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13 multiple-choice questions and 11 flashcards on Obtains and Verifies Customer Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions, about 6% of the Series 6 bank. Every one carries a written rationale.
Obtains and Verifies Customer Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions is one of 4 chapters in CoStudy's Series 6 bank, and it holds 13 of the bank's 230 multiple-choice questions — roughly 6% of the total. That proportion is not arbitrary: chapters follow the certifying body's published exam outline, and the number of questions in each is set by that domain's published weight, so the share of your practice time this chapter takes matches the share of the real exam it accounts for.
Studying by chapter is worth doing once you have a diagnostic score. A single overall percentage tells you whether you are close; it does not tell you which domain is dragging. Working a weak chapter in isolation, and re-testing it in isolation, is the fastest way to move a score that has stalled — and it is why the mock exams in CoStudy report by domain rather than as one number.
9 questions drawn from this chapter, with the full rationale shown — the controlling principle behind the right answer, and why each wrong option tempts and fails.
A mutual fund order placed at 3:45 PM ET is priced at:
Answer: B — Today's 4:00 PM NAV under forward pricing
A) Backward pricing was banned decades ago. B) Correct — Rule 22c-1 fills at the next-computed NAV after receipt. C) Mutual funds do not compute intraday NAV. D) No averaging is used.
A mutual fund prospectus must be delivered:
Answer: C — At or before the time of the investment
A) Post-settlement fails the disclosure duty. B) Delivery is affirmative, not on demand. C) Correct — Prospectus delivery is required at or before purchase. D) 12b-1 fees do not gate delivery.
Open-end mutual fund shares are priced using:
Answer: B — Forward pricing at the next computed NAV
A) Backward pricing was banned in the 1960s. B) Correct — Rule 22c-1 requires the next-computed NAV after order receipt. C) Intraday quotes apply to exchange-traded products. D) NAV is struck daily, not monthly.
An order for Fund Z is received by the fund's transfer agent at 4:15 PM ET, five minutes after the fund's 4:00 PM pricing cutoff. At what NAV should the order be priced?
Answer: B — The next business day's computed NAV
B) Correct: orders received after the pricing cutoff must receive the next computed NAV under Rule 22c-1, regardless of how small the delay was. A) 'Minor delay' doesn't create an exception — pricing a late order at today's NAV would be a late-trading violation. C) Averaging NAVs isn't a permitted pricing method. D) Carrying forward the PRIOR day's NAV also violates forward-pricing requirements.
A trusted contact person under FINRA Rule 4512:
Answer: D — May be contacted protectively but cannot trade
A) Trusted contacts do not receive confirmations. B) No trading authority is granted. C) Family members typically serve. D) Correct — Trusted contacts are protective; they lack trading authority.
'Selling away' under FINRA Rule 3280 refers to:
Answer: B — Private securities transactions outside firm channels
A) Foreign-currency funds are a different concept. B) Correct — Rule 3280 covers unapproved private securities transactions. C) ACATS transfers are unrelated. D) Approved-list deviation is a firm-supervisory matter.
A firm sends redemption proceeds 10 days after a proper request:
Answer: C — Likely violation of Section 22(e) of the '40 Act
A) Rule 15c6-1 covers secondary trades. B) Customers cannot waive statutory duties. C) Correct — The 7-day rule governs redemption payments. D) Reg T governs purchase payments.
A firm is organizing its records retention schedule. Which pairing of record type and MINIMUM retention period is MOST accurate?
Answer: D — Account records — 6 years after account closure
D) Correct: account records are generally retained at least 6 years after the account closes under SEC Rule 17a-4. A) Retail communications are generally retained 3 years, not 10. B) Order tickets fall under the broader records retention framework, not just 1 year. C) Complaint records must be retained far longer than 6 months.
A rep's retail communication compares Fund A's 1-year return to Fund B's 3-year average return to make Fund A look stronger. What rule violation does this MOST likely represent?
Answer: A — An unfair, unbalanced comparison under Rule 2210's content standards
A) Correct: comparing mismatched time periods to favor one fund is an unfair, misleading comparison under Rule 2210. B) Breakpoint sales concern sales-charge discount avoidance, unrelated here. C) CIP concerns identity verification, not advertising. D) Late trading concerns after-hours NAV pricing, not comparative advertising.
4 cards from the 11 in this chapter.
What is the standard settlement cycle for a mutual fund purchase?
Typically T+1 (one business day after trade date), though a fund's prospectus can specify a different cycle, and payment must generally accompany or promptly follow the order per FINRA's prompt-payment rules.
What is forward pricing (Rule 22c-1)?
Mutual fund orders are priced at the next computed NAV after the order is received. Prevents trading on stale prices and stop-watch arbitrage.
What happens during an ACATS transfer?
Receiving firm initiates via TIF (Transfer Initiation Form). Delivering firm validates within 1 business day. Assets transfer within 3 business days after validation.
By when must a trade confirmation be sent to the customer?
At or before completion of the transaction (settlement), per SEC Rule 10b-10 — confirmations cannot be delayed until some later, unrelated statement cycle.
These are a sample. The full Obtains and Verifies Customer Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions chapter runs 24 items with per-chapter progress tracking, on the web and in the iOS app.