Series 24 – General Securities Principal Exam Financial & Capital Requirements 2

Question 1

Under SEC Rule 17a-5, broker-dealers must file annual audited financial statements with their DEA within how many days after the fiscal year end?

Accepted Answer

90 days

Answer

SEC Rule 17a-5 requires broker-dealers to file annual audited financial statements with their DEA within 60 days after the firm's fiscal year end.

Question 2

What is the primary purpose of the SIPC (Securities Investor Protection Corporation)?

Accepted Answer

To restore securities and cash to customers if a broker-dealer fails

Answer

SIPC protects customers by restoring missing securities and cash up to $500,000 (including $250,000 for cash) if a member broker-dealer fails.

Question 3

Under the alternative net capital method (Rule 15c3-1), a broker-dealer must maintain net capital of at least what percentage of aggregate debit items?

Accepted Answer

5%

Answer

Under the alternative method of Rule 15c3-1, broker-dealers must maintain net capital of at least 2% of aggregate debit items computed under the Customer Protection Rule.

Question 4

A broker-dealer receives an early warning notice when its net capital drops to what level relative to minimum required capital?

Accepted Answer

Below 150% of minimum required

Answer

FINRA issues an early warning when a firm's net capital falls below 120% of its minimum required net capital, prompting corrective action before a deficiency occurs.

Question 5

Which financial report must a broker-dealer file monthly with FINRA to report its financial and operational condition?

Accepted Answer

FOCUS Report (Form X-17A-5)

Answer

Broker-dealers file the FOCUS Report (Form X-17A-5) monthly with their DEA to report their financial condition and operational data.

Series 24 – General Securities Principal Exam Practice Test

Series 24 – General Securities Principal Exam Practice Test

Series 24 – General Securities Principal Exam Financial & Capital Requirements 2