Study for the Series 6 Exam

Taking the Series 6 in the near future? If so, then you should know that the SEC has changed the rules governing Regular-Way Settlement from two business days to only one business day.  Regular-Way Settlement  will be T+1, not T+2. The effective date of this rule change is one week from tomorrow, or May 28, 2024. Furthermore, the rules of the Fed for payment in both cash and margin accounts now becomes three business days following trade date, or T+3. The former Fed rule was T+4. Make sure that you know these new rules. Regular-Way Settlement is important for those planning to sit for the Series 6 Exam. FINRA publishes a Content Outline for the   Series 6 , and you can find the provisions of Regular-Way Settlement in Section IV (4.1) Study for the  Series 6  Exam  is available from Amazon in both paperback and Kindle e-book versions.  Here is the link to Bob Eder's  Study for the Series 6 Exam  on Amazon . See   Bob Eder's Author Page ...

Planning to sit for the Series 6 in the near future? Don't go into the Series 6 Exam without careful preparation and study of FINRA's Rule 2210 on Retail Communications and required standards and content for Public Appearances. Why? Because FINRA tells us that this is an important subject in its Series 6 Content Outline. Bob Eder in his Study for the Series 6 Exam devotes all of Chapter One to FINRA's rule on retail communications and required standards for communicating with retail customers. Here's a section from FINRA Rule 2210 on Public Appearances: "Public Appearances (1) When sponsoring or participating in a seminar, forum, radio or television interview, or when otherwise engaged in public appearances or speaking activities that are unscripted and do not constitute retail communications, institutional communications or correspondence ("public appearance"), persons associated with members must follow the standards of paragraph (d)(1). (2) If an asso...

Planning to sit for the Series 6 Exam? Then be prepared for questions on Opening Customer Accounts, including the necessary items required for accepting a new customer. FINRA publishes a Content Outline for the Series 6 Exam, and Section 2.1 specifically talks about the requirements for opening customer accounts. Therefore FINRA is telling us that the Series 6 Exam will include questions on opening such accounts. Bob Eder in his Study for the Series 6 Exam discusses the customer account  requirements in Chapter Four. The SEC also publishes a list of these requirements. Here is what the SEC says at  (https://www.sec.gov/oiea/investor-alerts-bulletins/investoralertsib_openbrokerageaccount): "Information You Will Need to Provide "Brokers generally request personal information from their customers, including financial and tax identification information. Brokers need this information to comply with laws and other regulations. Some of the information a broker will likely ask you t...

Taking the Series 6 Exam in the near future? Yes? Then be prepared for questions about annuities, not only fixed and variable annuities, but also indexed annuities, including Equity Indexed Annuities (EIA) and Registered Index-Linked Annuities (RILA). How do I know that the Series 6 Exam includes questions on Indexed Annuities? I know this because FINRA publishes  a Content Outline for the Series 6  that includes Section 3.2 that lists characteristics and types of annuities.  Bob Eder in his Study for the Series 6 Exam treats Indexed Annuities with specificity and detail. Here is an example of Bob Eder's treatment: Equity Index Annuities (EIA)                                                           ...

The Series 6 Exam content is wide ranging, and includes knowledge of required disclosures about investment products and their characteristics, risks, services and expenses. For example, the Series 6 Exam covers the various cost and fees associated with investments such as markups, commissions, net transaction and fees of various share classes. FINRA's Test Specifications for the Series 6  Exam discuss these fees and expenses in Section 3.3. Bob Eder in his Study for the Series 6 Exam covers these fees and expenses in detail. Here is an example of Bob Eder's treatment: Asset-Based Charges (3.2) If a mutual fund has an asset-based charge under Section 12b-1 of the Investment Company Act of 1940, and uses the fees generated to pay for the maintenance of shareholder accounts ("service fees"), the maximum sales charge, including front-end and deferred sales charges, cannot exceed 6.25 percent of the amount invested. FINRA Rule on 12b-1 Charges (3.2) FINRA restricts ...

Candidates for the Series 6 Exam must use care in studying FINRA's rules on Communications with Customers. These rules are involved and must be studied carefully. For example, can you explain the difference between retail communications and correspondence? Or are they the same thing treated in the same way?  Retail communications need to be filed with FINRA's Advertising Regulation Department, but correspondence does not need to be filed. However, both retail communications and correspondence need the written and dated approval of a principal of the brokerage firm before they may be used. So communications with the retail public gets complicated! Bob Eder in his Study for the Series 6 Exam devotes all of Chapter One to Communications with Customers. Here is a sample of Bob Eder's treatment and discussion: PRACTICE QUESTION FINRA has specific strict rules regarding the use of retail communications. June is a representative. She considers some of the definitions included i...

FINRA publishes a Content Outline for the Series 6 Exam. Under Function 1 - "Seeks Business for the Broker Dealer from Customers and Potential Customers," FINRA's Content Outline lists required knowledge of the standards and required approvals for Public Communications. The primary FINRA rule governing Communications with the Public is Rule 2210. Before you sit for the Series 6 Exam, make sure that you are familiar with the main provisions of this Rule. Bob Eder has a full treatment of Rule 2210  Communications with the Public  in his Study for the Series 6 Exam . Here is an example of Bob Eder's treatment: Correspondence (1.1) FINRA defines "correspondence" as any written or electronic communication that a brokerage firm or representative sends, distributes, or makes available to 25 or fewer retail investors, within any 30-calendar-day period. If a representative sends material to more than 25 retail customers within any 30-day period, then it would be ...

What is the "Best Execution Rule"? Can you define and describe the Rule?  The Series 6 Exam may ask you questions about the  Best Execution Rule , so be prepared. FINRA publishes a Content Outline for the Series 6 Exam , and it lists the " Best Execution Rule " in Section 4.1. It also refers to FINRA Rule 5310 that governs both the Best Execution Rule and Interpositioning. Bob Eder in his Study for the Series 6 Exam discusses the Best Execution Rule on page 266 and Interpositioning on page 289. Here is a sample of Bob Eder's treatment: Best Execution Rule (4.1) When a client gives an order to buy or sell securities, a broker or representative has an obligation to make sure that the client pays the lowest price available, if the client is buying, or receives the highest price available, if selling. This is called "best execution." Especially in the Nasdaq market, there might be five, 10, or 15 dealers taking the other side who will buy or sell. The p...

FINRA publishes a Content Outline for the Series 6 Exam that lists the subject matter for test questions. Included are Privacy Regulations regarding financial information received from customers and clients. See Section 2.2 of FINRA's Content Outline. Thus a representative must not disclose details about a customer's account or financial position or history. This information is confidential and may not be disclosed, absent a court order. Candidates for the Series 6 license must prepare themselves to answer questions about Privacy Regulations, including when a customer may opt out from allowing a brokerage firm to share confidential customer information with related affiliates. Bob Eder covers Privacy Regulations in detail in his Study for the Series 6 Exam . Here is a sample of Bob Eder's treatment: "Safeguarding Privacy of Customers                                          ...

Okay, so you are becoming licensed as a Series 6 representative. Before you may open a new account, you must first obtain important information about that customer. This gathering of information is required by the U.S. Patriot Act to prevent criminal money laundering and/or tax avoidance. In accord with the Patriot Act, the U.S. Treasury and the SEC have established a Customer Identification Program (CIP) that controls brokers when opening new accounts. FINRA's Content Outline for the Series 6 Exam includes customer screening and customer identification program in Section 2.2. Series 6 candidates, therefore, should expect to see questions on these topics on the test. Bob Eder covers these rules in detail in his Study for the Series 6 Exam . Here is a sample of Bob Eder's treatment: "Required Customer Information (2.2)" "Every brokerage firm must assure that its representatives obtain identifying information about a new customer before opening an account for tha...

The SEC has rules regarding the requirement that registered reps maintain confidentiality about the financial positions of their customers. This is called Regulation S-P. FINRA's Content Outline for the Series 6 includes privacy regulations in Section 2.2. This means that a Series 6 candidate should expect to see questions on privacy requirements on the Series 6 exam. Bob Eder has detailed information about Regulation S-P in his Study for the Series 6 Exam . Here is a sample of Bob Eder's discussion on maintaining  privacy of financial information of  customers : "Regulation S-P                                                                        ...

If you are planning to sit for the Series 6 exam, be careful about requirements for opening accounts for customers. FINRA has rules regarding opening accounts, and FINRA includes this topic on the Series 6 exam. See FINRA's Series 6, Content Outline, specifically Section 2.1 and 2.2. Bob Eder discusses the requirements for opening accounts on page 87 of his Series 6 preparation manual, Study for the Series 6 Exam . Here is a sample from Bob Eder's treatment: Requirements for Opening New Accounts (2.2) Here are the basic items that FINRA requires on a new account form. 1.                     social security number or tax identification number 2.                     driver's license or passport number 3.                ...