die ausstehenden Kapital - und Gesamtzinszahlungen. Term-Anleihen werden zu einem späteren Zeitpunkt fällig und werden zu einem Dollarpreis (Prozentsatz des Nennwertes) festgesetzt. Kaufkraftrisiko Langfristige, hochgradige Anleihen sind relativ sichere Anlagen, haben aber ein Kaufkraftrisiko. Da die Höhe der Zinserträge festgelegt ist, kann die Kaufkraft der Zinserträge aufgrund der Inflation langfristig sinken. Ein Anstieg der Inflation reduziert die Menge an Waren und Dienstleistungen, die mit dem festen Betrag von Dollar gekauft werden können. Nur Treasury-Verpflichtungen sind annehmbare Wertpapiere als Treuhandgesellschaft, wenn eine Anleihe vorausberechnet wird. Wenn eine Anleihe vorrangig ist, ist das einzige anwendbare Datum das erste Anrufmerkmal. Daher muss die Anleihe zum ersten Abrufdatum festgesetzt werden. Serienschuldverschreibungen Zins - und Tilgungszahlungen Serienschuldverschreibungen haben unterschiedliche Laufzeiten mit geringeren Schuldverschreibungen, wie die Zeit vergeht. Die Anleihen haben sinkende Zins - und Kapitalbeträge. Term Bonds im Vergleich dazu reifen gleichzeitig und haben stabile Zinszahlungen mit dem Hauptbezahlt an einem Fälligkeitsdatum. Methode zur Aufzählung von Laufzeitanleihen Anleiheverkäufen auf Basis von Obligationen Anleihen können auf Basis einer Rendite bis zur Fälligkeit, die in diesem Beispiel eine 4.35-Basis ist, notiert werden. Die Anleihe hat eine Rendite von 4,35. Wenn der Nominalertrag (Couponzins) 4,95 beträgt, bedeutet dies, dass die Anleihe mit einer Prämie über dem Nominalwert (1.000) verkauft wird. Ist die Rendite bis zur Fälligkeit (4.35) geringer als die Nominalrendite (4.95), wird die Anleihe zu einem Aufgeld verkauft. Die Anleihen der Kommunalanleihen basieren auf: Dollarkurs Kommunale Anleihen (Anleiheemissionen mit einem Fälligkeitsdatum) werden auf Basis eines Dollarpreises notiert. Term Bonds sind auch als Dollar-Anleihen bekannt. Städtische Serienanleihen (die mehrere Fälligkeiten aufweisen) werden auf einer Rendite-bis-Maturity-Basis notiert. Das Kapitalrisiko ist das Risiko, dass ein Investor seinen Kapitalbetrag verliert, die Höhe der Mittel, die in eine Sicherheit investiert werden. Im Vergleich zu den anderen Wertpapieren weisen Anleihen das geringste Kapitalrisiko auf. Bei Fälligkeit erhält der Anleger den Hauptbetrag der Anleihe, wodurch das Kapitalrisiko minimiert wird. Zinsrückgang Wenn die Zinsen sinken, werden die Wertpapiere mit den längsten Laufzeiten höchstwahrscheinlich den größten Preisanstieg haben. Vs Schatzwechsel b. Geschäftspapiere c. Staatsanleihen d. Treasury weist grösste Kursschwankungen auf, wenn die Zinsen nach oben oder unten steigen. Die Anleihen der Staatsanleihen haben die längste Laufzeit der aufgeführten Optionen und haben die größte Fluktuation im Preis. Da sie die längste Laufzeit haben, werden sie den Risiken des Marktes für die längste Zeit ausgesetzt sein. ein. Geschäftspapiere b. Schatzwechsel c. Schatzanweisungen d. Treasury-Anleihen Compound-akkreditierter Wert Der Anleger erhält 102 der Wertminderung, da die Sicherheit eine Null-Kupon-Anleihe oder OID-Anleihe ist. Der zusammengesetzte Wert entspricht dem ursprünglichen Wert der Schuldverschreibung plus der jährlichen Akkretion zum Zeitpunkt des Aufrufs. Wenn die Anleihe keine OID-Anleihe war und aufgerufen wurde, würde der Anleger 102 von Par oder 1,020 erhalten. Die ausstehenden Anleihen werden als vor - oder rückerstattungsfähige Anleihen bezeichnet. Die neue Ausgabe wird als Rückerstattungsproblem bezeichnet. Dies geschieht in der Regel, wenn der Emittent Mittel zu niedrigeren Zinssätzen leihen und dadurch die Zinskosten senken kann. Die Renditekurven steigen auf (absteigend von den kürzeren auf längere Laufzeiten), wenn das Geld einfach ist. In diesem Fall sind die kurzfristigen Zinssätze niedriger als die langfristigen Zinssätze. Eine absteigende Zinsstrukturkurve, die auf eine knappe Geldsituation hinweist, zeigt kurzfristige Zinssätze, die höher sind als die langfristigen Zinssätze. Eine flache Zinsstrukturkurve zeigt, dass kurzfristige und langfristige Zinssätze ungefähr gleich sind. FRB-Richtlinien können die Zinskurven beeinflussen, aber sie sind nicht fixiert und werden durch eine Vielzahl von Faktoren beeinflusst. Eine Anleihe039s Bestätigung muss die niedrigere der Rendite bis zur Fälligkeit oder der Rendite zu melden. Dies wird manchmal als die Ausbeute bis zum Schlimmsten bezeichnet. LIBOR (die London Interbank Offered Rate) ist der Zinssatz, den die Banken in London gegenseitig für kurzfristige Kredite aufladen. LIBOR ist die London Interbank Offered Rate. Es ist die durchschnittliche Rate, die Banken gegenseitig auf Darlehen für London Einlagen von Eurodollars aufladen. Das datierte Datum wird nur verwendet, um aufgelaufene Zinsen auf eine neue Emission zu berechnen. Bei der Preisfindung einer Anleihe (Bestimmung der Rendite, wenn der Kurs bekannt ist oder die Bestimmung des Preises, wenn die Rendite bekannt ist), sind der Coupon, das Settlement Date und die Fälligkeit erforderlich. Eine Anleihe beginnt mit einem Investment Grade Rating, wird aber später auf unter Investment Grade gesenkt. Solche Bindungen sind als gefallene Engel bekannt. Anleihen, die durch ein bestimmtes Gerät besichert sind, das im Besitz des Unternehmens ist und in seinem Geschäft verwendet wird. Eisenbahnausrüstung wird auch als rollendes Material bezeichnet. Sparbriefe sind nicht verhandelbar, weil sie nicht im Sekundärmarkt verkauft werden dürfen und nur von der US-Regierung zurückgekauft werden können. CMO - Collateralized Mortgage Obligations CMOs zahlen monatliches Einkommen aus Zinsen, die steuerpflichtig ist, und Kapital, die eine steuerfreie Kapitalrendite ist. Aufgrund der Struktur eines CMO wird ein fluktuierender Kapitalbetrag monatlich, nicht bei Fälligkeit, zurückgegeben, was die CMOs von den meisten anderen festverzinslichen Wertpapieren unterscheidet. Collateralized Mortgage Obligations Eine Private Issued Derivative Sicherheit Aufgrund ihrer einzigartigen Eigenschaften können CMOs nicht mit anderen Arten von Investitionen, einschließlich einer Bescheinigung über die Einzahlung verglichen werden. Dieses Verbot gilt für alle Mitteilungen der Öffentlichkeit über GMOs, einschließlich Einzelhandelskommunikation und Korrespondenz. Das Vorauszahlungsrisiko ist mit einem fallenden Zinsumfeld verbunden, in dem Hypothekenbanken ihre Hypotheken mit einer schnelleren Rate refinanzieren oder zurückzahlen. Der Inhaber einer CMO erhält daher einen größeren Teil des Kapitals früher als erwartet und ist gezwungen, zu niedrigeren Sätzen zu reinvestieren. Viele CMOs werden von staatlichen Agentur Hypotheken-backed Securities (MBS), die ein Minimum an Kreditrisiko haben erstellt. Einige CMOs werden ohne diese Unterstützung aufgebaut und daher ist das Kreditrisiko ein größeres Problem. Die CMOs tragen - wie bei den meisten festverzinslichen Wertpapieren - das Zinsrisiko. Das Extensionsrisiko ist das Gegenteil des Prämienrisikos, wo die Zinsen steigen und der CMO-Inhaber einen kleineren Teil ihrer Kapitalrücklage erhält. Broker-Händler müssen Kunden Unterrichtsmaterial über die Merkmale der CMOs. Dieses Material muss enthalten: eine Diskussion über die Merkmale und Risiken der GMOs. Dazu gehören: wie sich ändernde Zinssätze die Tilgungsraten und die durchschnittliche Laufzeit der Wertpapiere, steuerlichen Erwägungen, Kreditrisiken, Mindestinvestitionen, Liquidität und Transaktionskosten beeinflussen können. Eine Diskussion über die Struktur einer GMO. This includes the different types of structures, tranches, and risks associated with each type of security. It is also important to explain to a client that two CMOs with the same underlying collateral may have different prepayment risk and different interest-rate risk. A discussion that explains the relationship between mortgage loans and mortgage securities A glossary of terms applicable to mortgage-backed securities Changing currency rates are not applicable to the risks associated with CMOs. Correct. Retail communications (e. g. sales literature) and correspondence about collateralized mortgage obligations (CMOs) are subject to special rules. The term collateralized mortgage obligation must be included within the name of the product and it must disclose that the government agency backing only applies to the face value of the securities (not any premium paid). If the client paid a premium to purchase a CMO, only the par value would be backed by the entity backing the security. The actual coupon rate, not the spread above Treasuries, needs to be disclosed. Due to the prepayment risk of CMOs, the yield to average life would be disclosed, not the yield to maturity or yield to call. The cash flows, future payments that a bondholder will receive, determine the market price of the bond. Collateralized mortgage obligations (CMOs) have uncertain cash flows due to the prepayments (early retirement) of mortgages. Prepayment risk is the risk that homeowners will pay off their mortgages early and the clients who invested in the securities backed by the mortgage will receive their principal prior to maturity. The Public Securities Association (now SIFMA), an association of financial services firms, created a standard model for estimating the prepayment rate for mortgage-backed securities including CMOs. This is called the PSA Model. collateralized debt obligation (CDO) A collateralized debt obligation (CDO) is a type of asset-backed security. A CDO is issued as a bond, which is backed (collateralized) by a pool of bonds, loans, and various other assets. Ownership of this type of security is typically in the form of a tranche (slice), with any given tranche from the CDO carrying a different maturity and risk level. The return an investor can expect from this type of investment is based on the credit quality of the underlying assets contained in the pool. CDOs are similar in structure to collateralized mortgage obligations (CMOs). These investment vehicles are broadly categorized as asset-backed securities. GNMA Government National Mortgage Association GNMA pass-through certificates are guaranteed by the U. S. government. Interest and principal payments are received monthly and, therefore, the investor will receive principal payments before, not at maturity. The interest is subject to federal, state, and local taxes Prepayment risk measures the possibility that homeowners will refinance (prepay) their mortgages. Historically, the speed of prepayment increases when interest rates fall. If this happens, payments will flow into the CMOs at an accelerated rate, forcing investors to reinvest these monies at lower-than-anticipated rates. Therefore, the CMO with the higher interest rate will have higher prepayment risk. GNMA-backed CMOs are highly rated and, therefore, have little credit risk. Since both CMOs are backed by GNMAs, credit risk is minimal for both pools. Many homeowners pay off their mortgages early. When interest rates fall, homeowners have an incentive to refinance and pay off their existing mortgages. These prepayments are passed through to the pools holding the old mortgages. The investors then need to reinvest this large amount of principal at a time when interest rates have declined. This is referred to as prepayment risk and it is associated with mortgage-backed securities such as CMOs. Although both Fannie Mae (FNMA) and Freddie Mac (FHLMC) issue mortgage-backed securities, in this question choice (b) covers the bonds of these issuers, which do not have prepayment risk. CMOs are issued in minimum denominations of 1,000, are backed by pass-through securities (FNMA, GNMA, and FHLMC), and pay interest and principal monthly. Student Loan Marketing Association known as SLMA or Sallie Mae The Student Loan Marketing Association (known as SLMA or Sallie Mae) provides liquidity to student loan makers by purchasing federally sponsored student loans. It also lends funds directly to educational institutions. Sallie Mae securities are not backed by the full faith and credit of the U. S. government, but the SLMA maintains a direct line of credit with the U. S. government. It does not issue securities that can be redeemed to pay for college education. Federal Home Loan Banks FHLB The Federal Home Loan Bank issues two types of securities to raise capital, discount notes with maturities of less than 1 year, and consolidated bonds with maturities of up to 30 years. These funds are used to lend funds to FHLB member banks that, in turn, lend these funds to their customers. Federal Intermediate Credit Bank (FICB) A bank sponsored by the federal government to provide funds to institutions making loans to farmers. The Federal Intermediate Credit Bank (FICB) makes agricultural loans to farmers. Three separate entities: Banks for cooperatives, Intermediate Credit Banks, and Federal Land Banks. Leverage is borrowing money to amplify the outcome of a deal Municipal Bond Tips For The Series 7 Exam By Investopedia Staff on February 26, 2009 Filed Under: Continuing Education, FINRA Exams, Government Bond, Trust Indenture Act Municipal bond questions, which include questions about the types of municipal bonds, the markets and rules, make up approximately 50 to 55 questions on the Series 7 exam. (For everything you need to know for the Series 7 Exam, see our Free Series 7 Online Study Guide.) Much of the time, if a candidate analyzes these question by asking whether they refer to a general obligation (GO) bonds or to revenue bonds he or she can probably eliminate at least two of the four possible answers. In some cases, determining the type of bond will answer the question. In this article, we will approach municipal bonds by learning how to differentiate between GO and revenue bonds in several types of situations. General Obligation or Revenue Bond A side-by-side comparison chart may be useful to have available for immediate review while working on practice questions. Refer each municipals practice question to the appropriate chart and eliminate incorrect answers. Repeated use of the chart will be a helpful review of the subject. There are two types of municipal bonds: general obligation and revenue. By comparing them side-by-side, it is clear that they are significantly different. (To learn more, see The Basics Of Municipal Bonds.) General Characteristics - Revenue Vs. General Obligation Bonds Characteristics General Obligation Bond Revenue Bond Issued By: States and political subdivisions below the state level, including taxing districts States and political subdivisions below the state level, but including commissions, authorities, agencies, etc. Backed By: Full faith and credit of issuer, or the taxing power of the issuer. Below state level, this primarily means ad valorem (property) taxes Actual revenues generated by user fees from the project/facility Voter Approval: Required, e. g. by a bond referendum. Voter approval not required Special Types: Double-barreled bonds: These have a direct funding source and the ultimate backing of the issuer039s taxing power if necessary. Industrial development revenue bonds (IDRBs): These are backed by corporate lease payments, or corporate credit. Special tax bonds backed by special taxes (tobacco, gasoline, hotel/motel) for a specific project or purpose not by ad valorem taxes. Special assessment bonds: Backed by assessments made to benefited properties - e. g. sewer and sidewalk bonds. Moral obligation bonds: backed by state legislature039s assurance that, in case of a shortfall in revenues, the necessary funds will then be appropriated. Public housing authority (PHA)/ new housing authority (NHA) bonds: Backed by rental/lease revenues from low-income public housing, but guaranteed by the full faith and credit of the U. S. government. Note: PHA/NHA bonds are not double-barreled bonds. Municipal Notes Municipal debt instruments that are not bonds because of their short maturities are called municipal notes. They are short-term cash-flow instruments. The major types of municipal notes are: Tax Anticipation Notes (TAN) - These are issued to smooth out a city039s cash flow between tax collection periods. Revenue Anticipation Notes (RAN) - These are similar to TANs. Bond Anticipation Notes (BAN) - Notes to raise funds when a bond has been issued, but money has not yet been received. The proceeds of the bond issue will pay off the BAN. Tax and Revenue Anticipation Notes (TRAN) The safety rating system for notes is the Moody039s Investment Grade (MIG) rating system. The actual ratings have not been a part of the exam, but the name of the system and its association with municipal notes has been reported to show up in questions. Trust Indentures A special characteristic associated with revenue bonds but not with GO bonds is the trust indenture (the individual elements are known as protective covenants). Remember, municipal bonds are not subject to federal laws such as the Trust Indenture Act of 1939. Municipal issuers establish trust indentures as reassurance for bond buyers, not because of the federal law. This is one reason why the elements of the revenue bond039s indenture are known as protective covenants. Revenue Bond Covenants Rate Covenant The issuer assures bondholders that user fees will be raised, as necessary, to assure coverage of debt service and expenses. Non-Discrimination Covenant All users of the facility must pay the same fees. Additional Bonds Two types of covenant: Closed-end: The issuer may not issue additional bonds with equal claim to assets unless funds are required to complete construction of the facility. Open-end: The issuer may sell additional bonds with equal claim to assets if permitted under the provisions of the additional bonds test described in the indenture Flow of Funds The priority of payments under the indenture - what obligation is paid first and second - is described in one of two types of pledges: Gross revenue pledge: Debt service is paid first (from the gross revenues, operations and maintenance expenses are paid second. Net revenue pledge: Debt service is paid second from the net revenues. Operations and maintenance expenses take priority. Hint: These pledges refer to when debt service is paid. If first: from the gross revenues. If second: from the net revenues. This distinction is a common exam question. Insurance Covenant The trust indenture specifies the property/casualty insurancee coverage for the facility for repairs or to make a total call on the bonds in case of catastrophic damage. Call Provisions This section of the indenture specifies when, at what price and by which method (in-whole or in part) calls may be made. Put Provisions This section describes the put provisions (if any) on the bond. It specifies the put period and put price at which the bonds may be sold back to the issuer. Because of the different nature of funding sources for GO and revenue bonds, the approach to analysis is quite different. Recall that GO bonds are backed by the taxing power of the issuer, which at levels below the state is essentially money from property (ad valorem) taxes. Note It is unlikely that Series 7 candidates will be required to compute property taxes, but knowing the pattern for computation is much more likely. The basic formula for computation of property taxes is: Estimated Market (Sale) Value x Aassessment Rate () Assessed Value x Millage Rate (1 mill .001 or 1/10th of a cent) Taxes Due Analysis of municipal bonds provides another distinct delineation between GO and revenue bonds. This distinction is primarily because of the nature of their backing and the requirement that GO bonds be subject to voter approval Which Penny Stocks Can Help You Turn 1K To 10K Comparing General Obligation and Revenue Bonds - General Obligation Revenue Major Factors and Tools Community attitude toward public debt and taxes (recall voter approval is required) Debt limits (ceiling) Demographics and economic health Population base - growing or declining Unemployment rate Economic diversity - is it a one-industry city Tax base Assessed value of property (recall ad valorem taxes) Municipal debt statement a major tool for analyzing GO bonds) the basic outline: Estimated sale (market) value of taxable property Assessed value of taxable property Direct debt i. e. debt specifically the liability of the city. Plus: Overlapping (coterminous) debt shared by more than one jurisdiction (e. g. city and county) Minus: Self-supporting debt (double-barreled bonds) Equals: Net overall debt Economic justification: Is it reasonable to expect that a proposed facility can pay for itself Feasibility study: The beginning point. This study is conducted to explore costs and potential revenues from a proposed facility. Competitive facilities survey. A part of the feasibility study that assesses the impact of competing facilities on the potential revenues from the project. Debt coverage ratio: How many times do the current/expected revenues cover the bond039s debt service requirements The Underwriting Process Again, because GO bonds and revenue bonds differ, the process of bringing new bonds to market (the primary market) is different. The exam tends to focus to a greater extent on the characteristics of the GO process. The principal underwriter (broker/dealer) is selected by the issuer in revenue bond issues - known as a negotiated process. Recall, however, that GO bonds depend on the taxing power of the issuer and voter approval. For these reasons, GO bond underwriting contracts are awarded by a competitive sealed bid sale. Note Prior to issuing any municipal bond, the issuer will have an attorney, who is then referred to as the bond counsel, render a legal opinion. The firm that prepares the legal opinion is usually a tax attorney firm, because for buyers, the tax implications of the bond are of major concern. The legal opinion will include: The authority to borrow, demonstrating that it is legal for this entity to borrow money via municipal bonds under state and federal laws. 1933 Act exemption, which states that municipal issuers are exempt from filing registration statements with the SEC - the exemptions are cited. Tax exemption, which states that the interest from municipal bonds is normally exempt from federal taxation. The legal opinion cites the appropriate laws. A copy of the legal opinion must accompany delivery of all municipal bonds and will be one of two types: Unqualified opinion: The bond counsel has no reservations about the issuer039s authority to borrow, the nature of the bond and the tax exemption. This is usually called an approving opinion of counsel. Qualified opinion: The bond counsel has concerns about some aspects of the bond. The following chart refers to GO bonds, because the primary market in these bonds is the principle focus of the Series 7 exam. General Obligation Bond Underwriting Process Notification of Potential Bidders The issuer publishes an ad in the Bond Buyer (the principal source of information in the municipal bond primary market) The ad is known as a notice of sale. Elements of the notice of sale include: Amount and type of bonds to be sold and their purpose. Interest payment dates, including the dated date from which the bonds begin accruing interest. Identification of the bond counsel (law firm) that prepared the legal opinion. The invitation to bid, which gives the specifics of exact location and time for bids to be delivered. The good faith deposit, which specifies the amount of a check (which will be credited toward the purchase of bonds for the winning bidder. These checks are returned to unsuccessful bidders after the bid is awarded. A maturity schedule - in the case of GO bonds, maturities are normally serial. Maturity for a revenue bond is usually term. Award of Underwriting Contract Potential underwriters obtain a copy of the official bid form from the issuer or through the Bond Buyer. The firm then writes a scale that shows the coupon rate and yield to maturity of each maturity date. The underwriting contract is awarded to the municipal dealer that submitted the lowest net interest cost (NIC). Many issuers also require that the bidders also provide the true interest cost (TIC). This calculation takes the time value of money into account. Once a municipal dealer has won the bidding, it is now at risk for the sale of the bonds. This is the reason that dealers routinely form underwriting syndicates - to share the risks with other dealers. Syndicate Formation An underwriting syndicate is formed by a document known as a syndicate letter or an agreement among underwriters. Types of Syndicates Divided: Also known as Western - once the syndicate member has sold the bonds for which it accepted a liability, there is no further liability for any unsold bonds. Undivided: Also known as Eastern - these are often called joint accounts in which the member firm has a continuing liability for unsold bonds at the same percentage rate as the firm039s original commitment. Be certain to know the difference in the types of syndicates. This is a common exam concept. Orders for the Purchase of Municipal Bonds Orders for the purchase of municipal bonds are filled in a priority sequence specified in the syndicate039s priority allocation provisions specified in the underwriting agreement and provided to all members of the syndicate. Municipal issues are frequently very popular and may be oversubscribed, which means that there are more orders for bonds than there are bonds. The order period in which the syndicate solicits and accepts orders for bonds is set by the syndicate manager, and is frequently the day after the syndicate wins the bid. Orders are allocated for fill according to the following sequence, regardless of the time sequence in which they were received. 1.Pre-Sale: These orders are entered before the syndicate wins the bid. Customers are willing to commit to buying bonds without specific information on exact price/yield. 2.Group Net: The proceeds of sales from these orders are placed in the syndicate bank account and distributed to members of the syndicate according to their participation upon completion of the underwriting. 3.Designated: These orders specify which member of the syndicate is to receive credit for the order. Note that they are filled after the group orders. 4.Member: Last place in the priority sequence are member orders. These are orders placed by members of the syndicate that want to buy bonds for their own proprietary inventory. Very frequently the Series 7 exam asks questions about this priority sequence. A quick memory key is the phrase, Pro Golfers Don039t Miss, or PGDM. A reminder for pre-sale, group net, designated and member orders. The syndicate buys the bonds from the issuer and sells (reoffers) the bonds to the public at a markup. The markup is known as the underwriting spread. The typical allocation of the spread is shown in the following example of a 1-point (10) spread: The total takedown, earned by syndicate members for their own sales, is the selling concession plus the additional takedown. In this example, the total takedown is 9 per bond. When the bonds are delivered to buyers and settlement is made, the buyer will receive a final confirmation and a copy of the official statement if it has been completed. If the final official statement is not ready, the buyer will receive a copy of the preliminary official statement, which is subject to amendment. Note The official statement and the preliminary official statement are disclosure documents about a municipal offering. They serve similar purposes as the prospectus and preliminary prospectus in corporate offerings. The language is different because municipal issuers are not required to follow the Act of 1933 or other federal laws relating to the issuance of securities. If the bonds themselves are not ready for delivery, the customer will receive a temporary confirmation known as a when issued confirm. This document does not show: Settlement date, because that is yet to bet determined Accrued interest, because exact settlement has not been determined Total dollar amount, because the accrued interest must be added to the purchase price to produce the total dollar amount Conclusion Municipal bond questions make up about 20 of the 260 questions on the Series 7 exam. Learn to master these questions and you039ll be well on your way to achieving a passing score. Also, see our Free Online Series 7 Study Guide for everything you need to to know for the Series 7 exam. Share Badge Pointing To The Right At The Share Icons Which Penny Stock Will Turn Your 1K To 10K by Investopedia Staff Investopedia believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics. More From Investopedia Staff. Diversification Beyond Stocks The Basics Of Outstanding Shares And The Float The Alphabet Soup Of Stocks Sponsored From Around the Web How Cruise Lines Fill All Those Unsold Cruise Cabins How Cruise Lines Fill All Those Unsold Cruise Cabins What the Bible Says About Investing (Shocking) What the Bible Says About Investing (Shocking) The 5 Dumbest Things to Do If You039re in Debt The 5 Dumbest Things to Do If You039re in Debt See Anyone039s Arrest Record Online See Anyone039s Arrest Record Online Why Time Is Running Out on Great Home Refinance Plans Why Time Is Running Out on Great Home Refinance Plans An option strategy whereby an investor, holding a long position in stock, purchases a put on the same stock to protect against a depreciation in the stock039s price. Net Credit Spread results when an investor buys an option with LOWER premium and sells an option with a HIGHER premium. He is said to have SOLD the spread or be SHORT the spread. CREDIT (money in) Maximum Gain net credit (when both options expire) Maximum Loss difference in strikes - net credit (premium) Breakeven lower strike net premium for call spreads higher strike - net premium for puts spreads Profitability credit spreads narrow For all credit spreads, the maximum gain potential is the (net) premium collected. Net Debit Spread results when an investor buys an option with a HIGHER premium and sells an option with a LOWER premium. He is said to have bough the spread or be long the spread. DEBIT SPREAD Maximum Gain difference in strikes - net debit (both options in-the-money) Maximum Loss net debit Breakeven lower strike net premium for call spreads higher strike - net premium for put spreads Profitability debit spreads widen For all debit spreads, the maximum loss potential is the (net) premium paid. A bear spread always involves buying the higher exercise price and selling the lower exercise price. This applies to both call spreads and put spreads. A bull spread always involves buying the lower exercise price and selling the higher exercise price. This applies to both call spreads and put spreads. A bear spread always involves buying the higher exercise price and selling the lower exercise price. This applies to both call spreads and put spreads. A bull spread always involves buying the lower exercise price and selling the higher exercise price. This applies to both call spreads and put spreads. credit call spread This position is referred to as a credit call spread. Evelyn has received more for establishing the position because the short call has a strike price less than the long call. If both calls expire unexercised, Evelyn will keep the difference. If DEF falls below 40 per share, neither call will be exercised, resulting in a profit for Evelyn. foreign currency spot transactions settle in Settlement for foreign currency spot transactions is usually two business days. The Interbank market is an unregulated over-the-counter market in which currencies of different countries are bought and sold. Foreign currency transactions may settle on a spot or forward basis. Spot transactions settle in two business days from the trade date. In a forward transaction, the exchange rate is established on the trade date but settlement occurs in more than two business days. While foreign currency transactions are not reported on Nasdaq, spot quotes are available from information vendors such as Knight-Ridder Financial Information Systems, Reuters, and Telerate. settlement date OPTIONS REG T Option transactions settle on the next business day between brokerage firms and the Options Clearing Corporation. According to Regulation T, payments for transactions in cash and margin accounts must be made by the customer within two business days following the regular-way settlement date. Since regular-way transactions settle in three business days, customers have five business days in which to pay for purchases. Therefore, while option transactions settle next day, the Reg T payment requirements are based on a regular-way transaction. Hence, customers have five business days in which to pay for option purchases. investor placing a market order An investor placing a market order will normally buy at the offer and sell at the bid Options Clearing Corporation risk disclosure document A customer must be sent a current Options Clearing Corporation risk disclosure document prior to or at the time the account is approved for options trading. the options account must be approved by ROP before trade can occur Retail communications regarding options must be submitted to the firms option regulator (an exchange or FINRA) for approval at least 10 days prior to initial use. All retail communications must be maintained on file by the member firm for three years Must sign an agreement to abide by the rules of the exchange and rules of the Options Clearing Corporation The customer must sign an agreement to abide by the rules of the exchange and the Options Clearing Corporation no later than 15 days following the approval of the account. Under AMT rules, taxpayers must compute their income taxes twice. An individual subject to the AMT must first calculate his taxes using the standard method, and then he must recalculate his tax liability using the AMT method. The taxes due are the greater of the two calculations. Tax-preference items are used in calculating the alternative minimum tax. Straight-line depreciation is not a tax-preference item. The subscription agreement will normally state the suitability standards for the program, specify who must sign the agreement, specify to whom the check must be made payable, and make inquiries of the purchaser to make sure that she understands the ramifications of the investment and can meet the financial requirements of this investment. Priority provisions for liquidating a limited partnership, and the tax implications, would be found in the offering documents. Tax Preference Items Excess Depletion, Certain Intangible drilling costs, excess depreciation (not straight line) may result in the investor being subject to Alternative Minimum Tax (AMT) a tax preference item is an item that would be tax deductible under normal circumstances but is not for purposes of the alternative minimum tax The acceptance of a limited partner is generally recognized when the general partner signs the subscription agreement. This agreement specifies: - The amount to be invested - To Whom all checks must be made payable and who must sign the agreement - Suitability Standards for the investment - A statement that attest to the investor039s ability to meet the financial requirements of the investment - Who must sign Agreement of Limited Partnership defines the relationship between the general partner and the limited partners. - The rights and obligations of the general partner - The rights and obligations of the limited partners - Sharing arrangements for profits/losses - Withdrawal terms for limited partner - Priority provisions in the event the partnership is liquidated Certificate of Limited Partnership The purpose of this document is to set forth the terms of the business relationship that has been created. Some of the information contained in the Certificate Limited Partnership includes: - The name of the business - The purpose of the partnership - The name and address of each general and limited partner - The conditions under which the partnership will be terminated - Priority provisions in the event of a partnership liquidation Exchange-traded notes (ETNs) - Unsecured debt security - linked to performance of other securities - Return are linked to performance of a commodity, currency or index minus fes. - Do not pay annual coupon or specified dividend. - All gains are paid at maturity - traded on an exchange - may be purchased on margin or sold short - can hold until maturity - credit risk tied to creditworthiness of financial institution backing the note. - Inverse ETN also exist pay opposite of the benchmark that is being tracked. Exchange-traded notes (ETNs) are a type of unsecured debt security. ETNs carry issuer risk that is tied to the creditworthiness of the financial institution backing the note. If the issuer039s financial condition deteriorates, it can impact the value of the ETN negatively, regardless of how its underlying index performs. The credit rating of the securities included in a mutual fund, closed-end bond fund company, or ETF has an impact on these types of securities. These securities are not affected by the ratings of the company that is issuing the fund or ETF. Unit Investment Trust (UTI) - Formed under indenture. - Trustees instead of BOD supervise not manage All of the characteristics listed are true, except that the certificates have coupons attached and are in bearer form. Some unit investment trusts are funds that buy bonds for a portfolio and usually hold the bonds until maturity. The life of these funds is usually limited to the life of the bonds in the portfolio. Units can be bought in multiples of 1,000. The units can be redeemed at any time. If the general level of interest rates change, so will the price of the units. The funds are issued in book-entry form and registered form. - fixed portfolio bonds amp preferred stocks - issue SBI redeemable units or shares of beneficial interest - min 1000 dinom - undivided interest in UTI - no need to manage - remains static - no management fees money-market mutual funds Money-market funds are normally no-load, open-end investment companies. Their portfolio consists of short-term, fixed-income securities such as Treasury bills, commercial paper, and bankers039 acceptances. Dividends on money-market fund shares are usually computed daily and credited monthly. Investors may elect to reinvest the dividends each month, thereby buying more shares. Rights of Accumulation ROA Receive ltltquantitygtgt discounts when purchasing mutual fund shares. Reduced sales charge for shares in same class. Asset allocation funds Asset allocation funds hold diversified portfolios of stocks, bonds, and money-market instruments. The percentage of the portfolio invested in each of these categories is shifted by the fund manager from time to time, often according to computer models. A non-marketable, interest-bearing U. S. government savings bond - guaranteed to at least double in value over the initial term of the bond, typically 20 years. Most Series EE bonds have a total interest-paying life that extends beyond the original maturity date, up to 30 years from issuance. Exchange-traded notes (ETNs) Exchange-traded notes (ETNs) are a type of unsecured debt security. ETNs carry issuer risk that is tied to the creditworthiness of the financial institution backing the note. These securities are not like traditional fixed-income securities since they typically do not make interest payments to investors. An investor seeking income on a regular basis would not be a suitable candidate for an ETN. The returns are linked to the performance of an index, currency, or commodity and would be suitable for investors who want to speculate on the value of an index. Most ETNs are traded on a national exchange (e. g. NYSE) which has the feature of liquidity. Therefore, an investor seeking capital appreciation has the ablity to sell when advantageous. Traded on an exchange - Investor can buy and sell every day multiple times a day - Bid Offer Mutual Fund A customer contacts her registered representative concerning the bid and offer prices of mutual funds listed in various financial publications and Web sites. Which TWO of the following statements are TRUE I. The bid price is equal to the net asset value II. The bid price is equal to the net asset value minus the redemption fee III. The offer price is equal to the net asset value plus a commission IV. The offer price is equal to the net asset value plus the sales charge a. I and III b. I and IV c. II and III d. II and IV Explanation: Incorrect. The bid price of a mutual fund is also equal to the net asset value (NAV) and is the price a customer will receive if shares are sold. It does not include the redemption fee, which may be charged when the customer sells her shares. The offer price is equal to the NAV plus the sales charge, if any, and is the price a customer pays to purchase shares of a mutual fund. The term commission is not used in the mutual fund industry as the term sales charge or sales load is used, and is built into the price the customer pays for the fund. Mutual Fund Settlement Date Mutual funds sell ex-dividend whenever the fund or its principal underwriter (sponsor) determines. The ex-dividend date for a mutual fund is usually the same day as the record date. ein. Diamonds b. ADRs c. SPDRs d. VRDOs Spiders (SPDRs) is an investment that replicates the SampP 500 Index. The product is organized as a unit investment trust and is classified as an exchange-traded fund (ETF). Diamonds are an exchange-traded fund that mirrors the performance of the DJIA. ADRs are American Depositary Receipts, which may be issued as proxies for many different types of individual foreign shares. VRDOs are variable-rate demand obligations that are a type of municipal security structured for tax-free money-market and high-net-worth investors. Non Traded REIT Nontraded REITs do not have their shares listed on an exchange and offer very limited liquidity, similar to limited partnerships. They would not be suitable for investors seeking liquidity. Both invest in various types of real estate and are subject to the same tax consequences (90 distribution on taxable income). Since they are both registered, they are required to make the same disclosures to investors. Equity mutual fund Expense Ratio The expense ratio of any mutual fund is the percentage of a fund039s assets that is used to pay its operating costs. It is determined by dividing total expenses by the average net assets in the portfolio. Thus, a fund with 500 million in average net assets and total expenses of 5 million will have an expense ratio of 1 (5 million divided by 500 million equals .01 or 1). Expense ratios typically range between .20 and 2.0 of a fund039s average net assets and must be disclosed in the fund039s prospectus. The formula is: Expense Ratio Total Expenses / Average Net Assets letter of intent (LOI) A letter of intent (LOI) enables an investor to qualify for a reduced sales charge based on the breakpoint schedule of a mutual fund, without initially depositing the entire amount required. The LOI states the investor039s intention to deposit the required money within 13 months of the inception of the letter. It may not be renewed for another 13 months. The letter of intent may be backdated for up to 90 days, but may not be extended for 90 days. Letters of intent are not binding on the investor. The investor is not obligated to contribute the additional 15,000. Investors who fail to make the additional investments are charged the amount that would equal the higher sales charge that applied to the original purchase. The fund insures that it will be able to recover the additional sales charge by withholding sufficient shares in escrow for this purpose. Sales Charge vs commission A closed-end fund trading on the NYSE has a current bid price of 21.50 and an offer price of 21.70. A customer purchasing the fund would pay: a. 21.50 plus a commission b. 21.50 plus a sales charge c. 21.70 plus a commission d. 21.70 plus a sales charge Explanation: Incorrect. The customer would pay 21.70 plus a commission. A closed-end fund is purchased and sold like any other stock traded on the NYSE. The customer would pay the offer price plus a commission or receive the bid price less a commission when selling the security. The term sales charge refers to the built-in compensation charged by an open-end (mutual fund) company when a customer buys shares of the fund. certain sector diversification ownership interest right to vote control when taxed liquidity and pricing thgoughout the day daily pricing purchased directly from fund low cost investment no management fees and less small transaction costs and custodian fees. Holding Company Depository Receipts (HOLDRs) are created by depositing securities of a certain sector (e. g. Biotech, Internet, Retail) into a trust and selling interests in the trust to investors. HOLDRs offer investors diversification similar to an Exchange-Traded Fund (ETF). Unlike ETFs, the owner of a HOLDR has an ownership interest in the shares of the companies that the HOLDR is invested in and would retain the right to vote. Once the portfolio has been created, the makeup of the portfolio will typically not change, although if a company included in the portfolio goes bankrupt or merges with another company, the makeup of the HOLDR may be altered. Investors have the ability to control when they are taxed, since they determine when to hold or sell the HOLDR. An investor in a mutual fund does not have that benefit since the portfolio manager would determine when to hold or sell the securities in the fund. Benefits also include liquidity and pricing throughout the day (i. e. they are exchange-traded) as compared to an index or sector mutual fund, which has daily pricing and is purchased directly from the fund. HOLDRs have no management fees and are considered low-cost since there are only small transaction costs and custodian fees. Simplified Employee Pension SEP IRA Plan - simpler for employer to establish and operate - Vary contributions - Does not allow the employee to make contributions. - Employer must include employees 21 or older who worked in the past three of five years. - Maximum employer contribution is 25 up to 51,000 Employee is immediately vested in the full amount Under MSRB rules, an RR is required to disclose certain information when promoting 529 plans. The RR must discuss the risks and costs involved with the different types of plans, must provide a disclaimer stating that, prior to investing in a plan, the customer should read the official statement, and must provide a disclaimer that the client should check with her home state to learn if it offers tax benefits to those who invest in its plan. There is no requirement to provide the name and contact information for the municipal securities principal who will approve the customer039s investment in the plan. defined benefit retirement plan A defined benefit plan is designed to provide employees with a fixed monthly stipend at retirement. This is generally a percentage of the employee039s salary, the exact amount of which is determined by the employee039s age and years of service. Retirement Plan annual contribution limit 401(k) plans, 403(b) plans, and 457 plans provide for tax-deferred contributions by employees up to a maximum of 17,500 and, if the individual is older than 50 years of age, another 5,500 may be contributed as a catch-up provision. The annual contribution to an IRA (traditional or Roth) is 5,500. Individuals age 50 and over are allowed to make an additional 1,000 catch-up contribution for a total maximum annual contribution of 6,500. A Keogh plan allows a maximum annual contribution of 100 of compensation or 51,000, whichever is less. This question is asking the amount deductible. The amount deductible is limited to the lesser of 20 of compensation or 51,000. A self-employed individual may make a deductible contribution of 20 of self-employed income, up to a maximum of 51,000, to a Keogh account. Twenty percent of Mr. Smith039s income (125,000) is 25,000. What is the minimum equity requirement for the short position/long position Short 30 Long 25 Securities Act of 1933 (Paper Act, Full Disclosure Act, New Issues Act, Truth in Securities Act, amp Prospectus Act) The act039s main purpose is to ensure that the investing public is fully informed about a security and its issuing company when the security is first sold in the primary market. The info must be filed with the SEC and published in a prospectus. definition Series 7: Unit 7 Definition of 039Mutual Fund039 An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets. Mutual funds are operated by money managers, who invest the fund039s capital and attempt to produce capital gains and income for the fund039s investors. A mutual fund039s portfolio is structured and maintained to match the investment objectives stated in its prospectus. Investopedia Says Investopedia explains 039Mutual Fund039 One of the main advantages of mutual funds is that they give small investors access to professionally managed, diversified portfolios of equities, bonds and other securities, which would be quite difficult (if not impossible) to create with a small amount of capital. Each shareholder participates proportionally in the gain or loss of the fund. Mutual fund units, or shares, are issued and can typically be purchased or redeemed as needed at the fund039s current net asset value (NAV) per share, which is sometimes expressed as NAVPS. definition Series 7 Flashcards sync Current Yield/Dividend Yield Self Check Chapter 7 Park MG 352DLB - Spring 2010 Self-Check Flash Cards Chapter 7 The Basics of Planning and Strategic Management Self Check Flash Cards Each slide will present a term, concept, or question. Formulate a mental response (answer). In 7 seconds a correct response will appear. Check your an Self Check Chapter 7 Chap 2 Flashcards University of Hawaii, Manoa SOC 100 - Fall 2010 Flashcardsfor Sociology100 Chapter2 SociologicalResearch CAUSALLOGIC Therelationshipbetweena conditionorvariableanda particularconsequence, with oneeventleadingtothe other. Codeofethics Thestandardsofacceptable behaviordevelopedbyandfor membersofaprofessio Chap 2 Flashcards 205syllabus2011v7 SUNY Buffalo BIO 205 - Spring 2011 BIO 205. SPRING 2011 I. CHEMISTRY FOUNDATIONS Introduction. four classes of biomolecules Stereochemistry. D/L. enzyme/substrate recognition Acids and bases Thermodynamics Polar and nonpolar molecules Kinetics and equilibrium Oxidation / reduction II. Homework7 Miami Dade PHYSICS 1025 - Summer 2011 Homework 7 1) Calculate d4 on slide2 of lecture series 2 (show your work). 2) Draw pulley systems with mechanical advantages of 1, 2, and 3 using a single system of pulleys and 4, 5, 6, 7, 8, amp 9 using a piggybacked system of pulleys. 3) Repeat the upper BIOFLASHCARDStoPRINT LSU BIO 1001 - Fall 2011 active transport the movement of materials across a membrane through the use of cellular energy, normally against a concentration gradient aquaporin a channel in the plasma membrane of a cell that is selectively permeable to water attachment protein ancho Chapter 2 accounting flashcards Quizlet Maryland ACCOUNTING ACCT 610 - Fall 2013 Chapter 2 accounting flashcards Quizlet 9/29/13 7:10 PM Chapter 2 accounting About this set Created by: Created by: mgiloi on November 30, 2011 Classes: Classes: ACCT 3040 53 terms Orde Terms Definitions The accounting equation can be stated as D. A - L Chapter 2 accounting flashcards Quizlet Physics 113030 Barrick Kent State PHY 11030 - Spring 2011 Object 1 Object 2 Sign In Join Now Study Tools Flashcards Teachers Teachers Flashcards Study Tools Good to have you back If you039ve signed in to StudyBlue with Facebook in the past, please do that again. Sign in with Facebook. There039s just one more step, Physics 113030 Barrick Chp 1 -9 flash cards DeAnza College ACCOUNTING 051A - Fall 2014 Term1 Definition1 3objectivesoffinancialaccounting is(1)usefulininvestmentandcredit decisions,(2)usefulinassessingcash flow prospects, and(3)aboutcompany resources, claimstothoseresources, andchanges inthem. Term2 Definition2 Term3 Definition3 2.)Definegene Chp 1 -9 flash cards sociology 1101 flashcards 6 per page CUNY Brooklyn SOCIOLOGY 1101 - Winter 2015 Printable Flash Cards 1 of 18 http:/flashcardmachine/print/limitflaggedincludeamptopic. Term 1 Definition 1 Term 2 Definition 2 A concept introduced by Berger and Luckmann A set of fundamental (1966), who argued that concepts, skills, and topics sociology 1101 flashcards 6 per page Chez Nous Glossary Flashcards Part 2.101-120 University of California, Berkeley FRENCH 2 - Spring 2015 srie, la TV serial series srieux/-euse serious serveur/euse server (in restaurant) service, le service, tip services, les (m.) service sector serviette (de toilette), la towel servir to servee se sentir to feel se sparer to separate se serrer la main to Chez Nous Glossary Flashcards Part 2.101-120 chp 7 mktg flashcards Quizlet IUPUI BUS M 300 - Fall 2015 From: null ltSaved by Internet Explorer 11gt Date: Fri, 05 Jun 2015 04 02 03 -0500 To: CC: Subject: chp 7 mktg flashcards Quizlet Quizlet Search Quizlet Create a Set Log In Log In with Google Log In with Facebook or Username Password Keep me logged in For chp 7 mktg flashcards Quizlet Theory Review Exam 1 Flash Cards ASU EEE 70378 - Fall 2014 1 How you do determine if a circuit element is absorbing or supplying power to/from a circuit 2 How you do determine if a circuit element is absorbing or supplying power to/from a circuit Define the current amp voltage to satisfy the passive sign conventi Theory Review Exam 1 Flash CardsOATS Compliance FAQ C1. How do I know if I have to comply with FINRA Rules 7410 through 7470 If you have an obligation to record the time of any market event pursuant to the By-Laws or rules of FINRA you must synchronize all business clocks, including both computer system clocks and mechanical time-stamping devices used to record such times. In addition, if your firm receives and/or handles any orders in Nasdaq and/or OTC listed securities you must comply with the rules regarding OATS reporting. (Last updated 04/08/09) C3. A registered investment advisor (RIA) operates within member broker-dealer BD1 (i. e. BD1 and RIA are part of the same legal entity). RIA originates and routes orders for execution away from BD1. What are the RIAs OATS reporting obligations Because the RIA is part of the same legal entity as the member broker-dealer, orders received or originated by the RIA are subject to all applicable OATS reporting rules and the member broker-dealer must report to OATS all orders that the RIA receives or originates. If the RIA is a separate legal entity that is not a FINRA member, the RIA would not be subject to the OATS Rules. (Last updated 10/7/11) C4. My firm receives and handles orders in Nasdaq and OTC listed securities, however, all clearing activities are handled by another firm. Does my firm have to report to OATS You are required to report to OATS all of your transactions in Nasdaq and OTC listed securities. However, if you have an arrangement with a clearing firm, it is possible that the clearing firm will report order information on your behalf. (Note: You must be in the position to provide your clearing firm with information required to be reported under the rules.) The agreement to use another firm or a third party, such as a clearing firm, must be arranged by your firm, evidenced in writing, and retained by both parties to the agreement. The agreement must specify the respective functions and responsibilities of each party. Do not assume that any third party will perform reporting on behalf of your firm. (Last updated 04/08/09) C5. Can my firm contractually arrange for another firm to transmit orders to OATS Your firm can enter into a contract with one or more firms or third parties (also known as transmitting firms) under which a transmitting firm agrees to make reports to OATS on behalf of your firm. Such arrangements should clearly specify the duties of each party with respect to OATS reporting. At a minimum, a transmitting firm should: (1) represent that it is familiar with the OATS Rules and the OATS Reporting Technical Specifications (2) represent that it has completed or will complete testing, as described in the Technical Specifications (3) agree to make reports to OATS in compliance with OATS Rules and Technical Specifications, and any subsequent modifications thereto (4) agree that any records of OATS data prepared on behalf of your firm and maintained by the transmitting firm are the property of your firm and shall be surrendered promptly upon your firms request (5) agree to permit examination of any records of OATS data prepared on behalf of your firm and maintained by the transmitting firm at any time or from time to time during business hours by representatives of FINRA and to promptly furnish to FINRA or its designee true, correct, complete, and current hard copy of any or all of any part of these records (6) have processes and procedures reasonably designed to ensure compliance with OATS requirements and (7) agree to promptly notify your firm upon the occurrence of any event, including physical damage to the transmitting firms facilities or legal proceedings involving the transmitting firm that would materially affect the transmitting firms ability to make OATS reports on behalf of your firm. The agreement should also provide for disposition of any records maintained on behalf of your firm in the event that the transmitting firm is unable or unwilling to provide for the storage of your firms records. No contractual arrangement, no matter how comprehensive, will relieve a member of its responsibilities under the OATS Rules. The above provisions are merely suggestions of the types of issues that a member must consider in contracting to fulfill its OATS reporting requirements. (Last updated 02/16/99) C6. If one or more third parties (e. g. clearing firms) report order information on behalf of my firm, how much of the compliance responsibility lies with my firm and how much lies with the third parties If your firm has a reporting responsibility, it is primarily the responsibility of your firm to ensure that timely, accurate, and complete order information is reported to FINRA. If member third parties submit order information on behalf of your firm, there is some shared responsibility for the complete and accurate submission of order information by the third parties and your firm. If non-member third parties submit order information on behalf of your firm, your firm is responsible for the submissions. Your firm should have written procedures in place to ensure that the information reported for your firm is timely, accurate, and complete. Refer to C5 for suggestions of the types of issues that a member must consider in contracting to fulfill its OATS reporting requirements. Also refer to NASD Notice to Members 02-29 for additional guidance on members supervisory systems. (Last updated 06/13/02) C8. How long are we required to retain OATS data According to FINRA Rule 7440, records must be maintained in accordance with FINRA Rule 3010 and SEC Rule 17a-4(b). These rules state that OATS records must be preserved at least three years, the first two years in an accessible place. Records are not required to be retained in an electronic format they may be retained in paper or microfiche formats. (Last updated 04/08/09) C9. How will I have the time to perform business functions and send order information to OATS In general, business can proceed as usual for example, the OATS Rules do not change the amount of time allowed to write a customer order ticket or perform order processing. The rules do require that the business clocks firms use to record the times of market events be synchronized and that the times of OATS reportable events be recorded using hours, minutes, and seconds. (Last updated 07/06/98) C10. Does the 10-second Rule apply to OATS reporting No. The 10-second Rule is a trade reporting rule. OATS is not a real-time system. Although order information may be transmitted to OATS at any time, including during or after market hours, it is not required to be submitted until 08:00 (8 a. m.) Eastern Time the following calendar day (Last updated 11/07/13) C11. Do I have only 3 seconds to record order information No. The OATS Rules do not change the amount of time allowed to write a customer order ticket or perform order processing. (Last updated 07/06/98) C12. My firm is not required by FINRA rules or By-Laws to record the date and time of market events. Are we required to synchronize our business clocks No. Only FINRA member firms with an obligation under FINRA rules or By-Laws to record the time of a market event must synchronize their business clocks. For example, firms that only sell mutual funds and have such an obligation only under SEC rules or related guidance to record the time of market events are not required to synchronize their business clocks. (Last updated 11/03/98) C13. My firm is required by FINRA rules to record the date and time of market events, but we do not accept orders for Nasdaq or OTC listed securities and have no OATS reporting responsibilities. Are we required to synchronize our business clocks Yes. All FINRA member firms with an obligation under FINRA rules or By-Laws to record the time of a market event must synchronize their business clocks. (Last updated 04/08/09) C14. Do the OATS Rules allow us to continue to write the time on order tickets or are we required to purchase mechanical time clocks Under the OATS Rules you may continue to use handwritten timestamps. However, a firm that uses handwritten timestamps must be confident that it is complying with the OATS Rules and all other FINRA rules or By-Laws. This includes referencing a synchronized clock and recording hours, minutes, and seconds when writing timestamps for OATS reportable events. (Last updated 07/17/98) C15. What time am I supposed to report as order receipt time when I receive a customer order on the golf course The time that the member records as the time of receipt for purposes of satisfying SEC Rule 17a-3(a)(6) is the time the firm should record as the OATS order receipt time. The order receipt time required to be recorded pursuant to SEC Rule 17a-3(a)(6) will always be the time of receipt for OATS reporting purposes. (Last updated 03/28/06) C16. My firm is not a market maker in any Nasdaq or OTC listed security however, we sometimes trade in these securities for our proprietary accounts. Are we required to report these proprietary trades to OATS Yes, the only types of orders for Nasdaq and OTC securities that are not subject to OATS reporting requirements are orders originated by a trading desk in the ordinary course of a members market making activities. (Last updated 09/08/98) C17. My firm receives orders for listed, National Market (NMS), and SmallCap securities on any given day. Will FINRA provide a list of the issues that must be reported to OATS Orders for any Nasdaq security must be reported to OATS. A file containing Nasdaq symbols can be downloaded from nasdaqtrader. The Symbol Directory is updated daily at 2 a. m. and reflects issues as of the beginning of the prior business day. (For example, the Symbol Directory that is updated at 2 a. m. on Wednesday reflects the issues as of the beginning of Tuesdays market day.) Any changes to the Symbol Directory between the time it is posted and about 2 p. m. the following day are reflected in the Daily List, which is updated daily at approximately 2 p. m. The Daily List is available via FTP or the Web. (Last updated 04/08/09) C18. My firm operates a convertible bond department. Does my firm have to report information to OATS about orders in convertible bonds The OATS Rules apply to orders in Nasdaq Stock Market equity securities. Section 3(a)(11) of the Securities and Exchange Act of 1934 and SEC Rule 240.3a11-1 define equity security as any security convertible into stock or a similar security. Convertible bonds can be converted into equity securities. Therefore, orders for convertible bonds listed on Nasdaq are subject to OATS reporting. (Last updated 11/03/98) C19. My firm often receives and handles orders for Initial Public Offerings (IPOs) and secondary distributions. Are these orders reportable to OATS No, orders received by member firms as part of an IPO or secondary distribution are not subject to OATS reporting. (Last updated 09/08/98) C20. I use several electronic order routing and executing systems. Am I allowed to use more than one third party to transmit data to OATS on my behalf Yes. More than one third party may transmit order events to OATS on behalf of your firm. Firms are responsible to ensure that all required information is submitted to OATS and that the third parties do not send duplicate information to OATS. Be aware that some third parties may believe they are reporting on your behalf. Ensure that you have clearly defined agreements covering OATS reporting responsibilities with all parties that handle your order data and that you communicate the responsibilities with all parties that handle your order data. If the parties reporting on your behalf transmit duplicate reports (for example, if a clearing firm and a service bureau both transmit an Execution Report for the same order), only the first report will be accepted by OATS. All subsequent reports will be considered duplicates and will be rejected. (Last updated 11/03/98) C21. My firm deals only in mutual funds. Do we need to synchronize our business clocks, as specified in the OATS Rules No. Firms that deal only in mutual funds and have no obligations under FINRA rules or By-Laws to record the time of a market event have no requirement to synchronize their business clocks. (Last updated 09/08/98) C24. Can I assume that my clearing firm will perform all of my OATS reporting No. Do not assume that any third party, including your clearing firm will perform your OATS reporting. Contact your clearing firm directly to determine the role it will play in OATS reporting. You must have a contractual agreement with any third party to report OATS data on your behalf. It is your responsibility to report the required data to OATS. If your clearing firm does not agree to perform OATS reporting for you by the appropriate implementation date, you are required to obtain an alternate method for reporting to OATS. (Last updated 11/03/98) C26. How do I determine the proper order receipt time for an order The time that the member records as the time of receipt for purposes of satisfying SEC Rule 17a-3(a)(6) is the time the firm should record as the OATS order receipt time. The order receipt time required to be recorded pursuant to SEC Rule 17a-3(a)(6) will always be the time of receipt for OATS reporting purposes. (Last updated 03/28/06) C27. Do OATS reporting requirements apply to orders for Nasdaq equity securities placed by option market makers on exchange floors Yes. The OATS Rules apply to orders for Nasdaq equity securities created or routed by a firm on an exchange floor. (Last updated 11/06/98) C28. We would like to buy software that will allow us to create and transmit our own OATS reports. Can you provide us with a list of vendors FINRA is aware of several companies that have developed software that will allow you to create and transmit OATS reports that are compliant with the requirements in the OATS Rules and in the OATS Reporting Technical Specifications. Contact the FINRA Business and Technology Support Services to obtain a list of these companies. Hinweis . FINRA does not recommend or endorse any manufacturer, vendor, or product, nor will it receive any consideration as a result of providing the information about any such manufacturer or vendor. When FINRA becomes aware of other companies that provide services to help members meet the requirements of the OATS Rules, they will be added to the list maintained by FINRA Business and Technology Support Services. (Last updated 11/03/98) C29. Are my reporting responsibilities different if I use a member firms electronic order handling or execution system versus a non-member firms system Yes. For non-market makers: If you use a member firms electronic order routing or execution system to route orders for execution by that same member firm, you are not required to report the order events to OATS until Phase 3. If you use an electronic order routing or execution system provided to you by your clearing firm to route orders directly to the clearing firm for handling, that order is reportable in Phase 2 by the clearing firm and in Phase 3 by the order entry firm. If you use an electronic order routing or execution system provided to you by your clearing firm to route orders directly to other market centers for execution, that order is reportable in Phase 2 by the order entry firm. If after an order is executed, you enter the order data into an electronic system for clearance and settlement, you are not required to report the order events to OATS until Phase 3. If you enter orders for handling or execution in a non-member entitys electronic system (i. e. service bureaus electronic system) for routing or execution to another member firm for handling or execution, you are required to report order events to OATS in Phase 2. If you use a non-member entitys software or electronic program to interface with, or to transmit orders to, a member firms electronic system for handling or execution, you are required to report order events to OATS in Phase 2. For market makers: If you receive any orders via an electronic order handling or execution system at the trading desk, you are required to report the order events to OATS in Phase 1. If you capture any orders via an electronic order handling or execution system at the trading desk, you are required to report the order events to OATS in Phase 1. If, after an order is executed, you enter order data into an electronic system for clearance and settlement, you are not required to report the order events to OATS until Phase 3. (Last updated 04/21/05) C30. If I receive an order when I am outside of my office, do I have to immediately reference a synchronized clock and record the time of receipt The time that the member records as the time of receipt for purposes of satisfying SEC Rule 17a-3(a)(6) is the time the firm should record, referencing a synchronized clock, as the OATS order receipt time. The order receipt time required to be recorded pursuant to SEC Rule 17a-3(a)(6) will always be the time of receipt for OATS reporting purposes. (Last updated 03/28/06) C31. If a money manager who has discretion over 10 customers accounts places a bunched order with me for 10,000 shares (i. e. he will distribute the shares among those accounts), how many New Order Reports am I required to send to OATS You are only required to report the single order that you received from the money manager therefore, you would only be required to send one New Order Report to OATS for this transaction. Hinweis . Because it was the money manager that bunched the order, you would not indicate in any OATS report that the order was bunched. (Last updated 11/23/98) C32. If a registered representative who has discretion over 10 customers accounts places a bunched order with the trading desk for 10,000 shares (i. e. he will distribute the shares among those accounts), how many New Order Reports should we send to OATS You are only required to report the single order originated by the registered representative therefore, you would only be required to send one New Order Report to OATS for this transaction. Hinweis . Because the registered representative had discretion and bunched the order upon origination, you would not indicate in any OATS report that the order was bunched. (Last updated 11/23/98) C33. If a registered representative receives 10 orders for a total of 10,000 shares and bunches these orders before transmitting them to the trading desk, how many New Order Reports should we send to OATS Since the registered representative did not have discretion in the accounts, but instead received orders for these accounts, each order must be reported separately therefore, you would be required to send 10 New Order Reports to OATS. (Last updated 11/23/98) C34. We occasionally receive orders for our employees accounts. Sometimes we also receive orders for the accounts of our employees family members. Should Account Type Code E be used for both types of orders No. Account Type Code E should only be used for orders received for your employees accounts, not for orders received for the accounts of your employees family members. The family members orders would likely be classified as Account Type R (retail). (Last updated 02/16/99) C35. Many of our customer orders are routed to an ECN. Although the orders are market orders, they are required to contain a limit price. Our trader modifies the limit price on the orders, as market conditions require, to obtain the best price for the customer. In a fast-moving market, the trader may modify the order many times over a short period. Are we required to submit an OATS report for each of these modifications If the modifications to the order are requested by your trader and not by the customer, and if the ECN is reporting each of them to OATS, you are not required to report them to OATS. However, your firm must report all customer-requested modifications to an order by filing a Cancel/Replace Report for each of the modifications. (Click here for additional information.) (Last updated 02/16/99) C36. Do the OATS Rules supersede Rule 17a-3 The OATS Rules (FINRA Rules 74107470) are independent from SEC Rule 17a-3. Thus, firms must comply with both sets of rules. Both OATS Rules and SEC rules allow firms to store records in manual or electronic forms, such as microfiche, paper, and computer disk. (Last updated 04/08/09) C37. I work for a FINRA member firm that is located in Germany. Are we required to synchronize our clocks and report orders for Nasdaq securities to OATS Yes. All FINRA member firms, including all member firms located outside the United States, must comply with FINRA Rules 7410 through 7470, including submitting applicable order information to OATS, recording times in seconds for OATS reportable events, and synchronizing clocks. For additional information, refer to the OATS Reporting Technical Specifications. (Last updated 04/08/09) C38. Are we required to retain our OATS data in a format that could be resubmitted to OATS No. According to FINRA Rules 3010 and 7440 and SEC Rule 17a-4(b), you are only required to retain the data itself in a format that it could be retrieved upon a compliance request. You are not required to retain the data in an electronic format that could be submitted to OATS (such as in ROE format), nor are you required to retain header and footer information. In addition, you are not required to store the data in an electronic system it could be stored on paper or microfiche. (Last updated 04/08/09) C39. Should Account Type Code E be used for orders received from former or retired brokers of my firm or another firm No. Account Type Code E should only be used for orders received for your employees accounts, not for orders received for the accounts of former or retired brokers of your firm or any other firm. These orders would likely be classified as Account Type R (retail). See C34. (Last updated 03/02/99) C40. I am a market maker. I either receive orders via an electronic system or I put orders directly into such a system immediately after I receive them. Sometimes I have an order that I do not execute using the electronic system. Instead, I call another member firm and execute the order over a phone. What order reports am I required to file for such an order You would be required to file a New Order Report when the order was received at your firm, regardless of whether it was received or captured manually or in an electronic system. If you transmitted the order to a member firm or a non-member for handling or execution, you did not direct it to another desk within your firm, and the terms of the order did not change, the only other report you would be required to file would be a Routing Report. This Routing Report is required, regardless of whether the transmission was electronic or via some manual means (e. g. the telephone). (Last updated 04/08/09) C41. When is a Terminal ID or Department ID required Terminal or Department ID, which is the identification of any terminal or department where an order is received directly from a customer, is required for orders electronically captured (i. e. electronic orders), regardless of the method of order receipt. (Last updated 05/07/99) C42. How do the OATS Rules apply to introducing firms If you have an obligation to record the time of any market event pursuant to the By-Laws or rules of FINRA, you must synchronize all business clocks, including both computer system clocks and mechanical time-stamping devices used to record such times. In addition, the reporting portion of the OATS Rules applies to all firms that receive or handle any orders in Nasdaq and OTC listed securities. These rules require you to report information about orders in Nasdaq and OTC listed securities to FINRA and record the time of all OATS reportable events in hours, minutes, and seconds. You can develop a system to transmit this order information to OATS or contract with one or more third parties to provide this service. For additional information read FINRA Rules 7410 7470 andthe OATS Reporting Technical Specifications. (Last updated 04/08/09) C47. Some of our employees control the accounts for charitable trusts or foundations. Should Account Type Code E be used for orders for these accounts No. Account Type Code E should only be used for orders received for your employees accounts, not for the orders for such accounts. Orders for these accounts would likely be classified as Account Type R (retail). See C34. (Last updated 05/07/99) C48. We route some of our orders using ACES Pass-Thru. Are these orders considered manual or electronic If you enter the orders directly into a Nasdaq Workstation, the orders would be considered manual. If the orders are routed into ACES Pass-Thru via an electronic order handling system, the orders would be considered electronic and a Routed Order ID must be passed through via the Branch/Sequence Number field in ACES. (Last updated 06/13/02) C50. When my firm receives orders from other broker/dealers, we do not receive all of the special handling details that may have been associated with the original customer order. How can we report these special handling details You are not required to report the special handling details associated with the original customer order. You are only required to report the order information that you receive from the broker/dealer. Thus, if you receive a wholesale order, you are only required to report any special handling requested by the sending broker/dealer. (Last updated 05/07/99) C51. If I place an order on an ECNs terminal, can I assume that the ECN will report the order to OATS on my behalf No. You are required to report to OATS all of your order events in Nasdaq and OTC listed securities. The ECN is required to report all orders it receives. It has no obligation to report orders on behalf of firms that use its terminal to execute orders. The agreement to use any third party for reporting to OATS must be arranged by your firm, evidenced in writing, and retained by both parties to the agreement. The agreement must specify the respective functions and responsibilities of each party. Do not assume that any third party will perform reporting on behalf of your firm. (Last updated 04/08/09) C52. How can I obtain information about how well our Execution Reports match with our trade reports Your firms Order Trade Matching Statistics are available via the OATS Web Interface located at firms. finra. org. (Last updated 3/26/13) C53. Are we required to report Buy/Write orders involving Nasdaq securities to OATS You must report the stock purchase portion of a Buy/Write order involving Nasdaq securities as a Pegged order. Thus, you would be required to report a New Order Report for the order with a Special Handling Code of PEG. If you executed the order, you would be required to submit an Execution Report for the order if you sent the order to another firm for execution, you would be required to submit a Routing Report for the order. If you do not direct the order to another desk within your firm, and the terms of the order do not change, you would not be required to file any other order reports. (Last updated 10/06/00) C54. Are we required to report options assignments in Nasdaq securities No. Options assignments (the exercise of options contracts in Nasdaq securities) are not orders, as defined by the OATS Rules therefore, you are not required to report them to OATS. (Last updated 05/07/99) C55. I filed an As-Of trade report and a matching Execution Report in OATS. Why was my Execution Report marked late The Execution Report was marked late because it was transmitted to OATS after 5 a. m. the following calendar day without the Rejected ROE Resubmit Flag set to Y. (Repairs made via the OATS Web Interface automatically default the Rejected ROE Resubmit Flag to Y.) (Last updated 04/08/09) C56. When I repaired my rejected records and resubmitted them, they were marked late. Why The repaired records were marked late because they were transmitted to OATS after 5 a. m. the following calendar day without the Rejected ROE Resubmit Flag set to Y. (Repairs made via the OATS Web Interface automatically default the Rejected ROE Resubmit Flag to Y.) (Last updated 9/14/07) C57. When I receive an order electronically from another firm, must I report the Routed Order ID to OATS in the exact format in which I received it Yes. Routed Order IDs must be reported in the same format in which they were received or the audit trail will be broken. For instance if a firm routes an order with a Routed Order ID of AB0001, the receiving firm must also indicate a Routed Order ID of AB0001. In this instance, a Routed Order ID of AB001, AB001 or anything other than the exact format of the original Routed Order ID will cause the audit trail to break. (Last updated 06/04/99) C58. Recently my firm had a ROE rejection of an OATS Execution Report for the following reason: Execution Report is for an order that does not exist in OATS. We checked our records and found that the order was more than a year old and that we did transmit the New Order Report and it was accepted by OATS. Can this reject be repaired OATS maintains open GTC, GTD and GTM orders in a file for two years. After two years the ROE is removed from the active file. When this occurs, any subsequent order events including execution reports, cancel reports, cancel/replace reports and route reports will be rejected for (order event type) Report is for an order that does not exist in OATS. Member firms should submit a duplicate New Order Report and any rejected subsequent order events, each with the Rejected ROE Resubmit Flag set to Y. (Last updated 04/08/09) C59. When we effect a riskless principal trade and use the alternative method of trade reporting are we required to match the trade report to the OATS Execution Report A. Yes. When using the alternative approach to riskless principal trade reporting, firms should match the OATS execution report to the non-tape, non-clearing or clearing-only report submitted to the trade reporting facility by including the Branch/Sequence number on those reports. If your firm is using the original approach to riskless principal trade reporting, the reporting exception code R for riskless principal trades should be used when submitting the OATS execution report. (Last updated 04/08/09) C61. If I electronically route an order to NASDAQ or another trading venue and that order is immediately rejected, am I required to report an OATS Route Report for the rejected order No. If you electronically route an order and that order is immediately rejected (i. e. it is not accepted by the trading venue) then the firm is not required to report the route in an OATS Route Report. However, if the firm re-transmits that order and the re-transmitted order is accepted, a Route Report must be recorded and reported to OATS. (Last updated 9/14/07) C62. How should agency orders executed on an average price basis be reported to OATS When executing an agency order on an average price basis, members are required to show receipt and execution of the customer order by reporting a New Order Report and a single Execution Report to OATS. The execution time field of the Execution Report should be populated with the time at which the average price of the agency execution was determined. Members should populate the Reporting Exception Code on the OATS Execution Report with A - Agency Average Price to reflect that the report cannot be matched to a trade report. Specifically, a firm is required to report an Execution Report as described above when the following conditions are met: The customer specifically requests the order to be worked on an average price basis Individual street side executions go into a firm owned/controlled allocation account used for all customer orders worked by the firm The customer is given a single fill/execution from the average price allocation account at the average price Members and reporting agents should note when handling an order on an average price basis, only the new order and single average price execution should be reported to OATS. No Route Reports should be submitted when reporting an agency average price order as described above. See also the OATS Report entitled FINRA Guidance on OATS Reporting Obligations When Handling Orders on an Agency Basis published on April 29, 2009 for additional guidance concerning the reporting requirements for agency orders. (Last updated 06/29/09) C63. If my firm accepts IOC (Immediate or Cancel) or FOK (Fill or Kill) type orders, is it required to submit an OATS Cancel Report for the order if it is either partially or not immediately filled in the instance of an IOC or a non-fill in the instance of an FOK No. An IOC order by definition is subject to an immediate partial or full execution. Otherwise, it is automatically partially or fully cancelled. An FOK order by definition is subject to either an immediate execution or immediate cancellation. Therefore, it is inappropriate and unnecessary to submit to OATS a Cancel Report for an order with instructions to be handled as IOC or FOK. (Last updated 03/17/04) C67. My firm receives orders where the customer instructs the firm to buy as much stock as possible for a specific dollar amount (e. g. 1,000) over the course of the day. These orders are commonly referred to as cash orders. How should these cash orders be reported to OATS Beginning with the OATS 1Q05 quarterly release, these orders should be reported to OATS with a special handling code of CNH denoting Cash Not Held (until the 1Q05 release goes into production, firms should use the NH special handling code). Additionally, they must be reported to OATS with a shares quantity equal to the number of shares that could be purchased with the specified dollar amount based on the best available market at the time of order receipt. For example, if a firm receives a cash order for 1,000 when the best available market is 20, then the firm must report a shares quantity of 50 in the New Order, Combined Order/Route or Combined Order/Execution Report. Firms need not submit a Cancel/Replace report to reflect a change in share quantity due to market fluctuations during the life of the order. However, if a customer changes the dollar amount, then a Cancel/Replace Report must be submitted to reflect that change. C68. Sometimes my firm will route an order to a market-maker or market center that, for one reason or another, rejects the order. Do I need to reflect this attempted route by submitting a Route Report No. If your firms order is rejected by a market center, then the order is not considered to have been routed for OATS purposes. Therefore, the firm need not submit a route report to OATS to show the attempted route. Firms must however, submit a route for any subsequent route to another market center that is subsequently accepted by the receiving market center. C69. My firm receives OATS reportable orders from four separate customers totaling 10,000 shares, all with instructions to handle as agent. My firm sends one larger order, properly marked as agency, to the Nasdaq Exchange or another market center in an attempt to obtain an execution for these four orders. My firm holds the individual customer orders and never gives up control of these orders to any other broker-dealer or market center. Upon receipt of an execution of the larger order, the shares are recorded in my firms agency allocation account. Subsequently, my firm allocates the shares from the agency allocation account to the individual customer accounts based upon a predetermined allocation methodology. How should these orders and related executions be reported to OATS The four customer orders were not routed outside of the member for execution, and were not executed until the firm allocated shares from its agency allocation account. In this case, the member should report a New Order Report and Execution Report with a Reporting Exception Code of T for each individual customer order to denote that the execution represents an agency post trade allocation and will not match to a related trade report. The Execution Time field on the Execution Report should reflect the time the shares were allocated to each individual customer account. A Route Report for each customer order should not be reported in this scenario since the member did not route the order away for execution and the individual customer orders were not executed until the shares were allocated to the specific customer accounts. C70. A money manager with discretion over multiple accounts places an OATS reportable bunched order with my firm for 10,000 shares. The trader executes this 10,000 share order either as principal or routes it to another market center for execution. When the order is executed, my firm communicates this information back to the money manager, who then allocates the execution(s) on an average price basis to various sub accounts. How should I report the money managers order and subsequent sub account allocations to OATS The firm received instructions from the money manager to work an order for 10,000 shares (representing multiple orders bunched by the money manager). In this case, the firm must report a New Order Report to OATS for 10,000 shares. The individual orders that were aggregated by the money manager should not be reported to OATS as separate new orders. (See FAQ C31) Further, any post trade allocations made by the money manager to its sub accounts should not be reported to OATS by the firm. The firm should, however, report the bunched new order from the money manager and any related routes or executions that result from the firms efforts to fill the money managers bunched order. For example, the firm would submit a New Order Report for 10,000 shares upon receipt of the order from the money manager. If that order were filled by routing 5,000 shares to an ECN, executing 3,000 shares as principal and then routing the remaining 2,000 shares to the Nasdaq Exchange, the firm would submit to OATS a Route Report to the ECN for 5,000 shares, an Execution Report for 3,000 shares representing the proprietary fill, and a Route Report to the Nasdaq Exchange for the remaining 2,000 shares. No further OATS reporting by the firm would be required when the money manager makes the sub account allocations. C71. My firm is a FINRA member based in Canada. We receive orders for securities that are listed on both the Toronto Stock Exchange and the NASDAQ Stock Market. We execute all of these orders on the Toronto Exchange. Are these orders reportable to OATS Yes. All orders received by FINRA members in NASDAQ listed equity securities are subject to the OATS Rules regardless of where executed. If the order is sent to the Toronto Stock Exchange for execution, the member is required to report the receipt of the order and the route to the exchange. All prices must be converted into U. S. dollars based on the conversion rate applicable at the time of the transaction. C72. Are clearing related transactions such as Prime Broker, Step Outs, CNS flips etc, OATS reportable No. The definition of an order pursuant to NASD Rule 6951(j) would not include any back office or clearing related transactions that serve only to facilitate the clearance and settlement of a previously executed transaction. Therefore, these types of clearing-related transactions are not subject to the OATS Rules. C73. FINRA has specified that the new Special Handling Code of OPT, which becomes effective September 11, 2006, should be used for orders where the terms and conditions of the order are derived from a related options transaction. Can FINRA offer more specific guidance regarding the appropriate use of this code For example, would this be appropriate for buy/writes or option exercises and assignments FINRA intends the Special Handling Code of OPT to be used in instances involving a combination trade in which the cash leg is the second leg of the transaction and the terms and conditions of the cash order are contingent upon the related option trade. In other words, the OPT code is appropriate when the price or size of a cash order is contingent upon a related option trade. The code is not intended to be used in conjunction with option exercises or assignments, which do not constitute OATS reportable events (See FAQ C54). The code would only be appropriate for a buy/write if, as explained above, the terms and conditions of the cash order were contingent upon the related option transaction. C74. If a. R transaction represents an event subject to the Order Audit Trail System (OATS) Rules, is the transaction report submitted to a FINRA trade reporting system with a. R modifier required to be matched to the related OATS Execution Report submitted to OATS Yes. Members are required to link the. R transaction report submitted to a FINRA trade reporting system to the related OATS Execution Report. Members should reference the OATS Technical Specifications for the applicable matching criteria. C75. Are Combination Reports (Combined New Order/Route and Combined New Order/Execution) required for manual orders No. Manual orders are exempt from the mandatory use of Combination Reports set forth in Notice to Members 04-46 . C76. Are indications of interests or negotiations reportable under the OATS Rules No. Indications of interest and negotiations are not considered reportable events under the OATS Rules. Indications of interest are never reported. A negotiation is not considered to be a reportable event until both parties agree to the terms of a trade. After the terms of the trade are agreed to, a new order report and execution report must be reported to OATS. The New Order should be reported from your firms perspective and contain a Negotiated Trade Flag of Y. NOTE: For orders negotiated through OTC Link, please refer to the OATS for OTC FAQs regarding OTC Link. C77. My firm provides both sponsored access and direct market access to non-FINRA member clients. Is my firm responsible for any OATS reportable events associated with these clients access Yes. As a general matter, FINRA considers a firm to be the executing broker in any transaction where its client (either a customer or a non-NASD member broker/dealer client) is only able to effect the trade by virtue of the firms membership with the applicable market center. Thus, if a client would not be able to effect trades without the use of a FINRA members assigned MPID, that FINRA member is responsible for reporting the necessary information to OATS. For the OATS reporting obligations in scenarios where a member provides another FINRA member a smart order router or other order routing services, please refer to Scenario 4.4.21 in the OATS Reporting Technical Specifications. C78. Are there any Order Audit Trail System (OATS) reporting obligations for NASDAQ securities relating to Regulation NMS Yes. For orders subject to the OATS Rules, members will be required to identify on the applicable OATS report the receipt and routing of an ISO. Specifically: 1. A new Special Handling Code of ISO has been added to the New Order Report, Combined Order/Route Report, Combined Order/Execution Report and Cancel/Replace Report to reflect the receipt of an ISO by a trading center and 2. A new Routing Method Code of I will be added to the Route Report and Combined Order/Route Report to identify orders, or portions of orders, that are routed to another trading center and identified to such trading center as an ISO. The ISO Special Handling Code for trading centers receiving an ISO will be mandatory on July 9, 2007, the Pilot Stocks Phase Date under Regulation NMS. FINRA has filed a proposed rule change with the SEC to establish the new Routing Method Code.25 If the rule change is approved, the Routing Method Code I for members routing ISOs to other trading centers will be available on June 11, 2007, but will not be mandatory until February 4, 2008. This will provide firms with additional time to program for the new code. For illustrative purposes, the following are examples of the applicability of these new OATS codes: Example 1: ISO Special Handling Code: An ADF trading center is displaying a protected quotation in the ADF. Another broker-dealer wishes to access this protected quotation by routing an ISO to execute against its full displayed size, as required by SEC Rule 611(b)(6). This broker-dealer therefore routes an ISO to the ADF trading center to access the protected quote. OATS reporting obligations of the ADF trading center in Example 1: The ADF trading center must submit to OATS: (1) a New Order Report with a Special Handling Code of ISO to reflect the receipt of an order and (2) an Execution Report reflecting execution of the routed ISO, if applicable. Example 2: I Routing Method Code: A member firm intends to utilize the ISO exception to the trade-through rule to obtain executions for an order that it has received from its customer. To satisfy its obligations under SEC Rule 611, the member firm routes ISOs, which it chooses to send on an agency basis, to execute against the relevant protected quotations. OATS reporting obligations of the member firm in Example 2: The member firm must submit to OATS: (1) a New Order Report reflecting receipt of the order from its customer (2) a Route Report for each ISO sent, on an agency basis, to another trading center with a Routing Method Code of I and a Destination Code reflecting the specific exchange or trading center to which the order was routed and (3) to the extent that the member routed the ISOs, on an agency basis, with the intent of executing on a principal basis the balance, if any, of the customer order not satisfied by the routing (and subsequent execution, if any) of such ISOs, an Execution Report to reflect the execution of the balance of the block order with its customer. C79. My firm receives an order to buy 10,000 shares of an OATS-reportable security. 5,000 shares of this order are executed. Subsequently, the customer requests to cancel the remaining 5,000 shares. Is the subsequent cancellation of the remaining 5,000 shares considered a full or partial cancellation for OATS reporting purposes For OATS purposes, this would be considered a partial cancellation. Specifically, the firm should submit a Cancel Report to OATS containing a Cancel Type Flag P (partial) with a Cancel Leaves Quantity of zero. The Cancel Type Flag of F (full) should be used only when a customer cancels an order in full (i. e. the Cancellation Quantity is the same as the original order Shares Quantity). C80. If my firm is undergoing an organizational change (e. g. a merger, acquisition, or succession), what are my obligations with respect to OATS Firms undergoing an organizational change need to ensure that reporting relationships are properly established in OATS so that there are no interruptions in a firms ability to report to OATS upon the completion of the transaction. For general guidance on a variety of topics, including OATS, regarding organizational changes, firms may refer to information on our Site. Firms undergoing organizational changes should pay particular attention to open limit orders that were established prior to the completion of any transaction. If the predecessor firm has open limit orders on its books that will be executed under the successor firms MPID, the firm should route the orders to the new MPID, and report the route to OATS, or provide the predecessors MPID in the Mergers amp Acquisitions Administration field on the OATS report. If the predecessor firm has open limit orders on its books that will be executed using the predecessor firms existing MPID, but with the existing MPID now assigned to the successor firms broker/dealer number, the firm must contact FINRAs Market Regulation OATS Department at (240) 386-5126 prior to the completion of the transaction so that any open limit orders can be properly assigned to the successor firm. C81. My firm receives and executes orders that may exceed 100 million shares. The OTC Trade Reporting Facility (ORF), however, will not accept trades that exceed 99,999,999 shares. Therefore, a trade exceeding 99,999,999 shares must be reported to the ORF in two or more transaction reports. Can a single OATS Execution Report be matched to more than one ORF trade report Yes. The OATS order/trade matching process will allow a single OATS Execution Report to match to more than one trade report provided that the execution time, branch/sequence number, MPID and issue symbol on all related trade reports are identical to those reported on the OATS Execution Report. C82. How should Exchange for Physicals (EFP) transactions be reported to OATS Like a negotiated transaction, both the buyer and seller of the reportable security in an EFP transaction would have an obligation to report New Order and Execution Reports (or Combined Order/Execution Reports) at the time the transaction occurs. The New Order Report should contain the Special Handling Code of E. W to identify it as an EFP. Finally, if the contra party on the trade report is not able to enter a branch/sequence number due to system constraints, they may use a Reporting Exception Code of M. C83. My firm accesses certain market centers through sponsored access relationships with other FINRA members. What are the OATS reporting obligations for both members in these scenarios With respect to the members OATS reporting obligations, when two members have entered into a sponsored access agreement whereby one member sponsors the other member into a specific market center (such as a national securities exchange) by providing use of the sponsoring members MPID, both members have separate and distinct OATS reporting obligations. For example, if FINRA member ABCD sponsors access into a national securities exchange for FINRA member EFGH, the OATS reporting obligation for each firm would be as follows: Sponsored Member EFGH (under the MPID of EFGH) New Order Report Route Report indicating order was routed to ABCD Sponsoring Member ABCD (under the MPID of ABCD) New Order Report indicating the order was received from member EFGH Route Report indicating order was routed to a national securities exchange The OATS reporting obligations outlined above are the same regardless of the type of connection used by the sponsored member to access the applicable market center. For example, the OATS reporting obligations for each member would be the same whether the sponsored member used a direct market connection provided by the sponsoring member, a third party service provider connection provided by the sponsoring member, or its own proprietary connection to the subject market center. C84. I have an order which was executed on an agency average price basis and was worked simultaneously with other orders with the executed shares being allocated to each individual order on a post trade basis. Should I use the Reporting Exception Code of A for Agency Average Price or the Reporting Exception Code of T for Post Trade Allocation If the execution of an order meets the criteria for both the A and T Reporting Exception Codes, the Reporting Exception Code of T should be used. C85. Pending SEC approval of the new rule changes, how would the new requirement to provide the price on Route Reports impact orders executed on an agency average price or a post trade allocation basis Will there be any new requirements for these type of orders No. The new requirement to provide the price on Route Reports would not change any of the reporting requirements for orders handled on an agency average price or post trade allocation basis. Those orders should continue to be reported in accordance with the guidance set forth in current relevant FAQ, OATS Reports and OATS Reporting Technical Specifications. C86. How should the Routed Order Type Indicator be populated for orders routed as Stop or Stop Limit orders Orders routed as Stop orders should be reported with a Routed Order Type Indicator of M (Market Order). OATS will derive the Stop information from the related originating or receiving firms New Order Report, as applicable. Orders routed as Stop Limit orders should be reported with a Routed Order Type Indicator of L (Limit Order) and the price should be populated with the Stop Limit price. C87. How should the Routed Order Type Indicator be populated for orders routed with special handling instructions that may include certain pricing criteria, but are not routed with a specific limit price such as PEG orders or options related orders Any order routed without a specific limit price, such as a PEG or options related order, should be reported with the Routed Order Type Indicator populated with M (Market Order). OATS will derive that the order is a PEG or options related order from the Special Handling Code on the related originating or receiving firms New Order Report, as applicable. C88. Can an order be marked as Short Exempt in the Short Sale Indicator field on the OATS Route Report if the order was reported as a regular short sale on the related New Order Report Yes. If a firm receives a Short Sale order prior to the triggering of a circuit breaker, the firm would populate the Buy/Sell Code with SS (Short Sale). If, at the time the order is routed, a circuit breaker is triggered, the order may be marked short exempt consistent with SEC Rule 201, and the Short Sale Exempt Indicator on the related OATS Route Report must be marked with a Y. C89. Once the MPID requirement for ATSs becomes effective on February 2, 2015, what are the OATS and trade reporting requirements for orders received directly at an ATS as well as orders routed to an ATS from another department of the firm operating ATS Please see the ATS OATS and Trade Reporting guidance that became effective February 2, 2015. This guidance will supersede the guidance contained in the OATS Report entitled FINRA Guidance on OATS Order Trade Matching Obligations for Orders Matched as Agent by a Member, including an ECN or ATS. C90. At 8:30:00 a. m. Member BD1 receives a market-on-open customer order and guarantees the opening price. At 9:30:00 a. m. the market opens, and at 9:35:00 a. m. BD1 receives the opening price information and executes the trade. What execution time should be used in the OATS Execution Report and related trade report A. For OTC equity securities, pursuant to amendments effective November 17, 2014, the time of execution must be reflected on both the ORF trade report and the related OATS Execution Report in the Execution Time field. The reference time of 9:30:00 a. m. must be included in the ORF trade report in the Trade Modifier 4 Time Field and is not required to be reported to OATS. FINRA will obtain the reference price from the ORF trade report. For NMS stocks, the reference time of 9:30:00 a. m. must be reflected in the Execution Time field on both the OATS Execution Report and related TRF/ADF report. When amendments related to the reference time become effective for the ADF/TRFs on July 13, 2015, the time of execution must be reflected on both the TRF or ADF trade report and the related OATS Execution Report in the Execution Time field. The reference time of 9:30:00 a. m. must be included in the TRF or ADF trade report in the Trade Modifier 4 Time Field and is not required to be reported to OATS. FINRA will obtain the reference price from the ORF trade report C91. At 8:30:00 a. m. Member BD1 executes a customer order at the 4:00:00 p. m. closing price from the previous day. What execution time should be used in the OATS Execution Report and related trade report Because the trade was executed on a different day from the reference price, the actual time of execution must be reflected in the Execution Time field on both the trade report and the related OATS Execution Report for both OTC equity securities and NMS stocks. Please refer to TR FAQs 408.3, 408.4 and 408.5 for more information on the trade reporting requirements for PRP trades. C92. Member BD1 receives an order from its customer to buy a foreign security and routes the order to a non-member foreign affiliate for execution. The foreign affiliate executes the order in the foreign market and the transaction is reported by the foreign market. The foreign affiliate sells the security to BD1 at a different price than the price reported in the foreign market. BD1 fills the customer order at the same price at which BD1 bought the security from its foreign affiliate (except for any change in price due to currency conversion). Must this order be reported to OATS and if so, what are the required OATS reports Yes, because the transaction by the foreign affiliate on the foreign market and the transaction between the foreign affiliate and BD1 are effected at two different prices, they are considered separate transactions and therefore, the transaction between BD1 and the foreign affiliate must be reported to FINRA for both trade reporting and OATS (See related Trade Reporting FAQ 700.9. In this scenario, because there is a trade report in the US, BD1 would have OATS reporting obligations. Specifically, BD1 would be required to report a New Order to OATS representing the customer order and an Execution Report reflecting execution of that order which must be linked to the related trade report submitted to the ORF. C93. My firm receives orders in securities which are dually listed on a national securities exchange and on a foreign exchange. Some orders come with instructions that they are to be executed only on the foreign market. In these instances, what Trading Session Code should be populated If a firm receives an order for a security that is dually listed with specific instructions that the order is to be executed on the foreign market, then the firm should populate the Trading Session Code field with the code FOR (Foreign Market). It is important to note that the FOR Trading Session Code may only be used in instances where the order can only be executed on the foreign market. If it is possible that the order could be executed in the US, then the Trading Session Code should be populated with the Trading Session Code that reflects the sessions during which the order is eligible to trade in the US. C94. My firm receives an order with instructions to execute the order as agent or riskless principal during regular market hours. My firm accumulates shares during regular market hours but does not execute the customer order until after the close at an average price of the shares accumulated during regular market hours. What Trading Session Code should be used when reporting the new order Since the customer instructions were to acquire shares during regular market hours and the order is executed as agent or riskless principal at the same price that the firm accumulated the shares during regular market hours, the order should be reported with a Trading Session Code of REG. C95. My firm receives an order with instructions to execute the order on a net basis. No specific instruction is given with respect to which trading session the order is eligible to be executed. My firm accumulates shares during regular market hours but does not execute the customer order until after the close at a net price which is reported to the tape. What Trading Session Code should be used when reporting the new order Since the firm executed the trade on a net basis, the Trading Session Code should be based on when the net trade can be executed. If the execution can take place either during regular market hours or in the after hours session, the Trading Session Code should be populated with REGPOST. C96. My firm receives an order with instructions to execute during regular market hours. However, when the regular trading session expires, the order is not complete and the customer instructs the firm to finish the order. What Trading Session Code should be used in this instance Since the original order was received with instructions to trade only during regular market hours, the Trading Session Code field must be populated with REG. If the firm records the subsequent instruction to complete the order as an order modification on its books and records, a Cancel/Replace Report with the Trading Session Code of POST for the remaining share quantity must be reported. If the firm does not record a modification to the order on its books and records, then no Cancel/Replace Report is required. C97. If the Special Handling Code reported with an order contains instructions that reflect the order is only eligible to be traded at the time it is received, such as Immediate or Cancel or Fill or Kill, is the Trading Session Code still required to be populated Yes. The Trading Session Code must be populated on all orders however, if because of the specific nature of the handling instruction (e. g. IOC), the customer does not provide further information on the trading sessions in which the order may trade, it would be acceptable for the Trading Session Code to be populated with ALL since no specific Trading Session was communicated by the customer to the firm. C98. If a firm does not receive specific instructions from its customer as to which session an order may trade, and the firm does not otherwise communicate to the customer that the order will only be traded during specific market sessions, what should be populated in the Trading Session Code In instances where a firm does not receive specific instructions from its customer as to which session an order may trade, and the firm does not otherwise communicate to the customer that the order will only be traded during specific market sessions, the Trading Session Code field may be populated with ALL. This guidance to use the code of ALL includes scenarios where the handling instructions received with the order dictate the trading session in which order is eligible to trade, such as Market on Open, but where no other specific instructions regarding the trading session were received from the customer. C99. What is the purpose of the new Trading Session Code The Trading Session Code identifies the specific market session(s) during which an order is eligible to trade either based on instructions received by the firm from its customer or based on communication by the firm to the customer on when the order will be eligible for execution. The Trading Session Code will be used in FINRAs surveillance patterns to identify when orders may be eligible for execution. C100. Is the Trading Session Code required to be populated for proprietary orders originated by the firm and where no customer instruction is received Yes. The Trading Session Code must be populated on all orders, including proprietary orders originated by the firm. If a firms trading system does not generate specific instructions with respect to when the order is eligible to trade, the code ALL should be used. C101. My firm plans to accept orders in Exchange Traded Managed Fund Shares (ETMF), or NextShares, as defined under Nasdaq Rule 5745. When reporting orders in ETMFs to OATS should prices be reported in the proxy price format or using the Net Asset Value (NAV) established at the end of the day Members must use the proxy price format established by Nasdaq, and not the final trade price, when reporting orders for ETMFs to OATS. C102. Is the Special Handling Code field required to be populated by ATSs when the Order Type includes a condition that is also an allowable ATS Special Handling Code value, such as Add Liquidity Only If the ATSs Order Type encompasses the Special Handling Code, then the Special Handling code field would not be required. For example, if ATS 1 has an Order Type that is NBBO midpoint peg, add liquidity only, then the Special Handling Code of Add Liquidity Only (ALO) would not be necessary since the Order Type includes the add liquidity only restriction. C103. What should be populated in the Matching Engine Look-up Time fields on the New Order and Execution type reports The Matching Engine Look-up Time field should be populated with the time that the ATS referenced, or looked up the existing reference price. A sell order is received by an ATS at 10:00:00:007. The ATS must then identify the NBBO in effect to determine if the order is marketable. The relevant times are as follows: 9:57:47.768 NBBO becomes 10 bid, 10.02 offer 1x1 9:58:23.324 NBBO is updated to 10 bid, 10.02 offer 5 x1 10:00:01.490 NBBO is updated to 10.01 bid, 10.03 offer 1 x 1 ATS Order Receipt Time: 10:00:00:007 ATS looks up existing NBBO: 10:00:00.008 The ATS should report a timestamp of 10:00:00.008 in the Matching Engine Look-up Time field and an NBBO in effect at time of order receipt of 10 bid, 10.02 offer. The size is not required to be reported. C104. A firm operates a display ATS that only publishes periodic snapshots of aggregate quotes based on a pre-determined frequency (e. g. every X milliseconds). The aggregate quote published only reflects open interest at the time of the snapshot. Consequently, there may be orders that have been received, executed, canceled, or repriced as the result of a change in NBBO (or other relevant reference price), but no aggregate quote will be published until the time of the next snapshot. Is the ATS required to generate and report order display modifications under these circumstances A. For purposes of FINRA Rule 4554, because display is not on an order by order basis, an ATS that only displays aggregate level pricing information at pre-determined intervals of time is not required to report order display modifications to OATS. C105. An ATS receives an IOC order and prior to obtaining any applicable reference price necessary to process the order, the ATS determines there is no contra side interest available for execution. Consequently, the ATS immediately cancels the order back to the subscriber without ever determining an applicable reference price. What should the ATS populate in the NBBO (or other applicable reference price) information fields A. Because the order was cancelled before the ATS referenced the NBBO (or other applicable reference price), there would be no such information to report. Therefore, the ATS should report an NBBO Source Code of N which requires all other NBBO information fields be blank. C106. How should an ATS report NBBO (or other relevant reference price) information if the NBBO is invalid or one sided at the time the ATS referenced the NBBO (or other relevant reference price) A. One sided or invalid prices should be reflected as zero. The time the ATS referenced the NBBO (or other relevant reference price) and NBBO source must still be reported. C107. Are the new ALO (Add Liquidity Only), OPO (Opt Out of Locked Market) and STP (Self Trade Prevention) special handling codes that will become available with the November 7, 2016 OATS release required to be reported for orders not received by an ATS A. No. These codes were introduced primarily to facilitate reporting by ATSs and are not required to be reported by non-ATSs. However, FINRA will not prevent the reporting of such codes by a non-ATS. C108. Is a firm that routes an order away from the firm for execution required to report routing instructions (e. g. specific order types and terms and conditions used for the order when sending to an exchange) to OATS in the Special Handling fields A. No. Routing instructions are not reported to OATS by the routing firm. FINRA obtains the routing instructions from the receiving member or exchange. C109. Firm A routes an order to Firm B with instructions to send the order to another member or exchange for execution with specific terms and conditions that the executing venue must follow. Must Firm B report the terms and conditions intended for the executing venue as special handling instructions on Firm Bs OATS new order report in the Special Handling fields A. No. Firm B must report the instructions it received from Firm A as to how Firm B was instructed to handle the order. In this example, Firm A instructed Firm B to route the order directly to the executing venue. The specific terms and conditions given to the executing venue are not reported to OATS by Firm B. FINRA obtains such instructions from the executing venue.
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