Person When talking about investing, this is any entity that can form a legally-binding contract (they are of age and of sound mind), and they are allowed to do business in the securities market. These do not only have to be an individual, but can be a partnership, a government agency, a corporation, etc. Limited Partner Rollup This is a transaction that merges or reorganizes two or more…

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Sometimes this is just referred to as a “program”. It offers the entire process through economic events and tax burdens. It can be set up in different ways, such as a limited partnership, a limited liability company (LLC) or an S corporation. They can be created as a legal entity to manage interests in a variety of fields, including agriculture, ranching, fossil fuels, minerals, real estate…

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FINRA = Financial Industry Regulatory Authority, Inc. It is the self-regulating body for setting standards and regulation for financial professionals. The FINRA Series 22 exam is an essential part of becoming a successful financial professional. You will be able to participate in direct participation programs. (Real estate, oil, equipment, gas, etc.) Also, doing business with limited…

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This is the first in a series of podcast to help you prepare for the FINRA Series 22 Exam the Direct Participation Programs Limited Representative Exam…

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Margin accounts allow investors to buy securities without having to pay for them in full. They have to put a certain portion of the price down, called the margin, and then they can borrow from the broker-dealer. The size of the margin is set down by Regulation T by the Federal Reserve Board. They also control which securities can be purchased on the margin and how often it has be be paid.

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Types of Accounts An individual account account is one that is owned by a single person. Only he or she can determine which securities are bought or sold and they get all the proceeds from the account. A joint account is owned by two or more people. Any of the parties can buy or sell securities and can receive proceeds. The registered representative does not need to confirm transactions with…

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FinCEN is a part of the U.S. Department of the Treasury and it seeks to safeguard the nation’s financial system. They send blacklist to FINRA member firms every few weeks and the principal must check these lists against their client base within 14 days and report. After the attacks on 9/11, FINRA member firms must develop a business continuity plan that provides for backup facilities that can…

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The Securities Investor Protection Corporation (SIPC) is a corporation sponsored by the governments that protects customers when a broker-dealer fails them. All broker-dealers registered with the SEC must also be SIPC members and pay annual dues to them as a way to fund insurance for people harmed by broker-dealers. All SIPC members also have to get a fidelity bond to protect customers if the…

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