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Chapter 3: Registration of Securities Industry Participants
1. There are four types of introducing/carrying arrangements. The _________ broker takes on increasingly greater responsibilities, moving from Type 1 to Type 4 arrangements. While the client is considered a client of the _________ broker under all four types, the carrying broker has Know Your Client obligations only under Type 1 arrangement, in which the carrying broker has some or all of the sales compliance responsibilities.
a) introducing ; introducing
b) carrying ; introducing
c) introducing ; carrying
d) carrying ; carrying
Chapter 4: Account Opening Procedures
2. Red flags that IAs may encounter during the account opening could include ?
I. clients who are reluctant to provide adequate information or supporting documentation
II. clients who submit documentation that appears to be altered or counterfeit or if all of the documents have recent issue dates
III. clients who submit documents that are photocopies, facsimile images or other electronic reproductions, even when certified as true copies by an attorney acting on behalf of the client
IV. clients who attempt to open accounts in other people’s names
V. clients who provide an address that is out of the local service area
VI. clients who provide a P.O. Box, General Delivery, or other type of mail drop address, instead of a street address when this is not the norm for that area
a) I to III
b) I to IV
c) I to V
d) I to VI
1. c) introducing ; carrying
2. d) I to VI